Nate Spiteri: It's a bit weird. I think the first two weeks is like a love island sort of situation where you're just kind of like pairing up with people who have a separate skill to you. If we were more mature, a lot of these marketplaces that went under sustainability, businesses that went under might have been able to integrate with us. We could have actually helped them. We're really just trying to make do our best to make people's lives easier when they're participating in these environments.
[Voiceover]: Welcome to Add to cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast
Nathan Bush: moving world of online retail. Here's your host, Bushi can tech really simplify the really tricky world of the secondhand economy online? Nate Spiteri thinks so, and his journey from seller to SaaS founder reveals why he could be onto something big. Welcome to another episode of Add to Cart. My name is Bushy, joining you from the land of the terrible people here in Brisbane, Australia. From his roots selling Jordans on depop in London to building a SaaS business that's caught the eye of investors such as Antler and Paul Greenberg, Nate's journey is challenging the way that sellers connect with marketplaces like ebay and depop. And he's doing it with purpose to simplify and supercharge the secondhand economy online. In this episode, Nate Nate shares how Shopfront is solving real pain points for sellers. Think automating inventory management, avoiding the dreaded double sell, especially when you've got one inventory item and leveraging AI to make listings faster and smarter. You'll also hear his take on how the secondhand market is evolving with the opportunities for retailers to list returned or unsold items. Potentially a brand new market for you retailers, and he tells us how brands can embrace sustainability without sacrificing sales. One thing that stood out for me, Wait till you hear the stat on how much unused value Australians have hiding in their homes, especially their wardrobes. It'll blow your mind. Friendly reminder before we get into the chat that Add to Cart has its own weekly newsletter written by me every Tuesday morning I share key e commerce insights from the past week. Sometimes random thoughts, sometimes insightful commentary. To help you stay informed and inspired in your job, you can sign up for free at addtocart.com forward/subscribe. Big thanks as always to our partners Shopify and Klaviyo for making this episode possible. Now let's jump into my chat with Nate Spiteri, the man building bridges between sellers and marketplaces with Shopfront Nate, welcome
[Voiceover]: to add to cart.
Nate Spiteri: Cheers, Nathan. Appreciate it. Looking forward to it.
[Voiceover]: So am I. We've been speaking a little while on LinkedIn, back and forth on LinkedIn messenger, and then I opened up the the Antler email a couple of weeks ago, and front and center was Shopfront, including your investment pitch deck. And I read through that and I was like, oh, this is really interesting. I think there's something here beyond what we were talking about. It's kind of gone to that next stage. Tell us about Shopfront. What is Shopfront and how did you start it?
Nate Spiteri: Yeah, I'm glad you. You read the email that these people are opening the pitch decks. That's a good sign. No, so Shopfront's essentially building, or we're building, a integration layer between sellers. And by sellers, I mean a wide spectrum of sellers, like individuals, the SMBs, all the way up to retailers and marketplaces that sell alternative and secondhand goods. So think Depop, eBay, Etsy, Facebook marketplace. Essentially what we want to do is create software in the middle that enables these sellers to more easily sell and reduce the time that they need to list and time to manage all the different platforms, starting with the way that they list. So creating the listing and sending it off to several platforms at once, as well as managing the inventory level. So delisting when it sells on one. So you're not. Not incurring a double sell if someone happens to buy it on two marketplaces at once.
[Voiceover]: Gotcha. And when you talk sellers, are you talking retailers? Are you talking individuals?
Nathan Bush: Who's the ideal seller?
