Reverb.com

Reverb.com
Private
Industry Musical instruments
Founded 2013 (2013)
Founder David Kalt
Headquarters Chicago, Illinois, U.S.
Number of employees
 135 (2017)
Website reverb.com

Reverb.com is an online marketplace to buy and sell new, used, and vintage music gear. The website was founded in 2013 by entrepreneur David Kalt shortly after he purchased music instrument store Chicago Music Exchange and became frustrated with the then-current options for buying and selling guitars online.[1] It has since grown into a multimillion-dollar business[1] with more than 10 million monthly visitors[2] and $47 million in funding.[3]

The website allows anyone – from large dealers and popular manufacturers to small shop owners, boutique gear builders, and individuals – to create free listings for musical instruments and other related equipment. The company has also been known to sell gear from popular artists such as Wilco,[4] Green Day,[5] Billy Corgan,[6] and Ray Lamontagne.[7] At any given time, the site has roughly half a million listings ranging from electric, acoustic and bass guitars to effects, studio gear, synthesizers, drums, DJ equipment, orchestra instruments, music-making software, and more.

To help users determine fair market values for instruments, Reverb provides a price guide of real-time transactional data. The company also offers iPhone and Android apps, which include the site's main features, and as of 2017, it has on-the-ground support in the UK, The Netherlands, Australia, Germany, France, and Japan.[8] In late 2017, the company launched Reverb LP,[9] an online marketplace for buying records and other physical music, and the Reverb Foundation,[10] a non-profit dedicated to creating more musicians by supporting programs and initiatives that increase access to music education, gear, and opportunities to play.

History

Serial entrepreneur David Kalt created Reverb shortly after purchasing renowned local guitar store Chicago Music Exchange. While working to find unique vintage guitars online for his shop and to sell gear online for extra revenue, he found that available options were cumbersome, expensive, and not tailored for musicians and the nuances that come with buying and selling music gear. [11]

Prior to launching Reverb, Kalt made a name for himself as co-founder and CEO of online broker optionsXpress, which he took public in 2005 before the company was sold to Charles Schwab, and as founder of ClientBASE, the first CRM solution for the travel industry. He began his career as a recording engineer/producer. Today, Kalt still owns the Chicago Music Exchange, but he hired a separate CEO for the store so that he could focus his efforts on Reverb. [12]

Funding

In November 2013, Reverb secured[13] $2.3 million in funding from investors including Cheap Trick’s Rick Nielsen, Lightbank co-founders Brad Keywell and Eric Lefkofsky, David Lowery of Cracker and Camper van Beethoven, Silicon Valley entrepreneur Eric Ries, and country music star Brad Paisley.[14] The company raised another $4.2 million in January 2015 before announcing an additional $25 million led by global growth equity investor Summit Partners in December of the same year.[14]

In August 2017, the company announced another $15 million in funding from 65 investors, including Paypal co-founder Max Levchin, Silicon Valley investor Roger McNamee, former Twitter COO Adam Bain, and Jon Oringer, CEO of Shutterstock.[3] Including seed funding, the latest round brings Reverb’s total funding to $47 million.

“As a regular user of Reverb.com, I am witnessing first-hand the positive impact that the company is having on musicians and the way instruments are bought and sold,” Oringer said in a statement. “I’m excited to support not only a successful marketplace - as that business model has proven itself powerful - but a company that’s uplifting an entire industry.”[2]

Growth and international expansion

In August 2017, Reverb was named No. 18 on the Inc 5000 list of fastest-growing private companies due to its 12,327 percent three-year growth (2013–2016.)[12] In 2016, the company generated $16 million in revenue and supported $240 million in sales of new and used gear through its platform.[15] As of December 2017, the company anticipated closing out the year with close to $400 million in sales.[16] In August 2016, Reverb hired its first on-the-ground employees in the UK, France, and Australia.[17] In the same month, the company launched its mobile app outside of North America. Within a year of its expansion into Europe, the company grew its users in the region by 700 percent and its sales in the region by 300 percent. As of 2017, the company has additional team members in Germany and Japan. [18]

