In July of 2022, Sweetwater launched the Gear Exchange (GX), providing users a trusted platform from which to buy and sell used musical instruments and related gear. Users can leverage this site to earn extra cash – a welcome offsetting factor to combat inflation – and turn their old gear into new purchases, or purchase a used instrument at a more affordable price or snag a hard-to-find vintage item. Sweetwater ensures the satisfaction and comfort of every customer and, through the company’s “certificate of approval” badge, known buyers and sellers are verifiably dependable.
MMR recently connected with Andy Rossi, VP of Gear Exchange, to learn more about this new and expanding MI retail platform.
What exactly was the catalyst behind the launch of Gear Exchange? When did the team over at Sweetwater start discussing it and why?
So, for quite some time, Sweetwater had what I’ll call a bulletin board. And it was merely there to allow musicians to, you know, have an electronic board where they could post an instrument and it was truly sort of like an electronic “classifieds section.” There was no actual marketplace activity, no card to transact. And Sweetwater really wasn’t involved in those sales. And then a couple of things happened: one was Sweetwater is very much focused on helping musicians get the gear they want and doing it in a way that they really have an amazing experience. I mean, that’s what Sweetwater’s been built on and doing for decades; two, it started to occur to folks at Sweetwater that, “Hey, there’s a part of the journey that we think we could actually help with, that we’re not currently really involved in” – and that’s both the buying and selling of used gear. There’s a long journey there that, generally, if you’re a gear nut and you’re going through the cycle, you’re buying and selling new and used in one shape or form or another. And we thought that maybe we could make that process and that part of the journey better. At the same time, we were getting a lot of questions from our customers saying, “Hey, you know, we’d love to do this with you guys. Can you guys offer us a way to help move the gear?” And it all just came together.
Bearing in mind that most of our readers are MI retailers, many independent stores make use of platforms like Reverb, eBay, and the like. Is Gear Exchange is a more advantageous platform for dealers?
Well, right now it’s strictly C2C, it’s peer-to-peer – musician-to-musician. And we are listening to other retailers. It’s a funny thing because you’d think that other retailers might say, “Well, Sweetwater is my competition, there’s no way I would want to be on that platform or in that marketplace.” But they know the quality of Sweetwater and the way we treat all relationships. And so, we are getting some inquiries about that. But right now, we’re not inviting other retailers to be on the marketplace. But that’s not something that we’ve ruled out for the future. We’re still really building the site right now.
Understood. Taking the retailer aspect out of the equation, why would an individual looking to sell, say, a vintage Gibson Melody Maker choose Gear Exchange over any of those other available and established platforms out there?
Well, the first thing is, I spent some time at eBay running the MI category. And before that, I was running global sales and marketing for Fender, and for KORG, and things like that. So, like many of the folks who will read this, I’m super familiar with the various marketplaces and what it’s like, including outside of the MI industry. And one of the things that I’ve studied is that one of the drivers for sellers and buyers on a marketplace is how much they trust where they are, how confident that you feel, how comfortable they feel, how much they feel it’s going to be a safe, secure, environment and transaction. Gear Exchange is the only platform, the only marketplace that is owned, operated, and was created by a major retailer, the number one e-com retailer in the nation. So the first thing is that no other marketplace has a retailer attached to it. And behind that are all the Sweetwater “Do the right thing” tenets – the way we approach the business, integrity, honesty, and all of that. The comfort, safety, and trust factor, and what you know, and have experienced with Sweetwater, all applies to Gear Exchange. So right there, that’s a big driver. Number two, is we’re the only ones who have a zero-fee program. So you can sell that Melody Maker that you’re talking about on Gear Exchange. And if you choose to take a gift card as your payout, we’re going to waive the seller fee, the processing fee, and you will pay zero fees.
And in return, you get a Sweetwater card that you can use to buy whatever gear you like?
Right. You’ll take that Sweetwater card and you’ll spend it over at sweetwater.com. You’ll work with one of our SEs, which is another differentiation point. We have a group of 500 or 600 experts that are there to help you purchase that new gear along with inventory expertise know-how, all the warranties, guarantees, and that Sweetwater approach. So, that links back to what I said about we can really help in the entire journey of selling used on Gear Exchange, and then moving over into sweetwater.com and buying new. We can be there really from the A to Z of that process. No one else is offering a complete zero-fee program, so you combine that safety expertise and zero-fee, and it creates a really unique experience.
For those sellers who, for whatever reasons, opt to go for straight-up cash compensation, what is the fee and how does that compare it to some of the similar, if not quite equivalent, platforms?
You can absolutely choose to take payout to your bank, so to speak, and a lot of folks would do that. It’s a 5% selling fee, which is on par with some of our friends in other marketplaces, and it’s a 2.5% processing fee. That’s not something we keep. 7.5% is at or less expensive than our friends at other marketplaces. And I say “at or less,” you see me sort of modulating there because other platforms sometimes have preferred levels. You get your preferred customer or different selling fees for different categories. Everyone is preferred. We treat everyone the same. We love everyone. And all categories are that 5% and 2.5, so 7.5 forever.