Nate Spiteri: Yeah. So for the first 12 months, we've. We've got a really niche ICP, so initial customer profile that we're looking into. And it's your kind of individual sellers that generally participate in, like Sunday markets, might have a Depop account, but also a Shopify. And we found these individual sellers to be struggling because it's so fragmented in the environment for them. And plus they're juggling live selling. It's also a space that I know quite well and I'm quite used to be a participant myself, and I've sold quite a bit on Depop, etc. So it felt like the best first way for us to kind of start building the product. It's a really awesome community to. To help. So I've set ourselves a goal of acquiring a bunch of these users in the next 12 months as our first kind of customer profile before we start rolling out to discuss this earlier. But like major charities, larger retailers that maybe are dealing with A lot of returned and damaged goods and, and then how we can kind of be the missing link between them and their distribution channels online. So that's, that's how we envisage the next kind of 12, 18 months going, how the product evolves. It's kind of scaling in a sense of building more customer bases that are kind of increasing on the number of listings that they're putting out per month.
[Voiceover]: Awesome. So a connector between sellers and marketplaces isn't necessarily unique, but in your situation where you is it primarily for used goods?
Nate Spiteri: So our initial product would be secondhand fashion. We see the product verticalizing out very quickly to like furniture, collectibles goods, antique goods, you know, even vehicles and automotive because that's a super fragmented space as well in the auction space. So yeah, even musical goods. Like the spectrum is quite big. We found a really nice ICP to go after beginning and that's what we're going to focus on. I guess where we're different is you'll see a lot of our competitors are pretty either locked down on one customer profile and segment or don't have many marketplaces as in secondhand alternative marketplaces that they're integrated with. Our biggest competitors are also out of the US and other geographies and haven't really moved outside those regions. So I think there's a lot of room to play in Australia, APAC and even Europe. And that's who we want to go after very quickly and scale very fast. So we're also only one of few venture backed because we have this kind of big vision of being the big connector between the whole ecosystem and yeah, that's the kind of play that we want to roll out over the next couple years.
[Voiceover]: You mentioned there that you were a seller and that's where you realized the issue. What was your background there?
Nate Spiteri: My background is actually quite boring. I started off in financial services and banking mainly to please the parents. My dad was a banker. But that's a story for another day. And so I was always dabbling in like fashion and building my own brands, always like in the sneaker game, reselling like Jordans and buying Yeezys to resell and that sort of thing. So particularly when I was in London during the cost of living crisis where they've got more marketplaces and people are more active in the community, I found myself kind of selling, you know, at least five items a week or something like that also to maintain my own wardrobe. So I feel like I know the marketplaces like the back of my hand. And then I just felt the pain when I moved back to Australia a bit more because it was a bit more fragmented, it was a bit less mature. And so yeah, initially probably I'll talk about this later, but I wanted to build a challenger marketplace when I joined the antler residency. And yeah, after some validation, exercising and speaking to actual customers, we realized that wasn't the solution. It was actually creating a better seller experience. So you encourage participation rather than trying to service both sides of the market.
[Voiceover]: And so the idea being that a seller will normally only have one inventory count of a product, is that right?
Nate Spiteri: Yeah, so it's unique. SKUS is kind of how we identify the sort of product that would be fit for us. So we don't, we have, we don't generally have like quantity as a, as a field for the products when you list it with shop front because they're, they're unique. So yeah, it's mainly for those one off goods.
[Voiceover]: And what else is unique around the second hand market that most people, if we're in the normal, the normal, the normal e commerce world of, you know, huge inventories, traditional retail, what would we not realize is so complicated around the secondhand market online?