Business model

Reverb charges a straightforward 3.5 % commission fee to the seller and a small percent for credit card processing, making the platform’s fees among the lowest of any online marketplace. Kalt has said that the growth of Reverb.com is rooted in low transaction fees and transparency of pricing provided by the Reverb Price Guide.[19] “When we started Reverb.com, musicians were getting 50¢ on the dollar when they sold something and paying 100¢ on the dollar when they bought something. By cutting fees and offering more information about comparable sales, we've narrowed that gap - and gotten millions more instruments on sale,” Kalt told Inc Magazine.[12] The company’s success has also been attributed to its live customer service team and that roughly 85 percent of employees are musicians.[20] "My experience has been 100 percent positive. You can just tell it's run by people who are musicians or who care about musicians' experience", Dave Depper, touring guitarist for Death Cab for Cutie, told Billboard.[20] Depper also cited the website’s community feel as a positive, and that he is able to buy an instrument before a tour and sell it for about the same price after. Finally, the company prioritizes content in the form of demo videos, how-to articles, and more to drive traffic to the website. The original content gets buyers excited about gear, helps foster interest in potential buyers, and drives sales.[21]

User tools

  • The Reverb Price Guide uses real-time transactional data to help users understand the value of the gear they’re buying and selling.
  • Reverb Sites - Reverb Sites enables sellers to easily create their own website — synced to their Reverb.com shop and powered by the marketplace’s technology — in a matter of minutes.[22]
  • eCommerce Integration - Reverb currently supports e-commerce integration with Magento, Shopify, BigCommerce, and WooCommerce, and it continues to support do-it-yourself comma separated value integration. [23]
  • Reverb Bump is an option available to every seller to get preferred placements within Reverb's search results, handpicked sets of gear, and front page.
  • Reverb Mobile App - Reverb offers iPhone and Android apps, which include the site's main features.
  • Affirm gives Reverb customers the flexibility to pay over time for their purchases on a schedule that fits their budget.[24]

Artist Shops

In addition to shops from individuals and dealers, Reverb has hosted gear sales for a number of notable artists. To date, Reverb Artist Shops have included sales from:

Awards

2017

  • Built in Chicago Moxie Awards[36]
  • Inc 5000 List - Ranked No. 18[12]
  • Chicago Innovation Awards[37]
  • Crain’s Chicago Business Coolest Offices[38]
  • Built In Chicago’s Top 100 Digital Tech Companies in Chicago[39]

2016

  • Crain’s Chicago Business Tech 50[40]
  • Chicago Inno 50 in Fire[41]
  • Music Inc Magazine - Company of the Year[42]


