Credit-Crunch Startup: SpeedSell arrives to take the hassle out of selling second-hand

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Back during Seedcamp Week in London last year I sat in the audience and when SpeedSell presented I twittered something like “I love Speedsell, I may as well go home now”. That was a bit of an off-the-cuff remark and time proved that the VCs weren’t as enthusiastic about its model (VCs want things that “scale”) as it didn’t win the final investment. But having just had a bad experience with eBay, I liked it.

What is this all about?

Well, instead of going online to eBay or some other site to sell your unwanted stuff, SpeedSell gives you an instant online offer with a price and offers free home collection “tomorrow”. The model means it has to warehouse stuff (hence the VC ambivalence, they tend not to like physical stuff) but it does mean that this is going to be a startup to watch during the recession. And SpeedSell is not a competitor to eBay but an ‘introducer’ of incremental business to eBay. Estimates suggest that although 50% of consumers buy on eBay, only about 2% sell because its too much hassle. I’d agree!

SpeedSell offers free courier collection anywhere in the UK for all trades over £10, or you can post it to them. The items are then checked at SpeedSell’s processing centre and sellers are paid within a few days, by cheque or PayPal inside 2-14 days.

The prices offered are typically two thirds of what SpeedSell’s proprietary analytics predict it will achieve when reselling the item in secondary markets (like eBay). It makes money on the ‘spread’ between the price it buys at, and the price it sells at. Not a billion miles away from what old ‘rag and bone’ men used to do.

One of the big things things they plan to trade in is games consoles and games released since 2000 – there are plenty of those.

SpeedSell is also not unlike Gazelle.com (formerly SecondRotation.com)which raised a Series A and Series B in 2008, totalling around $14m.

Others include Venjuvo, Dealtree (EZTradeIn.com), CeXchange, EcoNewOnline, and a couple of other smaller players.

The CEO is George Bevis, a very smart chap (I’ve met him) and an ex-banker who quit the Royal Bank of Scotland to focus on SpeedSell in September last year.

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