Nate Spiteri: Yeah, so I've seen a lot of like, people seem to think that you can rely on metadata and things like that just from like your, your e commerce store. But in our opinion it's not, it doesn't really do justice when you're trying to sell a secondhand good because it could be impaired to a certain degree, could be from a certain era. These are just not things that you can pull from any sort of database. Which is why we're trying to build AI tools and recognition tools using things like AI prompt chaining to look at the image, then analyze that against Shopify's taxonomy mapping and then spit out what we think would be all the categories, all the tagging and everything that we need. So I think there's a lot of work that needs to go into that. And the reason second hand listing is so difficult is because the everyday person struggles to identify a, how to explain a certain product if it's not, you know, from this era or if it's not a trending item and B, how to talk about the impairments or talk about the condition in an accurate way. And so we're hoping that we can develop our AI to make that super seamless. And the goal would be to remove any friction in listings so that all you would need to do with Shopfront is upload your 5 photos either in bulk or Individually we'll remove the background and edit the photos to touch it up and then we'll do all the listing creation and details for you. And then what we'll also do is map that to every marketplace. So instead of juggling I think this is present in the retail primary market as well. But every marketplace would have separate taxonomy settings. Like you have different sort of requirements for each marketplace so it's not even in the primary market a copy and paste exercise. It's a matter of matching what your source information is to every other marketplace. And I think that's the crux of what we're building and that in itself has so many applications. I've spoken to like Amazon sellers before and non non unique good sellers and I think it's a direction we could go in the future. It's just not where we're going right now because that's the same backend is kind of something we can repurpose for that that same problem.
[Voiceover]: So as the vision say you go back to your Jordan example, got a pair of Jordans in the cupboards ready to list them. The idea being that you can snap a couple of photos of it. AI picks up, you know, what year, what make, what condition they're even in based on the photo and then populates that form you and then uploads it.
Nate Spiteri: Yeah even an estimate price which I think is another pain point because yeah primary market sales is, is kind of pretty obvious what the price is. It's the same across market but to figure out what sort of price you need for a secondhand and or alternative good needs different data sources. And you know our AI model isn't perfect, it's not even something we built. We're relying on just kind of an open source model at the moment which is pretty basic but next year once we've kind of closed off this current funding round, we're looking to build that into a more robust system so that it is picking up accurate price from the right sources. And I think that's the dream. And we actually use an old picture of my Jordans as our testing that we multi list all the time. So I've been stress testing the product more than anybody.
[Voiceover]: Hang on to those Jordans. Right. They're the ones that you'll frame on the wall when you turn into a to a multi million dollar venture.
Nate Spiteri: I'm not going to sell them just yet. So we take it off.
Nathan Bush: I'm really interested in your take on
[Voiceover]: the second hand marketplaces out there. Obviously you've mentioned ebay which we're all very familiar with Depop is more of an international one from what I understand and hasn't got as much traction in Australia yet. Tell us about where you see the marketplaces going in terms of second hand in what will be emerging in Australia.
Nate Spiteri: Having spent four years in London, there's like an array of marketplaces that people don't even know about here. I think even Depop is quite limited and there's only a certain type of person that knows what Depop is. It's not kind of a widespread marketplace like ebay, but I think that's just due to maturity in the market. I think Australia will definitely jump onto that and I feel like if Shopfront can people using Shop Front impacts how many people are using Depop because we can easily sync a listing across from Facebook Marketplace and ebay across to Depop and there's a lot of sales happening on Depop. I think a lot of buyers are on Depop. I think the seller side is the one that's, that's lacking. And so yeah, I think where we can add value even to the marketplaces is by enabling be kind of a new channel for the marketplaces and, and I think that's a direction that we want to head into long term as well. So how can we help be a springboard for like you've been to Vinted, hypothetically wanted to come to Australia and we already have X amount of sellers. Then there's an obvious opportunity there to work together to make sure that people are syncing their listings and get the first batch of sellers onto the new platform. So I've also seen a huge trend in like brands and individual businesses creating their own marketplaces. So I feel like, you know, all these brands and, and retailers have their commitments to sustainability and whatnot. And my ASOS has ASOS marketplace which is huge in the UK and it's only a matter of time before you see these retailers build their own peer to peer marketplaces. And I think if we can jump on that trend as well and integrate with them, there's another opportunity. I think what we want to create is opportunities for marketplaces to acquire sellers and for sellers to discover new routes, new routes of listing their products. Because I think if we, the, the main block of people don't go. As to why people don't go omnichannel is because it just takes too much time and they don't want to risk juggling several marketplaces and I guess that's the problem that we're, we're solving because It's a fact that if you listed in more marketplaces, your chances of selling go much higher, just naturally. Right. So I think that's why we're trying to, like, encourage more circularity and make it more super simple and easy for people to engage and participate and then, yeah, hopefully get them more sales is the end goal.