Got it. Going back to the aspect of reassurance that comes from dealing through and with Sweetwater, can you talk a little bit about the “certificate of approval” badge, and how sellers go about attaining that, and how Sweetwater goes about vetting candidates before they bestow that sort of categorization upon somebody?
Sure thing. So, the first thing is that, as a seller, when you come into the site for the first time to create your profile, your storefront, create your listings, and get engaged with the site, one of the things that we’ll ask you is, “Are you a Sweetwater customer or have you been?” We may recognize you and say, ”Oh, do you want to place a badge on your profile that says, in my case, I’ve been a Sweetwater customer since 2016?” And so that badge of honor is something that you can place there and it has a lot of meaning to it. It obviously means that we know you, you’re in our records, we have a history together, we have a relationship, we know the products that you’ve purchased from us, what you prefer, how you’d like to pay, all these types of things. Then, as a buyer, when you see that, you know it’s someone that’s vetted and someone that we know, so we’re proud to have them on the site.
There’s also all the usual feedback mechanisms where if you sell that hypothetical Melody Maker we’ve been discussing and I buy it, and it was a great experience, and I rated you, it will show that feedback. It also helps in terms of the speed of the payout and things like that.
So it is merit-based, either as it pertains to an individual’s history with Sweetwater or on the history of using Gear Exchange. Now, once a seller has the Sweetwater “badge of approval,” if somebody orders in good faith from that source and things go south, is there some sort of recourse that Sweetwater offers?
Oh, absolutely. Obviously, in the transaction between the buyer and the seller, there’s all means of ways to communicate back and forth. And if there’s a miscommunication or there’s a less than great-behaved buyer or seller, or there’s some other issue – it could be one that is no one’s fault – in any case, if we’re contacted, and someone says, “Hey, I need your help,” we are there. Part of dealing with Sweetwater is that we have extensive customer service, customer support, fraud protection, credit check. All those types of safety factors that you want in the purchase of new gear all apply to any transaction that occurs on Gear Exchange.
So, we are absolutely there before, during, and after the sale. And every day, there’s something going on where a mistake happens. And we are directly speaking to buyers and sellers helping to rectify and satisfy any situation. And we always have a good outcome. We also do a couple of things that only Sweetwater can do because we’re a retailer. So, we apply all of that do the right thing mentality to everything that goes on on GX.
Gear Exchange is still relatively “young” and, while I’m aware of it and have been because I’m a gear nerd, it’s been curious talking to bandmates and other musician friends how relatively low-profile GX is for some out there. Do you have tons of folks on the site; are you trying to grow the tribe, so to speak, or is Sweetwater happy where it is?
Oh, several points there. First of all, we love, at this point, when we hear someone say, “Oh, I didn’t know about it,” because that tells us – and we know this already – that the potential to be able to interact with more musicians is there. And the reason I say that with a smile is because we want to do this right, not necessarily fast. We have been very, very careful and thoughtful about the way that we have been building the site. And it’s been a very interesting evolution. If you look at the Gear Exchange site when it launched on the 15th, and what it looks like today, and what it’s going to look like 30 days from now, and 90 days from now, the evolution of the site in terms of UI/UX features, just the general visuals are all changing and evolving. And we’re doing it very carefully.
And because we want it to be right before we invite everyone to the party, which is allowing for natural organic growth. We are alerting our customers and folks that we know, “Hey, we have this.” We certainly are reaching out through folks like yourself. But we’re not pushing very hard in terms of communicating to the entire musical community because we’re still evolving the site. But we’re there. Now, the site has been growing exponentially month over month – and it is every day that I look at the data, the next day, the data has completely changed. And that’s because it’s growing and the GMV or sales and the amount of sellers, the amount of listings, it’s all growing very, very, very fast, organically.
Is there anything, whether it’s in terms of promotion of the site, or added functionality, or any other developments on any sort of level when it comes to Gear Exchange that you have planned that you’d like to share with our readers? Are there any big initiatives, promotions, events, et cetera?
It’s more about the user experience. One of the things that we’re very, very focused on, and this runs all through the DNA of Sweetwater and certainly throughout Gear Exchange, is we listen very, very intently and intensely to customer feedback, good, bad, and in between. We have a lot of dashboards, we have a lot of feedback boards, where we’re hearing directly from users, buyers and sellers, about their experience. We take that information throughout the teams here and we act on it, whether it’s a feature suggestion, whether it was an experience that that was less than tremendous. If it’s tremendous experience and really amazing, we make sure to continue that and bolster it.
So really, what you’re going to see us do – and this may sound vague, but it’s really our mentality right now – is we’re really working very closely with the community that’s on Gear Exchange to listen, learn, improve, evolve, and serve. We want to make sure that the site is evolving with the input of the community that’s engaged in the site to really see it evolve, and take on features, UI/UX, as I said, that really reflect what folks want. So, I wouldn’t say that there’s one big feature that I have hidden in my pocket. It’s just a constant chipping away and molding to make the site really grow organically in its finest form.
