Founded in 2008, the Finnish company Netcycler is reinventing the C2C marketplace by building so-called trade rings. Instead of facilitating one-to-one swaps, they create trade rings of three or more people. Each ring member both gives and receives something increasing the possibility of getting what you want swapped against something you don’t need. For a small charge, Netcycler offers a shipping service to deliver the items if your swap buddy is not located nearby.
Extending swap services into the USA
Mid 2012, Netcycler acquired Swap.com making their way into the US market. The then eight years old Swap.com could not make their business model work. The fee-based swapping service of 50 cent per swap as well as a freemium model did not add up to significant revenue. With the introduction of Valet Service, Netcycler refined the business model targeting parents with kids and offering storage services. For a flat rate $8.90 you can ship your items to the Valet Service for 45 days free storage and start your swapping or selling. Netcycler (still operating under Swap.com in the US) charges a fee for extending storage, sales commission when not swapping but selling and shipping fee for a shopping cart value under $50. With this new business model, Netcycler claims to undermine the inherent problems of current online marketplaces such as unreliable delivery and distrust between trade partners.
Echo your sales price to other items in the trade ring
Netcycler introduced another innovative way of leveraging the trade ring model, so-called Netcycler EchoTM. The sales price set by the owner of an item is echoed throughout the trade ring. In other words, any other item in the trade ring can be bought for the same price. This is truly a unique way of leveraging the network effect of the internet.