[Voiceover]: One of the challenges with secondhand marketplaces is customer feedback and the expectations around customer service. It seems to be elevated to what is expected from traditional retail. How do you handle that when you're listing across so many different marketplaces at once?
Nate Spiteri: Yeah, it's a good question. And it's a bit of feedback we get from, you know, potential investors and potential customers coming on board. It's kind of this thing like, how am I going to juggle all the messages? I think long term we would love to kind of bring all the messages in house. That's just a bigger task than it sounds because you've got privacy and all this sort of thing. However, there's a trend with things like AI agents and new software coming out that will enable us to do that. It's just not been a priority for us right now as we've been focusing on the listing integration. But I think if you're getting more messages, it's a good thing because people are interested in your product. So I don't think you'd rather have more messages and more inquiries about your product than no inquiries about your product. Even if it is more work to get that sell, it means you are, like, more likely to get that sell. I think the only caveat there is Facebook Marketplace tends to be a ridiculous one for messaging, and I don't think there's any solution for that, unfortunately. But it's still. It's still a good channel and one people rely on to sell goods, particularly on the smaller end of the seller scale.
[Voiceover]: Are you integrating with Facebook Marketplace currently?
Nate Spiteri: Yeah, we're integrated with them. We can't do the delisting because everything's done in cash. They don't have like a payment. You don't do payment on Facebook Marketplace, so we can't actually track when it's sold. So delisting if it's sold on Facebook, you have to manually take it off the rest, which is just another click of a button. But it's not automated like with the other marketplaces. So it's a little bit unique in that sense. It's more just the distribution on Facebook Marketplace that we'll be doing.
[Voiceover]: Have you found any particular gremlins or surprises in the marketplaces, the more you've dug down into them with your integrations. Are there any that are particularly tricky?
Nate Spiteri: They're all very tricky. I think Ebay and Shopify are probably the only ones that are easy because they've got open API documentation. We've got a few other marketplaces that, you know, we've got access to the development teams because we've built the relationships. But still they don't make it easy for you to integrate, otherwise everybody would be doing it. And I think that's adding a bit to our defensibility because it takes a certain type of team and a certain type of, I guess, confidence to just go in and try and build your own APIs with these closed market like deposits are notoriously difficult. Facebook was relatively okay, but it took a lot of testing and then we integrated with Grailed, which are just testing now, which is a different platform again because they need to approve your product. So it's not as simple as listing straight away. So I think as we start to get more niche and start to open it up to less generic marketplaces, we're going to come across more nuances. But we're, we're building a strategy in the back end that'll hopefully safeguard us from that. So trying to get automation in the way we're onboarding marketplaces as opposed to trying to hack. Not hack, that's the wrong word, but trying to figure out alternative ways to get products listed that aren't so obvious at face value. So it's definitely been a huge exercise. I think we've done really good integrating with five marketplaces in only a few months. But there's a lot more to come. I think we're getting faster and faster at integrating, so we're noticing less hiccups and less kind of monsters in the closet.
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Nate Spiteri: And when you're kind of going through the APIs, and I think to my point earlier, when we're more established and have more sellers will be, it'll be easier to get in touch with the development teams that we need to because they'll be more willing to help us because it's a mutual benefit in working together. It is. Right now we're kind of trying to prove ourselves and build. Build it ourselves. And yeah, that's definitely been an experience. Less so for me, more for my co founder, Drew. I've just been kind of just pressing him on when the marketplaces are ready and he's been the one just to
[Voiceover]: shut up, go sell it.
