MARKETPLACE – Trading Scrap via App turns Chat into Marketplace
“Mobile-first”. The motto says a lot. But seldom has a company been so focused on mobile applications as scrappel – the developer of the digital marketplace for recyclable waste trading. Non-ferrous and scrap iron can be traded via the marketplace. It feels a bit like trading using WhatsApp or Facebook Messenger. Only more secure.
When Matthias Spanic, CEO of scrappel, is asked to explain why the marketplace comes across more like a WhatsApp solution than a traditional commercial platform, he likes to say that, for him, the most important thing is to make it possible to “experience real life digitally”. In this industry, negotiations for scrap metal often take place during conversations between merchandisers. “Mobile first” picks up the situation from there. When the negotiations are happening “on site” (often via WhatsApp), the goal is to move these conversations to the new mobile app. scrappel’s customer base includes the approx. 20,000 commercial aggregate merchandisers, smelters and foundries which do business in Germany with iron, metal and steel scrap as well as other recyclables.
First-time scrappel users will quickly get their bearings. “We do not want to invent anything new, only adapt ‘real life experiences’,” Spanic says. That’s because the usability is reminiscent of commonly used mobile Apps like WhatsApp and Facebook Messenger as well as eBay for promoting goods for sale. “The conversation about an advertisement, through negotiations, to price and volume talks and transport, right up to the acceptance of the weighing certificate, all takes place on a chat thread which is linked to a user,” Matthias Spanic says.
Scrappel’s vision is to make it easier for suppliers and buyers of non-ferrous metals and scrap iron to find each other using the app (or via the desktop version) and negotiate the best prices and volumes for their offers. When a scrappel user advertises scrap for sale, the price and delivery agreements are communicated in a central chat format. scrappel verifies the identity of its users beforehand as part of the initial registration process to ensure the greatest possible security for everyone.
Though building a marketplace infrastructure sounds complicated and expensive, the use of microservices simplified the entire process. The foundation was the eCommerce platform by commercetools, which made quick implementation possible. All the services required for the app came “ready-made”, though customized. The availability of agile microservices was therefore an important factor for seamless implementation. The entire process – from contracting to completion – took only six months.
At the same time, solid “offline” preparation helped as well: “Prior to starting, we met innumerable merchandisers in Germany in person at their premises or held workshops with them in Berlin to find out their problems and needs. In doing so, we noticed a pattern which we then concentrated on.” That is how a ranking list emerged for basic services up to the value-added services. “It helped to define the project scope,” added Spanic. Many functions are still in the works.
A phased approach is advised
Spanic absolutely did not want to enter the market with a complete solution all at once. “A single error could have a ripple effect through the entire application and its processes,” he notes. His advice: “When working with complex products, young markets, different customer personas, and, most certainly, with marketplace concepts, start lean and involve customers as early as possible in the process.” After the initial experiences with the customers, you can then roll out additional features.
scrappel started with a great advantage, though: It began with a payment function which included an escrow service, turning the marketplace into a full-service package. This is because payment processing runs entirely through scrappel. This consists of an escrow account to help engender trust on all sides. It guarantees a secure and transparent transaction. During the payment process, the amount can only be released from the escrow account if the purchaser confirms receipt and the agreed upon quality of the delivery via a digital weighing certificate.
Why not simply use PayPal?
Why should you?
Having an in-house set-up offers lower transaction costs and creates the option to add on additional banking products. The verification, on the other hand, is taken care of by strategic partners like with IDnow. As part of the KYC (Know Your Customer) process, all potential customers are identified with their personal ID card using the web or mobile video ID procedure. It is as secure as a bank transaction and in the best interest of the merchandiser. Especially in an industry that deals with scrap, you want to ensure all parties and the goods are legitimate. To a certain extent, that can also be said of developing the app itself. The development and implementation approach scrappel applied, utilizing both a Minimum Viable Product (MVP) and Minimal Marketable Product (MMP) development steps, as well as using flexible and customizable microservices, makes room for innovation. In this innovative marketplace for scrap, nothing will be getting rusty any time soon.