In the June 2009 issue, we wrote about Millennium Music, a popular independent record shop in Charleston, South Carolina, that was struggling to come to grips with the age of digital music. The shop had built its reputation on its welcoming ambiance and its knowledgeable and helpful staff. But it had been losing money for years. So founder Kent Wagner decided to turn his company into an online reseller of used CDs, DVDs, and books called AbundaTrade.com. The idea was to solicit customers' old media in exchange for cash or electronics, such as iPods and flat-screen TVs. AbundaTrade would then resell the CDs and DVDs online at prices slightly below those of competitors. Soon after launching, AbundaTrade was taking in around 15,000 items a week, but the former record store employees missed serving as cultural tastemakers.
What the Experts Said
Jason Crawford, founder of SwitchGames, wondered if the move wasn't just prolonging death, noting that eventually CDs will be useless. Marty Anderson, a lecturer at Babson College, wasn't sure how AbundaTrade could grow. Jeremy Hanks, founder of Doba, admired the company's e-commerce model but urged the company to simplify it.
What's Happened Since
Wagner and AbundaTrade co-founder Clayton Woodson have concentrated on increasing supplies of used merchandise. The effort has paid off -- both supplies and sales increased more than 60 percent in 2009. One reason for the success: AbundaTrade lined up some big-volume suppliers of used and overstocked CDs and DVDs, including Blockbuster and Best Buy. The company began hiring and now employs 26. It also refined its business model; it now focuses almost entirely on exchanging old CDs and DVDs for cash, rather than for electronics. That has freed up staff to focus on reselling and shipping.
The founders are honing the company's search-engine-optimization strategy, which they say will give another boost to sales. "We want AbundaTrade.com to be known as the No. 1 place for customers to sell their media collections," says Woodson.