How Listia Grew from a Pair of Snowboard Boots to 100 Million Shared Goods

“We’re trying to add all the different, non-monetary motivators to help people declutter their lives a bit and get value for their stuff.”

Listia was born of the simple desire to give away a pair of snowboard boots.

As Listia co-founder Gee-Hwan Chuang tells the story, his college buddy and Listia co-founder James Fong had a pair of boots he wasn’t using anymore. He listed them for free on Craigslist and chose one of the 20 respondents to give them to. But the guy was a no-show and Fong was left with the boots. He then listed them on eBay, but no one bid on his auction.

“He was a little frustrated with the current situation,” says Chuang as we chatted at Listia headquarters in Mountain View, California. “So we said, ‘Let’s build marketplace that’s really light, and really easy to snap a photo and give something away to someone around you.’”

Now a leader in the goods sharing marketplace, with over 100 million items traded on the platform, Listia is true to its origins of enabling people to share and trade everyday items including children’s clothing, housewares, DVDs, toys, and much more.

With over eight million members, Listia is the most successful and longest-running goods exchange around. The platform is modeled after social games that build community around a common purpose. In this case, however, the common purpose extends into the physical world, connecting people who want to share and trade items that are cluttering up their homes.

Chuang attributes the company’s success, in part, to this gaming aspect. Users get Listia credits for signing up, browsing the marketplace, listing and selling goods, and more. Credits can then be used to purchase other goods in the marketplace, buy badges, level up profiles, and get enhanced listing features. The social gaming aspect took off immediately and helped the platform get traction early on.

“If you can give away an old mug to someone and build your reputation a little bit,” says Chuang, “it really motivates you. We’re trying to add all the different, non-monetary motivators to help people declutter their lives a bit and get value for their stuff.”

Since the platform’s inception in 2009, the Listia team has seen a huge variety of goods traded, from everyday things, such as mugs and photo frames, to unexpected high ticket items, including iPads, computers, wedding dresses, diamond rings, and even broken down cars. These have all been traded on Listia.

As with purchasing additional frequent flyer miles for a flight, Listia allows people to purchase credits to make up the difference between earned credits and the price of an item. This is a key part of the company’s business model.

Building on this system, Listia recently added a new feature that allows vetted merchants to sell their credits to other members. Previously, members could only trade on Listia using Listia Credits. Now, trusted sellers will be able to turn the Listia Credits they’ve received for selling goods into real money. Sellers who have received credits for their items can spend them in the marketplace or they can choose to sell those credits to other users for cash via a credit exchange.

Listia has tested this model with a few merchants, including Best Buy and Walmart, and is now expanding it. A small group of beta users have earned over $200,000 on the platform. In the beta group, Listia saw a 50 percent increase in the number of items listed, and the value of the items listed has nearly doubled. This suggests that members may be turning to Listia instead of eBay and may be an important step in the path to taking goods sharing mainstream.

Since creating the cash option, the gross merchandise volume generated from credit sellers compared to before they could cash out has gone up 100%, which tells team Listia that it is something users welcome.

“People have been asking for this,” says Chuang, explaining that with this type of exchange, there are no credit cards involved, no banks, and no fees. “We always want to stick with our roots of having a frictionless environment where you can snap a photo, give something away, and get something in return.”

Before adding the new feature, Chuang and his team “thought long and hard” about whether or not to bring in merchants. They decided that doing so will open up the marketplace to more kinds of goods.

“Ultimately,” he says, “we want our traders to have more access to better things.”

Keeping the Listia community members happy is at the heart of the platform. The community enabled the early growth of Listia and it’s what keeps it strong. The focus on community is one of the primary reasons Listia has been able to thrive.

Chuang explains that in the early days of eBay, the platform was very much about community. People would visit the site to chat with other users and see what kind of collectibles were out there. It was a true peer-to-peer experience. Now, eBay has moved away from that model, but Listia is embracing it.

“Rather than building power sellers and buyers at first, we wanted people to engage on both sides,” says Chuang. “I think that’s what sets us apart.”

In fact, the community plays a big role in balancing Listia’s marketplace. This has a lot to do with their credit system. As credits are regularly injected into their market, the Listia team has to contend with something they didn’t originally planed for: inflation. Users accumulate credits for signing up, browsing, posting items, and more, so an abundance of credits are injected into their market. To ensure that enough credits are being pulled out to maintain a balance, they built premium options into the platform, including enhanced listings and selling features that users purchase. And, as users spend credits on new items from vendors, those credits get pulled out.

“As long as we have enough ways to pull [credits] out, then it does keep things in balance,” says Chuang

Another interesting aspect of Listia is its charity program, which has been part of the platform from the start. The program, which enables Listia users to donate credits to a variety of charities, was inspired by the awareness that by using Listia, people may not be donating their goods to charitable foundations. Chuang and Fong wanted to make sure there was a way for people to help others through Listia. To date, the platform has donated over $65,000 to charities including Best Friends Animal Society, Doctors without Borders, Wounded Warrior, Feeding America, and Room to Read.

In keeping with their original vision, Chuang and Fong would like to see Listia become a virtual repository for anything people have used and don’t need anymore.

“You can put it back into that pool and anyone else that needs it can use it,” says Chuang. “We’d like to weave it into people’s daily lives—have it be something you can use daily. You go around your house, snap photos, and easily trade with neighbors or people across the country.” He adds, “We’d love for it to be as easy to use as something like that. With the credit system, and not having to use money or fees for the majority of uses, that becomes possible.”

This post first appeared at Shareable.

By Cat Johnson

Cat Johnson is a freelance writer focused on community, the commons, sharing, collaboration and music. Publications include Utne Reader, GOOD, Yes! Magazine, Shareable, Triple Pundit and Lifehacker. She's also a musician, record store longtimer, chronic list maker, avid coworker and aspiring minimalist.