How We Launched A $2.5M Luxury Watches Marketplace
Hello! Who are you and what business did you start?
I am Pablo, leading Chronoexpert, a marketplace in the luxury goods industry. We currently focus on the luxury watches vertical and believe that pre-owned is the future. The pre-loved market is growing +20% year over year and is expected to surpass the ‘new market’ in the next 10 years.
This project was launched almost 3 years ago and is currently above the 2,5M€ revenue. Still low for our expectations, and need to continue pushing harder and exploring new opportunities. If you are in the luxury watches industry, please contact me!
What's your backstory and how did you come up with the idea?
The original idea is not mine, but I started the project from the ground and had been working in the high-end goods industry for some time.
It came from one of our first investors, who was trying to buy some art pieces from some great marketplaces based in the US.
This was not the case with luxury watches, so we got together and decided to start this adventure. Our company is based in Bilbao (Spain), where we have our main office. As I said before, I worked in eCommerce, dealing with higher as usual AOVs, but always from the performance side.
Validation of the idea and the market size came pretty quick, with initial metrics showing a good potential; gross margins being low until 2020 though. This has been our main focus for this year. Unit economics are pretty strong now.
Take us through the process of designing, prototyping, and manufacturing your first product.
We run on our own developed platform so our first MVP was pretty advanced, not really an MVP at all. We focused on scalability from the very beginning. However, we knew that the design was not the best at the beginning (it still isn’t!).
The first website we launched was the Spanish version of Chronoexpert. After that one and in a few weeks, the platform was live in 15 countries, 13 of which are transactional. The other two, Brazil and South Africa are still in testing mode, analyzing the country, etc.
Company incorporation, trademarks, and other legal stuff were outsourced and done at the same time. We focused on the core, these legal issues take too much time!
The next step was building supply, liquidity is key in a marketplace. Our first supply goal was reaching the 1.000 products mark. It got easier afterward.
Describe the process of launching the business.
Launching a business like this requires tons of work, you have to build the platform, the database, supply. But even if you have all of this, you will start with 0 customers and zero website traffic. Literally nobody besides your own visits to the website. And this is discouraging.
It took us 6+ months to reach a modest traffic volume, but it was enough to make the first sales and test our model.
In terms of cost and investment, developing the platform was the highest initial budget by far, and marketing came later. We are really capital efficient, but there are some areas where we need to invest, and this is why we raised our first and only funding round.
The original version of the website:
Since launch, what has worked to attract and retain customers?
We are focused on two marketing channels, organic traffic, and paid media. Until now, our efforts in social media or affiliate partners have been close to zero. We’re aware that this is pretty uncommon these times, but we prefer to put the budget on what works for us with our current unit economics.
Our budget goes to Google Ads, mainly Shopping. Sorry to disappoint marketers looking for innovative solutions!
Doing it right for a company that sells online and offline (phone, WhatsApp) is difficult. It involves all areas of the business. Customer Success team, sales, marketing, if one department doesn’t work, the Google Ads budget will be wasted.
Remarketing works also well in terms of customer attraction and has to be running to increase the ROAS of the Google Ads budget. We tested Criteo but it did not work for us, so we are currently using Google’s dynamic remarketing. RTB House could be our next A/B test regarding remarketing.
How are you doing today and what does the future look like?
Profitability is our next step. Currently close to it but need to push there. Gross margins have been improving the last year as we are becoming more important for our suppliers but are still low for a marketplace.
We are 100% digital in a really traditional industry. And we would love to prefer this way, as we are not experts in brick and mortar. It is a totally different company. However, we are open to popup stores if we need to.
In line with our profitability path in a digital business, we need to go back to our initial focus on organic traffic. We are aware that it has been put in a second-place position for the last few months. And it needs to be put 1st both with a budget, and team effort.
Through starting the business, have you learned anything particularly helpful or advantageous?
I am not a PR guy and more focused on performance in all areas and departments of the company. However, and depending on the industry you are in, it is key to build trust with your company.
A marketplace in the luxury industry has to build trust day over day, so hiring the right PR agency or having an in-house team is a big step to overcome the first doubts clients may rightfully have.
We even went to a TV show, this is a picture behind the scenes!
What platform/tools do you use for your business?.
We run on our own developed platform, which always has pros and cons. Furthermore, I believe in the simplicity of using Trello.
In terms of CRM and ERPs, we use Pipedrive and Holded. This was a tough decision, as we analyzed almost all CRMs in the market: Hubspot, Nocrm, Freshdesk, Zoho, Agile CRM, and many more.
Aircallis our VoIP software, which I feel is slightly expensive (but works well) and has some issues with the iOS App. But moving to another provider is not in our roadmap now.
Email marketing software is still something we have to nail, currently using Mailchimp but testing Klaviyo and Salesmanago to move to the next level.
As you can see, we use well-known tools. Our key differentiation does not come from this area!
What have been the most influential books, podcasts, or other resources?
I mainly follow two podcasts, the K Fund VC podcast, and Itnig. Both are the best place to be informed about the Southern Europe startup and VC landscape. They also have pretty good weekly newsletters.
Regarding books, I prefer to keep my reading time for ‘fun’. But Zero to one by Peter Thiel is a good read.
Advice for other entrepreneurs who want to get started or are just starting?
I sometimes feel I am too focused on revenue metrics and unit economics. But IMO, this is the best way to test early-stage projects. Focus on building a sustainable company and build up from there.
This also depends on the type of company and project, eCommerce is not the same as a marketplace or a deep tech company. Just work towards validating your idea as fast as you can!
Are you looking to hire for certain positions right now?
2020 has been a slow year in terms of hiring, but 2021 will be a key area for us. Q1 we are looking to fill two senior developers, one B2B sales senior, and a creative marketing head. Ambitious and high performers are always welcomed in our team, please drop a line and we will get back asap.
All of them full-time positions as we believe in hiring the right people and developing them in the long term. We are proud of our low employee rotation rate.
Ambitious candidates and high performers are always welcomed in our team, please drop a line and we will get back to you asap.
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.
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