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How Does Shpock Make Money? The Shpock Business Model In A Nutshell

Shpock is a mobile and browser-based online marketplace and classifieds platform, which name recalls “shop in your pocket.” Founded in 2012 by Austrian entrepreneurs Armin Strbac and Katharina Klausberger. In September 2015, classified website conglomerate Schibsted Classifieds Media acquired a 91% stake in Shpock worth $214 million. Further growth saw Shpock expand into Italy, Sweden, Norway, and the United Kingdom to name a few countries.

Background

Shpock is a mobile and browser-based online marketplace and classifieds platform. The name of the platform is a portmanteau of the phrase “shop in your pocket”. 

Shpock was founded in 2012 by Austrian entrepreneurs Armin Strbac and Katharina Klausberger.

After graduating from a prestigious Austrian business school, the two founders went their separate ways for a few years. Strbac continued studying to earn his doctorate in entrepreneurship, while Klausberger spent almost six years working for a consultancy firm.

Fuelled by a desire to create something of their own, the pair reconnected in 2010 and participated in a start-up event.

There, they wrote a business plan for a website called finderly – a site helping consumers find the best electronic products using a community-based recommendations tool.

Two years later, they held a workshop designed to flesh out a new app that would support the website.

During the workshop, they heard consumer complaints about the cumbersome nature of listing products for sale online.

This was particularly true for eBay Kleinanzeigen – a classified app dominating the German-speaking market forcing users to spend around thirty minutes uploading the required information.

Shpock was launched to the same market in 2012 and had amassed over 100,000 downloads in just three months. Nine months later, this figure had grown to 1.2 million downloads. Funding was then secured to completely redesign the app and enhance the user experience.

In September 2015, classified website conglomerate Schibsted Classifieds Media acquired a 91% stake in Shpock worth $214 million.

Further growth saw Shpock expand into Italy, Sweden, Norway, and the United Kingdom to name a few countries.

Shpock revenue generation

Shpock has a revenue generation model typical of many online marketplaces.

Following is a look at some of the core components.

Advertising

Shpock offers advertising to sellers which it claims allows them to take advantage of “a young, curious and mobile-first user base, who love exploring new things – everyday. People who browse on Shpock are truly in a shopping mood and are particularly valuable to advertisers.

Sellers have a lot of flexibility with Shpock advertising. They can choose from a variety of ad placement positions and types. They can also target buyers based on location, interest, gender, age, and search terms.

Shpock earns money through advertising on a per-impression basis. When a buyer sees an advert, the company takes money from the monthly advertising budget of the advertiser.

Premium membership

Premium members get access to several perks, including:

  • Shpock Super Boost – allowing sellers to choose two items per month to appear at the top of product listings.
  • Unlimited Photo Credits – allowing sellers to list products with ten accompanying photos instead of five.
  • Ad-free – lastly, an ad-free experience on both mobile and web.

After a one-week free trial, membership prices depend on geographic region.

Shpock+ Shops

Shpock+ Shops is a service helping businesses sell their products to users on a commercial basis – either directly or through a shop.

Features include customizable storefronts, unlimited product listings, branding, customizable price points, and related product suggestions.

Prices range from €19 to €99 based on the level of functionality desired for a yearly-based subscription. A similar service, Shpock+ Motors, is available for the automotive industry. 

Prices are available on request.

Key takeaways:

  • Shpock is an online marketplace and classifieds platform created by entrepreneurs Armin Strbac and Katharina Klausberger. Both saw a need to improve the inefficient process of listing products for sale online.
  • Shpock makes money through advertising by charging sellers on a per-impression basis. It also offers sellers a premium membership to enhance their listings.
  • Shpock also offers solutions to commercial sellers who need to sell unlimited products through a storefront. The company charges an annual subscription fee based on the level of functionality desired.

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Related Business Model Types

Platform Business Model

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A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

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A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

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A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

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In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

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In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

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The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

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A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.

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Crowdsourcing Business Model

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Open-Core Business Model

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While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

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Freemium Business Model

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The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

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Franchising Business Model

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