Nate Spiteri: That's exactly, that's exactly what our relationship is. But no, it's been a really good experience. Like it hasn't been too bad given the complexity of the product, because I
[Voiceover]: can imagine there's the complexity, but there's also the pressure around as close to real time data as possible when you're dealing with marketplaces and secondhand goods in that you want to be able to take that inventory down, especially if it's a bidding. Is there any bidding left or is
Nate Spiteri: it all set price? No, it's all buy it now for the time being. So we're trying to do auction because a lot of the bigger sellers like to do auction. It's a different API, so it's a bit of a nightmare. Thankfully, ebay is one of the main ones that does auctions, so I know they're pretty open with the API documentation, so we can integrate with them a little easier and hopefully then we'll get the blueprint for other marketplaces that do auction. But right now, just buy it now. And to delist we, depending on the level of activity for that seller, we might run a constant poll either every minute or every two minutes just to track when the products, if the product's still live and if we notice it's not live, then we'll take it off the rest. That's kind of our delisting mechanism, which is, yeah, I think pretty standard across the board for our kind of product.
[Voiceover]: How'd you meet Drew?
Nate Spiteri: We actually met in the Antler residency. So for, yeah, for those that don't know Antler, it's a kind of accelerator incubator globally. So they have one in Melbourne. Drew's actually from Brisbane, but he Came down to the Melbourne accelerator and they try to pair kind of commercial and commercial and technical co founders. And so, yeah, I mean, I just went through the list of all the technical people before the program started. I had coffees and calls with people and Drew and I just clicked. He was like a ex CTO of a sustainability startup. And I had this vision of building a secularity startup. And so it kind of clicked right there and then. And yeah, like I said, we tried to build a marketplace at the start that got shut down very quickly because no one wants to invest in a marketplace and it's a very difficult business to build. But aside from that, even just from our validation, we realized that the selling was the problem and it was a better route to go down in hindsight anyway. So, yeah, we just gelled with chalk and cheese is super technical. I'm super commercial. And yeah, we've been just building ever since.
[Voiceover]: That's one of the unique things around Antler, isn't it is like it's an acceleration program where you might come with a fragment of an idea, but you get tested and you get challenged on that idea and you get almost coerced into partnering up with someone that you may never have met before, which I think is really interesting. I've spoken to a couple of people who've been through that program. How did you find that experience of entering a startup program where you don't actually know what the idea is going to be at the end of it?
Nate Spiteri: It's a bit weird. I think the first two weeks is like kind of like a Love island sort of situation, where you just kind of like pairing up with people who have a separate skill to you but are interested in the same space. I think it's easy to find people who have a different skill set, but it's hard to find people who on board with your idea or you kind of have a shared vision for what you want to build. I mean, like, realistically, you're potentially in five, 10 years, maybe 15 years of work with this person. So it's a pretty important relationship to have. I mean, I think I got quite lucky that Drew and I met before the program started. So we kind of caught up on a call beforehand because they kind of released who's in the program before. And we were, you know, 90% confirmed that we were going to work together on day one. Met on the first day. I was like, yeah, this guy's a real person. He's pretty sound. We can have a beer together, so that's fine. And then you kind of just stress test it for a day or two and then we were like, let's just do it. I mean, I don't want to kind of mess about and try and find someone else in case doesn't work out. I think time is of the essence because it's not a program that lasts forever and you're full time in it. So you've given up your day job to go into this program. In my opinion, it was. I just wanted to hit the ground running as fast as possible and build something with someone who could build. And Drew kind of demonstrated that early on. And then we just thought, let's just do it. But Antler are pretty good in kind of guiding you on who you should work with. So you can. Before you kind of seal the deal or confirm you're working together, it's best because Antler is investing with you, in you. After the program, it's best to get their opinion on what they think of you as a co founding team. And so they would very quickly say, no, you guys shouldn't work together, or yes, you guys seem like a good pair that we would invest in. Because when you're VC investing, I think the team, especially at our stage, the team makes up kind of a large chunk of the decision. And if there's either a conflicting team or an incomplete team, so someone who can't build or someone who's not commercial, then the likelihood of you making up all the pieces together while you're on thin Runway for a while is unlikely. And so they were really good in kind of helping match people and would kind of push people in the right direction. But I think we found each other early, which was a, which was a good sign and worked out, which was good.
