On Starting An Online Auction Marketplace
I am the founder of Municibid, an online auction marketplace where over 4,000 state and local governments and schools auction items that are no longer needed, forfeitures (seized items), and lost-and-found items to the public.
Founded in 2006, we’ve helped municipalities take advantage of the online marketplace to get 50-200% more for their items than they would with traditional sealed bids or newspaper ads. We don’t charge a penny for municipalities to use Municibid, so 100% of the proceeds they receive go back into the community.
Municibid is the easiest way for municipalities to sell their surplus. They pick the items they want to sell, take a few photos, fill in an item description, and that’s it. We do all of the heavy liftings with marketing their items, running the bidding system, and providing sales reports. Likewise, it’s a convenient and streamlined process for buyers to place bids and pick up items they win.
What's your backstory and how did you come up with the idea?
I was in a council meeting and we sold a Chevy truck for $500. It was easily worth at least $5,000. Then, about 30 minutes later, we bickered about spending $1,000 on a community project. It was 2005 and I was 25 years old. There was an open town council seat in the Borough of Pottstown, Pennsylvania. I was born and raised in Pottstown, an industrial town in the ’70s and ’80s that went stagnant. I wanted to help revitalize the town that had shaped who I was, starting with building a new annex at the community college and economic development. I ran and won the seat.
I sat in hundreds of town council meetings and it happened again and again. We sold vehicles, equipment, and other items for pennies on the dollar through a sealed bid process. A sealed bid is when people put their bid in an envelope and drop it off or mail it in. Then on a specific date, the government opens all the bids and awards the item to the highest bid.
Oftentimes, a Ford Crown Victoria worth $3,000 would be sold in a sealed bid for $300. There was no competition, as no one saw what anyone else was bidding. Plus, there was very little advertising for these items so hardly anyone knew these items were for sale. The Borough of Pottstown was losing tens of thousands of dollars with this archaic process that they could have been reinvesting back into the community.
How many other townships across the state — across the country — were doing the same? Why weren’t we selling our items online? Why weren’t we using eBay? In 2006, Pennsylvania local governments were just then legally allowed to sell online, but very few were. A few municipalities were using Craigslist and others were trying out eBay. Neither Craigslist nor eBay was set up to meet the requirements governments have for selling their surplus. Plus, neither had any customer service or guidance for this uncharted territory for governments.
The day after graduating high school, I founded an IT company that I grew for 12 years and eventually sold in 2010. With my background in technology, I built the first version of Municibid for about $2,000. It was nothing fancy, but it was good enough to run a basic online auction. I convinced a few local municipalities to give Municibid a try. The first item listed on Municibid was a riding mower by the Borough of Pennsburg, Pennsylvania. They were hoping to sell it for $100. It sold for $500.
Then another township listed a Ford Crown Victoria with a blown engine. They just wanted to get rid of it and maybe get a few hundred dollars for it. It sold for $2,800. They truly didn’t believe it. They thought something was wrong — and to be honest, so did I — until the guy showed up with a $2,800 check and a flatbed. Needless to say, they were ecstatic.
Meanwhile, I spent every hour I could getting the word out about Municibid and the items that were up for auction. I made those flyers with tear-off tabs you see hanging on community bulletin boards and posted them at The Home Depot, Lowes, grocery stores, anywhere. I ran small ads in the classified section of the newspaper and those penny pincher magazines at convenience stores.
I took these results and the testimonials from the governments on the road and, as they say, the rest is history.
Take us through the process of designing, prototyping, and manufacturing your first product.
Starting a business, especially an online business, was much different in 2006 than it is today. Fortunately, starting an online business was still easier and less expensive than starting a product-based business. I was able to get the business started and launched for around $2,500.
I didn’t have a process for designing the first iteration of Municibid. I needed to get something off the ground as quickly as possible to see if the idea was going to work.
I bought a basic, off-the-shelf, online auction platform. It was good enough, with some customizations, to conduct some auctions and test the idea. After a few tests, I was able to have a few willing people at other local governments give it a try.
Describe the process of launching the business.
I launched Municibid in 2006 for around $2,500, shortly after I came up with the idea and spoke with some contacts I had in other local governments. The idea was met with skepticism and some people outright told me the idea wouldn’t work, for a variety of reasons.
I still thought it was a good idea, but when you’re selling to and working with governments, you just never know. What I did know is that I had to get something up and running quickly to see for myself if it would work or not.
I bought a basic, off-the-shelf, online auction platform. It was good enough, with some customizations, to conduct some auctions and test the idea. After a few tests, I was able to have a few willing people at other local governments give it a try.
The first item ever listed was a riding mower. The town was hoping to sell it for one to two hundred dollars. I created one of those pull-tab flyers, where you rip off the tab at the bottom of the flyer, and posted them in every hardware store, grocery store, and any other place I could find. I also ran small ads in those free classified magazines you would see at convenience stores. The legal advertisement the town was required to run also sent traffic to the site.
I was able to get a few bidders to bid on the riding mower. It ended up selling for $500. The town was quite pleased and gave us a solid recommendation to go along with the results.
I used this same process time and time again in the early days — canvas the area of the government, run cheap ads, make sure municibid.com was mentioned in the legal ads, among many other ways I could spread the word. It was good enough to validate the idea would indeed work.
We received awesome testimonials to go with the sales results, which we used to convince other governments to give Municibid a try.
Since launch, what has worked to attract and retain customers?
We attract and retain customers through our ease-of-use, marketing, and ‘Beer-worthy’ customer service.
