Businessmodel of DaWanda

Customer Segments

DaWanda has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:

• Consumers: Individuals who are seeking unique handmade gifts.
• Designers: Individuals who have designed handmade gifts and are seeking customers. DaWanda’s model can also be classified as a niche market as it provides an offering that customers might have difficulty finding elsewhere.

Value Proposition

DaWanda offers four primary value propositions: accessibility, convenience, customization, and brand/status.

The company creates accessibility by providing a marketplace through which consumers can find unique gifts, and artists can find audiences for their products. In addition, consumers are allowed to make personal contact with artists, providing feedback on their offerings.

The company offers convenience by allowing website visitors to add products of interest to a “pinboard” even if they are not ready to buy them, so they do not forget. It provides DaWanda Vouchers, which are online gift cards. Consumers can purchase them in specified denominations (ranging from €10 to €150) and send them to others, who can use the funds to purchase items on the site. Lastly, the registration process for merchants to open a shop takes less than two minutes.

The company offers customization by enabling customers to request personalization of many of the items they purchase from designers. In addition, website use can be tailored as follows:

Language - Visitors can change site language settings to suit their preferences. There are seven options in total: English, French, German, Polish, Spanish, Italian, and Dutch.

Product Search – Visitors can filter their product searches based on product category, color, price range, and discount rate; shipping options; type of person; and payment modes.

Gift Ideas – Visitors can filter gift idea suggestions based on the type of recipient, the recipient‘s interests, and the occasion.

Payment Method – Merchants are allowed to determine the payment methods they will accept.

The company has established a strong brand because of its success. It bills itself as the largest online marketplace for homemade products in Germany. The website features more than 360,000 designers who sell 5.9 million products, with 15,000 new items listed added daily. It has 6.9 million registered customers who generate 20 million site visits and 200 million page impressions per month. DaWanda has also won a number of honors, including the Oskr Award during Social Media Week 2010, a #4 ranking on the Proposition Index in 2012 by consulting firm OC&C, and recognition as one of the most popular startups among Internet users by KG.

Channels

DaWanda’s main channel is its website, through which it acquires most customers. The company promotes its offering through its social media pages and online advertising.

Customer Relationships

DaWanda’s customer relationship is primarily of a self-service, automated nature. Customers utilize the website while having limited interaction with employees. The site offers a number of helpful resources, including a “Gift Finder” feature that offers suggestions based on a recipient’s characteristics, “DIY Tutorials” that provide instructions on how to make various types of gifts, a “Glossary of Trends” that identifies popular ideas in various product categories, a “Lovebook” that is essentially a catalog of gift ideas for various categories of consumers (“Animal Lovers”, “Domestic Goddesses”, “ Metallic Fanatics,” etc.), and the “DaWanda Newsletter”, a regular e-mail providing news, trends, projects, and event tips. The site also provides answers to common questions.

Despite this orientation, there is a community component in the form of forums where visitors can interact with peers, and a personal assistance element in the form of phone and e-mail support.

Key Activities

DaWanda’s business model entails maintaining a robust common platform between two parties:  consumers and designers.

Key Partners

DaWanda does not maintain a formal partnership program. However, it does invite site visitors to advertise it by adding various widgets and banners to their platforms (websites, mobile apps, etc.).

Key Resources

DaWanda’s main resources are its technology employees who maintain and enhance its website and its customer service employees who provide support. Moreover, as a startup it has relied heavily on funding from outside parties, raising millions from eight investors in five rounds as of January 2015.

Cost Structure

DaWanda 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 customer support/operations and administration.

Revenue Streams

DaWanda has two revenue streams, listed below. The company makes it free for designers to create an account, profile, and shop on the site.

Transaction Fees – The company charges designers a 10% commission for each successful sale made through the site. This amount applies even if the seller gives the buyer a discount.

Advertising Fees – The company charges designers a fee to include their products in “Promoted Listings” - ad spaces that highlight the products on category pages, search result pages, the logout page, and the DaWanda homepage. Fee amounts depend on the frequency with which sellers would like their items to be displayed.

DaWanda has indicated plans to introduce “Listing Fees” in the future. This would involve a small charge for each item listed on the site. The company states that its purpose will be to ensure quality, and that it will launch the feature once it has attained a certain number of buyers.