An online marketplace called SidelineSwap, where athletes buy and sell sports gear and equipment is announcing a $5 million Series A financing round today that is led by Global Founders Capital with participation from former NBA player David Robinson's Admiral Capital, Peak6 Sports, RiverPark Ventures, FJ Labs and The Player's Impact, which is a syndicate of pro athlete and Olympians. With the raise, SidelineSwap has raised a total of $8.9 million to date.
SidelineSwap plans to use the new funds to break down the barrier of entry for high-cost sports, such as lacrosse and hockey, for young athletes across the world. It is a noble effort in a sporting goods industry ready for disruption, especially after recent bankruptcies of Sports Authority, City Sports and Golfsmith.
The main competitors for this company that launched in 2015 are eBay and Amazon, but SidelineSwap says it has more used inventory available for sale in top sports categories, and that's a big factor that could lead to success.
1. Figure out what competitors aren't focusing on that the consumer may be interested in.
The vast majority of sellers on SidelineSwap are individual athletes and sports families selling their equipment, and more than 70% of items sold are classified as used," says co-founder and CEO Brendan Candon. "Our goal is to be the best marketplace to buy and sell your sports gear, and we're the only ones totally focused on that space. At this point we have a larger selection of used inventory in our top sports than eBay and Amazon."
Most people don't even think about buying used sports gear and equipment, and that is where SidelineSwap has done its research and found an opportunity. If the goods are close enough to new condition and can be bought and sold at a discount, then SidelineSwap is able to basically take a brokering fee and facilitate this type of transaction.
2. Beat the bigger competitors on price.
"While consumers have plenty of retail options when it comes to buying gear, we are able to offer the best deals--usually more than 50% less than retail--because it's being sold by individual sellers who are simply interested in making some money back on gear they bought last season," adds Candon. "Sports equipment can be very expensive--a set of equipment in sports like hockey, lacrosse and baseball can cost you well over $500 at a retail store. We offer buyers a way to save 50% on high quality used and new gear, and sellers a way to earn money on last year's equipment so they can reinvest in new gear this season."
This business model seems to have struck a chord with SidelineSwap's customers. Additionally, while retailers are facing major challenges as shoppers accelerate their shift online, SidelineSwap has been able to take advantage of the latest technologies to build a high-end mobile shopping experience and benefits from the fact that it doesn't hold any inventory.
3. Beat the bigger competitors on processing fees.
"SidelineSwap charges sellers a 9% fee, plus payment processing which means our fees are lower than eBay and Amazon," says Candon. "Buyers pay for shipping in addition to the seller's listing price, so we've removed shipping fees from the equation for sellers."
With Amazon and eBay using relatively complex fee structures (Amazon charges ~17% on a $100 sale and eBay charges ~14%), fees can be a distinguishing factor. And athletes are signing up. Some notable pros who have sold their equipment include Ted Ligety (2x Olympic Gold Medalist), Paul Rabil (New York Lizards), and Jimmy Vesey (New York Rangers).