Content originally published at iBankCoin.com
Mitsumoto launched an app in June to test the idea, quickly realizing that that people – surprise – went for the money, putting him on the hook for $3.2 million (360 million yen).
“after 16 hours, he was stunned to discover he was on the hook for 360 million yen ($3.2 million) and shut the service down.A day later, truckloads of clothes and electronics gadgets started to arrive, with his startup’s employees forming a bucket line to move packages into his company’s tiny office in Tokyo.” –Bloomberg
But then, to Mitsumoto’s surprise – people took the moneyand then brought their stuff as promised! At the end of the day, only 1 out of 10 second-hand-sellers didn’t deliver.
In August, Mitsumoto relaunched the service called Cash, as a new way to gather inventory for an online flea market. Total daily purchases are capped at 10 million yen – and must be comprised of items on a list including; smartphones, luxury apparel, watches, clothing, and other specific items on a list of several thousand.
Customers can also snap pictures of their items and shoot over a non-negotiable offer.
“It was a social experiment,” said Mitsumoto, who started selling goods on the web in 1996. He later launched Stores.jp, Japan’s version of Shopify, which he sold and then bought back. “Of course, I believed that good people would outnumber the bad, but the question was by how much. That’s not something you can find out without trying.”
The market for second-hand goods is strong in Japan, valued at over 1.6 trillion yen ($14 billion USD). Yahoo Japan Corp. operates the country’s largest online auction site, Mercari, which became the first Japanese startup to be valued over $1 billion.
So when Keishi Kameyama – one of Japan’s richest entrepreneurs and founder of DMM.com came along, Mitsumoto agreed to sell Cash to DMM for 7 billion yen ($62 million USD) and continue running the business.
“For people doing internet businesses in Japan, DMM is a scary presence,” Mitsumoto said. “You never know when they may launch their own business and become a tough rival. I figured it’s best to at least meet.”
Indeed, a week after the deal was announced, Mercari launched an identical offering. The move by Cash proved that there was a need for such a service, said Takeo Iyo, the vice president in charge of Mercari Now. –Bloomberg
So – what do you think, would a thrift shop app work outside of an honor-based society like Japan?