[Voiceover]: And is it confirmed that Antler are investing in you right from the start, or do you have to go through the process and then make a pitch to confirm the investment?
Nate Spiteri: It's difficult. It's not like Start Mate and kind of the others where, you know, you go through this interview process, then you're like, yes, I've got the money. And then you build. Antler is, you get in, you have to quit your job. You got maybe 10 weeks of, or eight weeks or something of validating the idea and coming up with the idea through like practice pitches and everything like that, finding your co founder. And then you have to go through a pitch to get into due diligence, kind of like a traditional VC process. And then you get five weeks with an Antler coach before you pitch at the ic. For the investment. And it's not guaranteed that you're going to get the investment even if you're in dd and it's not guaranteed you're going to get into due diligence even if you've gone through the program. So, so it goes from like 65 or 70 or however many it was in our cohort down to maybe 20 at the due diligence phase and then even then not all of those 20 secure funding. So yeah, it's not a competition like they, they can invest in all of them if they're all kind of investable ideas. But it's yeah, definitely tests you as a kind of entrepreneur and a working team because you get told no a lot of times and you get like we didn't pass the first due diligence phase. I don't think we, we had to re pitch two weeks later because we had this other idea and we quickly had to pivot into what Shopfront is now two weeks after. And then that was a really good pitch and then got us into due diligence. So it was like a really, really stress testing, fast paced period.
[Voiceover]: What did you learn about pitching during this process?
Nate Spiteri: I learned how to structure a pitch in the Antler residency. I think it was, you know, they definitely give you the, maybe the 30% or 40% of what you need to do to pitch. And yes, it was decent pitch when we did our investment pitch. But I think after Antler, when you're speaking to non Antler investors, is where I really just learned how to properly pitch because I've spent a kind of. After we got the Antler money in May, I think it was early May, we realized quickly that the Antler investment wasn't going to get us enough Runway to launch a super successful business. We needed to quickly just build, build some ground roots piece, get some validation in the form of a wait list and then start fundraising again. And through that period I think is where you kind of start speaking to like hundreds of investors that don't really, they don't have a vested interest in you like Antler do. They're just kind of random people and so they give you more harsh feedback. They, they ask more difficult questions. I think that's kind of, that was the part where I learned how to. I'm not, not a perfect pitcher by any means, but I think that kind of helped me build my pitch a bit more that post Antler experience.
[Voiceover]: I can imagine that pitching a second hand Marketplace service in 2024 wouldn't have been the easiest given the cost of living crisis in that the emergence of TEMU and cheap international marketplaces as well as we did see in 2024, some really great circular economy businesses go under. Is that an objection you came up against much in that customers are no longer as environmental or sustainability focused in their buying intentions when it gets really pressurized for them that they, you know, kind of just default to the cheaper goods and less concern around the environment.
