Idea: Improving the college buy/sell marketplace

In 2019, there were almost 20 million undergraduate students enrolled in 4,300 colleges across the United States. Each spring, these students wrap up their classes and exams and look ahead to the summer. But for many students, one final obstacle stands between them and freedom: moving out. In the span of a few days, students pack, clean and move-out from their dorms/apartments.

And during this time, the individual campus Facebook Free and For Sale groups explode with thousands of posts from cash-strapped college students who are looking to make a quick buck by selling their items. School supplies, textbooks, furniture and household items dominate the list, and college students are really desperate for extra cash (see: lab notebook half used: $2)

In recent years, these campus Facebook free/for-sale groups have transformed the way items are sold in colleges. They’re often exclusive to members of the campus community who have university email addresses, providing an additional layer of security/comfort. They’ve become the new Craigslist for college campuses, connecting thousands of buyers and sellers to each other. For most of the year, these Facebook groups are a pretty good marketplace.

But come move-out season, everyone is looking to sell. When everyone is trying to off-load at the same time, who is looking to buy?

As you probably guessed, few people want to take on the burden of storing additional items over the summer. And unless you’re buying/selling a large quantity of items, it probably doesn’t make sense to find storage, no matter how good the deal is (See lab notebook half-used: $2).

This leads to market inefficiencies on both the supply and demand side. Huge amounts of waste are generated because sellers can’t find buyers — trash rooms are piled to the ceiling with unsold, perfectly usable items, from mini-fridges to couches to textbooks.

According to Tufts University [~12,000 total students], … during the months of May and June, their students leave behind an average of 230 tons of waste.

Fast forward 3 months: Students are beginning to arrive back to campus for Fall semester. And now, the exact opposite is happening. Facebook free/for-sale groups are flooded with cash-strapped students are on the prowl for discount school supplies, textbooks, furniture and household items. But alas, no more $2 half-used lab notebooks are available.

How do you coordinate a massive spike in demand that comes exactly 3 months after a massive spike supply?

Many colleges have some mechanism to try and reduce year-end waste. Some schools collect unwanted items, donating them to charities. But secondhand stores like Goodwill or The Salvation Army are ill-equipped to handle massive spikes in donations.

Other colleges gather unwanted items and store them over the summer, hoping to re-sell them in the fall. But these items are often collected at random without guaranteed buyers. Any unsold items are thrown away and storage costs on these items wasted.

What if there were a platform that could connect Spring sellers to Fall buyers, while taking on pick-up, storage, and delivery? Could such a platform achieve enough economies of scale to make a profit?

Let’s call this platform UWU, short for [U buy, We store, U get]. Better names are always welcome.

1. Sellers list items on UWU. Items are free to list, but if sold, UWU takes some X% surcharge to cover storage. Sold items are to be dropped off at designated location, home pick-up may be an option for an additional surcharge.
2. Buyers agree to purchase items and pays listed price. UWU pays sellers their cut.
3. Sale period closes and UWU calculates total storage space required to store all sold items.
4. UWU negotiates with local storage facilities and truck rental companies for discounted rates. UWU hires students to facilitate packing, moving items to storage and any administrative tasks.
5. In August/September, UWU hires additional students to bring items back to designated pick up location. Buyers pick up their items, with home delivery available for additional surcharge.

Bringing UWU to market:

1. Code the UWU buy/sell platform.
2. Research which campuses to launch on. Ideal campuses will have a large student body, be located in a region with cheap storage costs, and have a high summer move-out rate. Students will live in a centrally located area to minimize transportation costs.
3. Model the X% surcharge for each campus to be profitable. Factors to consider: estimated volume, storage costs, truck rental costs, fuel costs, average item size.
4. Market the platform on test campuses.
5. Launch! Steep discounts offers might be necessary to capture market share and sufficient volume. Funding will be required to support operating losses initially. After market share is captured, might deploy pricing increases to gain profitability, similar to the Uber model.

Risks to consider:

• This model only works with sufficient volume of sellers and buyers. If either is missing, then platform is not useful.
• While UWU does bridge an unmet need, it’s a fairly easy concept to replicate with low barriers to entry. Protecting our market share will be crucial to long-term success.
• Whichever platform is first-to-market will have a significant advantage. Once UWU is up & running at test campuses, the remaining nation-wide rollout needs to happen quickly before competitors launch in campuses we have not targeted.
• College students have already left campus in 2020 due to the COVID-19 pandemic. Our first opportunity to launch/test may be in December 2020 for winter graduation.
• Our user base will change ~4 years as students graduate. How do we ensure incoming students are aware of UWU? How do we ensure UWU is used year after year when our user base changes so quickly?

Additional thoughts I might revisit later:

• Are there better alternatives to renting out storage units? Many colleges cater to a large undergraduate population that is not around during the summer term. Could UWU negotiate with colleges to store items in empty lecture halls, dorms, parking lots at a cheaper rate?
• How to capture the Facebook free/for-sale user base? Are there other features that UWU can offer that would facilitate year round transactions and eventually replace Facebook free/for-sale groups?
• What is the market size for such a platform? I thought about estimating market size by manually analyzing total items sold in my alma mater’s Facebook group from 2019, but turns out it takes an impossibly long time to scroll back that far.
• Is there an opportunity for coordination across campuses that are located close to each other? Ex: WashU/SLU, Duke/UNC?

This is the the first post in my collection of random business ideas. More random ideas coming soon hopefully. To connect/discuss further (or to provide seed funding?!), reach out to me here. As always, views are solely my own and do not represent my employer.

Special shoutout to my good friend Mike Bacior for inspiration and support.