Businessmodel of Catawiki

Customer Segments

Catawiki has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:  collectors who hold auctions for their items and buyers who purchase the items to add to their own portfolios.

Value Proposition

Catawiki offers four primary value propositions: accessibility, convenience, risk reduction, and brand/status.

The company creates accessibility by making things easier to obtain and providing a wide variety of options. Its weekly auctions enable visitors to bid on thousands of rare, unusual, and exceptional items that would be difficult to find elsewhere. Examples of things that have been sold include a mammoth skeleton, large meteorites, a lock of Napoleon’s hair, and the world’s most expensive Lego set. Its selection is less expensive than that offered at auction houses such as Sotheby’s or Christie’s.

The company offers convenience by making its site easy to use. Buyers can register for free using Facebook or an e-mail address. They can specify an item of interest and receive an automatic notification if it comes up for auction. Afterwards, they can place bids starting at $1, and if they win they receive the product within three business days. Sellers can also create free accounts, and have their offerings receive a free, professional valuation from Catawiki’s expert auctioneer staff. They can then auction as many items as they desire (with a minimum value of €75).

The company reduces risk by maintaining high quality and safety standards. Its auctioneer staffers evaluate offerings to ensure they are sold at an accurate value. It also has the following policies:

• All of its auction proceedings are verified by an independent notary official
• Sellers are prevented from placing bids on their own items
• If a bid is placed at the last minute, the bidding window automatically increases by one minute, giving other bidders enough time to place a counter-bid
• The company’s employees and family members are not permitted to put items up for auction
• Sellers are required to submit a scan or copy of a valid identification card The company has established a strong brand due to its success. It touts itself as the leading online catalogue and auction house for collectibles. Its catalog has 3,233,591 items from 1,452,096 registered collectors. It has over 100,000 sellers who conduct more than 300 weekly auctions in which 30,000+ lots are sold per week. Cumulatively, it has auctioned over 30 million objects. It has 12 million monthly visitors who purchase items in a wide variety of categories, including art, antiques, classic cars, coins, comic books, model trains, watches, jewelry, fashion, books, and stamps. Lastly, it has won a number of honors, including a ranking of first place in the 2015 Deloitte Technology Fast 500 Europe, Middle East & Africa program, which identifies the region’s 500 fastest-growing firms.

Channels

Catawiki’s main channel is its website. The company promotes its offering through its social media pages, advertising, and participation in conferences.

Customer Relationships

Catawiki’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides answers to frequently asked questions and access to an e-mail newsletter with auction news. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Catawiki’s business model entails maintaining a common platform between two parties:  collectors who auction their offerings and buyers who purchase them. The platform includes its website and mobile app.

Key Partners

Catawiki operates the Catawiki Affiliates program, through which it invites third parties to promote the site on their platforms (website, mobile apps, etc.). The company provides these parties with conversion-optimized advertising material such as banners, textlinks, and datafeeds.

Leads that result in seller registrations earn the third party compensation of up to €20 per registration. They can keep track of their transactions and view relevant statistics in general from a personal dashboard.

Key Resources

Catawiki’s main resource is its proprietary software platform, which connects more than 100,000 sellers with over 12 million monthly visitors.

It depends on its human resources in the form of technology employees to maintain the platform, specialist auctioneers to evaluate the worth of submitted items, and customer service employees to provide support.

As a startup it has relied heavily on funding from outside parties, raising $94.83 million from nine investors as of August 2016.

Cost Structure

Catawiki has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost. Other major drivers are in the areas of sales/marketing and customer support, both fixed costs.

Revenue Streams

Catawiki has one revenue stream: revenues it generates from the transaction fees it charges. They fall into two categories:

• Seller Commissions – The company charges sellers a fee equaling 12.5% of the winning bid (fee excludes VAT/sales tax).
• Buyer Fees – The company charges buyers a fee of 9% for purchasing items through its platform.