Ease-of-Use
The one thing we hear most from our customers is how easy Municibid is to use. This is by design. We continuously spend a significant amount of time designing and refining the website to provide an excellent customer experience. It’s fast and easy for governments to list items for auction and cleanly organized for bidders to find the items they are looking for, no matter which device or screen size they’re using.
Marketing
Our comprehensive marketing program, offered to governments at no charge, proactively gets the word out about the items they have up for auction. We’re committed to selling governments’ items for the most we can, so we take the extra time to launch tailored ads, emails, and social media promotion for individual items.
We’re ahead of the curve in our industry when it comes to our marketing strategy with our marketing automation, Facebook Shop, and dynamic popups, to name a few. We’re always on the lookout for new channels and tactics to continue growing.
Beer-Worthy Customer Service
At Municibid, we take A TON of pride in going the extra mile to provide our customers with the best customer service experience they’ve ever had. And we’re not just talking about providing better service than our competitors; we mean providing a level of service better than any company they have ever worked with, period. We call it Beer-Worthy Customer Service!
What is Beer-Worthy Customer Service?
Well, we didn’t come up with this description out of nowhere. We have a chuckle over the number of times customers offer to buy us a beer after we help them out. To us, ‘Beer-Worthy Customer Service’ means being relatable while providing a personalized level of service to the point that our customers want to sit down with us and buy us a beer.
How are you doing today and what does the future look like?
We believe in consistent, manageable, year-over-year growth. We’ve been fortunate to have achieved year-over-year growth every year since our founding in 2006.
You may not always have an immediate result, but if you make good impressions, people will remember you when they need help.
As we continue to grow, it will be harder to maintain the growth rate percentage we’ve been fortunate to enjoy, but it’s certainly not impossible. It will take course correcting, being open to new possibilities and ways of thinking, and coming up with unique ways to stand out, along with continuing to be consistent in our execution.
Through starting the business, have you learned anything particularly helpful or advantageous?
The most common mistake I’ve seen new entrepreneurs make is not talking or meeting with their prospective customers. Simply picking up the phone or going to meet with prospects will go a long way in building rapport and helping to understand how they see your business or solution, and in their own words, which you can then use in your marketing collateral.
Also, you must have steadfast determination. I think this goes without saying, but once you have an idea of what you want to solve or provide with your business, you can’t do it without the full determination to see it through. When I was just getting started with Municibid, I had people older and wiser than me, who I had a lot of respect for, tell me my idea for Municibid would never work and that I was wasting my time. While it wasn’t pleasant to hear, it didn’t deter me.
Starting and growing a business is not easy and comes with many challenges and pitfalls. Things won’t work out in a lot of cases and it’s over for many new entrepreneurs at this point. The entrepreneurs who achieve success are fully determined to do so, even if it doesn’t quite look like what they first imagined. You might have people telling you ‘that will never work’ or ‘that’s crazy’ or ‘you’re wasting your time.’ Use this as motivation to stay committed to your goals. There will be times when things will get tough... this is what sets entrepreneurs apart.”
What platform/tools do you use for your business?
Slack - We utilize Slack for more than just chatting with each other. We have several integrations and automation built-in Slack to help us be more efficient and productive, while also keeping us on top of what is happening with our customers. For example, we are automatically notified when a new selling agency comes on board and then again when they list their first items, so we know to reach out to them to thank and congratulate them.
Intercom - Intercom is our backbone for communication with our customers and our tool for managing and tracking support requests. We have an Intercom designed to allow us to provide a highly personalized level of communication with our customers.
Customer.io - Customer.io allows us to proactively stay in touch with our customers, and helps us better market auction items to bidders by allowing us to personalize our communications at scale and do A/B testing for improving our messaging.
What have been the most influential books, podcasts, or other resources?
I recommend reading A New Earth, by Ekhard Tolle. While not necessarily a business book, I highly recommend it to my fellow entrepreneurs. Everything you do and create ultimately comes from within, and this book goes a long way in understanding the ego, staying present, and how to better trust yourself and your instincts.
I’ve been really enjoying the My First Million podcast, The hosts riff on a wide variety of business ideas and discuss new and emerging trends across many industries.
Also, I typically refer new entrepreneurs to Miles Beckler’s YouTube channel. Miles aims to be the most helpful internet marketing person on the planet — and he backs it up with bringing tons of knowledge and value, all for free, on his channel.
Advice for other entrepreneurs who want to get started or are just starting?
It is so important to have patience. As entrepreneurs, we tend to move faster than most people and we would love things done yesterday. I’ve learned that the more patience I have, the faster things seem to happen and with higher quality. As a go-getter and someone not afraid to fail, and fail often, I like to get results (good or bad) as soon as possible. Unfortunately, this is not the reality for customers, vendors, nor how most team members want to work.
Breathing down someone's neck to get the status of something is not going to help them finish the task at hand any faster — in fact, it will simply slow them down. In the times when I know I’ve done this, I later realized it wasn’t a problem with the team member, but rather it was a lack of communication or expectation setting on my end. I’ve learned over the years that having patience invokes my team members’ trust and confidence in me as the leader, and allows them the space to perform better.
Also, customer support has a big impact on marketing. When customers are heard and have their queries resolved, they won’t go to social media or other public outlets complaining, which means marketing doesn’t have to go into damage control mode. Instead, happy customers share their good experiences and that’s the word of mouth that, even today, is gold.
On top of this, don’t underestimate the power of the relationships you build. You may not always have an immediate result, but if you make good impressions, people will remember you when they need help.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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