References

  1. 1 2 "How an Entrepreneur's Frustrations Created an eBay for Music Gear Marketplace". inc.com. Retrieved January 15, 2018.
  2. 1 2 "Chicago's music gear darling nabs another $15M". Built In Chicago. Retrieved January 15, 2018.
  3. 1 2 "Reverb.com raises another $15 million". chicagobusiness.com. Retrieved January 15, 2018.
  4. ↑ "You Can Now Buy Wilco's Old Instruments, Gear, Test Pressings, More - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  5. ↑ "Billie Joe Armstrong is selling pieces of Green Day history - News - Alternative Press". Alternative Press. Retrieved January 15, 2018.
  6. ↑ "Billy Corgan to Sell Guitars, Amps Used on Smashing Pumpkins Albums". Rolling Stone. Retrieved January 15, 2018.
  7. 1 2 "Ray LaMontagne Launches Shop Where You Can Buy His Guitars, Amps, Etc". Paste. Retrieved January 15, 2018.
  8. ↑ "Music Inc. Magazine — November 2017 Digital Edition". musicincmag.com. Retrieved January 15, 2018.
  9. ↑ "Discogs meets Match.com on Reverb's new online vinyl marketplace". thevinylfactory.com. December 13, 2017. Retrieved January 15, 2018.
  10. ↑ Wissmuller, Christian. "MMR magazine - Reverb Launches the Reverb Foundation". mmrmagazine.com. Retrieved January 15, 2018.
  11. ↑ "Five Minutes With...The Founder/CEO Of Reverb.com". msretailer.com. December 16, 2015. Retrieved January 15, 2018.
  12. 1 2 3 4 "The Brilliant Way One Founder Made a Killing From the Music Industry". inc.com. Retrieved January 15, 2018.
  13. ↑ "Reverb.com gets pleasant feedback: $2.3 million". chicagobusiness.com. Retrieved January 15, 2018.
  14. 1 2 "Reverb, Marketplace for Musicians, Cranks Up With $25 Million in Funding". Billboard. Retrieved January 15, 2018.
  15. ↑ "How to scale without crashing and burning? Secrets of 8 smart entrepreneurs #sbwchi". chicagobusiness.com. Retrieved January 15, 2018.
  16. ↑ https://www.americaninno.com/chicago/inno-news-chicago/reverb-launches-its-online-vinyl-record-marketplace/
  17. ↑ "Reverb Scores Hiring Hat Trick". msretailer.com. September 8, 2016. Retrieved January 15, 2018.
  18. ↑ "Music Inc. Magazine — November 2017 Digital Edition". musicincmag.com. Retrieved January 15, 2018.
  19. ↑ "Up Close: Reverb.com - Music Connection Magazine". musicconnection.com. Retrieved January 15, 2018.
  20. 1 2 "Relevant work experience for this startup? Try 10 years as a touring musician". Built In Chicago. Retrieved January 15, 2018.
  21. ↑ "MSR 01 2017 (January)". MSR 01 2017 (January). Retrieved January 15, 2018.
  22. ↑ https://www.premierguitar.com/mip-reverb-apr2017
  23. ↑ "MSR 01 2017 (January)". MSR 01 2017 (January). Retrieved January 15, 2018.
  24. ↑ Carpenter, John. "Reverb teams with Affirm to offer alternative loans for music gear". Chicago Tribune. Retrieved January 15, 2018.
  25. ↑ "Billy Corgan Is Selling a Ton of Smashing Pumpkins Guitars and Gear". Spin. July 13, 2017. Retrieved January 15, 2018.
  26. ↑ "Black Sabbath Drummer Bill Ward Selling Vintage, Studio-Used Gear". Rolling Stone. Retrieved January 15, 2018.
  27. ↑ "E Street Band Guitarist Nils Lofgren Selling Instruments, Vintage Gear". Rolling Stone. Retrieved January 15, 2018.
  28. ↑ "You Can Now Buy Wilco's Old Instruments, Gear, Test Pressings, More - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  29. ↑ "Jimmy Chamberlin Is Selling His Old Smashing Pumpkins Stuff - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  30. ↑ "Nirvana's 'In Utero' Microphones Headed to Steve Albini-Approved Auction". Rolling Stone. Retrieved January 15, 2018.
  31. ↑ "Dinosaur Jr.'s J Mascis Selling Over 100 Pieces of Gear - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  32. ↑ "Here's Your Chance to Own a Piece of Steve Vai's Gear". guitarworld.com. Retrieved January 15, 2018.
  33. ↑ "Mike Gordon Partners With Reverb To Sell Gear Used In Studio & On Tour". jambase.com. October 10, 2017. Retrieved January 15, 2018.
  34. ↑ "Nine Inch Nails collaborator Alessandro Cortini to launch new Reverb shop". factmag.com. August 19, 2017. Retrieved January 15, 2018.
  35. ↑ "Brent Hinds to Sell His Personal Guitars, Amps, and More in Official Reverb Shop". reverb.com. Retrieved 2018-09-17.
  36. ↑ "Who got the love at the Moxie Awards?". chicagobusiness.com. Retrieved January 15, 2018.
  37. ↑ Jackson, Cheryl V. "SpotHero, Bela Fleck and a skyscraper: Here's who Chicago Innovation Awards honored this year". Chicago Tribune. Retrieved January 15, 2018.
  38. ↑ "Chicago's Coolest Offices: 117 entries. 3 judges. 15 winners. Tour the winning spaces. #ccboffice". chicagobusiness.com. Retrieved January 15, 2018.
  39. ↑ "Meet Chicago's Top 100 tech companies: Employee count up 15 percent in 2017". Built In Chicago. Retrieved January 15, 2018.
  40. ↑ "Why @sixty3strat of @reverbdotcom is someone you need to know in #Chicago's tech scene #Tech50". chicagobusiness.com. Retrieved January 15, 2018.
  41. ↑ https://www.americaninno.com/chicago/announcing-the-chicago-inno-2016-50-on-fire-winners/
  42. ↑ "Music Inc. Magazine — December 2016 Digital Edition". musicincmag.com. Retrieved January 15, 2018.
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