Nate Spiteri: At the start, we definitely got bucketed into. So because I wasn't familiar with the VC environment and what VCs look for, what the trends were and whatnot, we definitely got bucketed into being a marketplace and any commerce business. And then you kind of get VCs that are like, we don't invest in E commerce enough to say we're not, we're a SAS product, we're not an E commerce product. So definitely that kind of feedback definitely helped me frame the pitch a bit more. But in terms of like cost of living crisis and sustainability, I think that worked for us because we're giving people an opportunity to sell more and alleviate the cost of living crisis pressure. On the GMV and consumer side, I think we did get a bit of pushback on the trends in that market, but we're on the seller side and I think people are going to always sell regardless because you can still sell goods that were purchased cheaply from other marketplaces. And I've also framed it as if we were more mature. A lot of these marketplaces that went under sustainability, businesses that went under might have been able to integrate with us. We could have actually helped them. So I quickly went from. I was really focused on sustainability and marketplace after antler, but I quickly realized that we're a SaaS business or subscription model and we're kind of resistant to a lot of the pressures that you would find in, in either a marketplace or E comm brand, which I think we got bucketed into. But then when we came across people who were in the marketplace space or in the ecom space, they were really excited about us and they, they loved us and they, they really saw the pain and saw the vision that we had. And I think that's where we kind of got some interest and started getting the ball rolling with the next fundraise was we just found our kind of champions. I think I really started just approaching everybody who was an investor and who might invest. And you quickly realized that some people were just never going to invest in you, but some people who were the right people who really believed in you early on. Were the ones who were going to invest because they understood the vision, they loved the team, they at least knew the space or took the time to understand the space and where it could go and that's where we found success. But yeah, I mean, E Comm marketplace, circular economy, they're not things that the typical Australian investor invests in. It's kind of like we, we found that like B2B enterprise Sass is. Is where people tend to. Tend to love to invest, but it created resilience. Right. I think what we found is if we can, if we can make it through this period, then we've got more of a leg to stand on next year and we're one of the lucky few that would be able to really accelerate our business and kind of execute on what we wanted. It's unfortunate that it's really difficult to get to this point, but I think we kind of found our niche and found our early believers and kind of were able to build a sustainable plan for the next 12, 18, 24 months.
[Voiceover]: Are you able to name any of those early believers? You know, give them a shout out now and you know, be part of the early story.
Nate Spiteri: Paul Greenberg was definitely one of the, you know, we kind of had a chat and he was just like, I love this idea. I think he was. Think he's been thinking about the idea for a while. So Paul Greenberg is early enough to pay and culture kings and is a bit of an E Comm expert. Founded a couple businesses in the E Common marketplace space. He was a big stamp of approval for us early on and kind of gave us some confidence when we were getting a lot of no's. He's just a good, good sounding board. So he's coming on as an advisor as well, which is very exciting. We actually had really good conversations with a lot of angels in the E Comm space. I can't name them all, there's actually quite a few. But there's a lot of early angels that gave us our first, you know, batches of 10, 20K that kind of got us that confidence to, to get the ball moving. And then Antler as well are committing to the second round who have been massive supporters of us, which is super exciting. And also Coventures, I mean, Coventures is investing and was one of the first new VCs that we got on board and they've been amazing so far in helping us kind of break that barrier and go through to that next phase as well as kind of help us plan what the next 12 months looks like from an Investing point of view.
[Voiceover]: Yeah, brilliant.
Nathan Bush: The next 12 months.
[Voiceover]: So I know you're in the middle of raising funds at the moment. We've mentioned everything from your API integrations through to what you want to develop with AI in terms of product listings through to expansions into different types of retail, from fashion, into auto, into furniture. How do you prioritize where you go?
Nate Spiteri: We actually identified that there's between 2,000 and 3,000 of these vintage type sellers in Australia that are part of this initial niche ICP that we want. And we've figured out that we can get some really meaningful ARR just by focusing on this niche first. And they're not, you know, tech, they're not super tech savvy like a B2B SAS sale would be and that they'll be pretty willing to work with us and help us build the product. So we're going to spend, you know, the next six to 12 months really just nailing this ICP first before we start thinking about how we can verticalize out. So it'd be a phased approach. I can't imagine we'd be going out to too many verticals at once. Luckily for us, the shop front product doesn't change. So the product is the same whether you go vertical. So different verticals or whether you go different types of volume sellers, they still use the same shop front app. It's just maybe a sort of different set of features for an enterprise seller as opposed to an individual seller. But the base and the back end is more or less the same, which is exciting because doesn't mean we need to build too many products or anything like that. We can just kind of scale the existing product, which is what will be stress testing really. And we've got a couple sellers already on the pilot next month that do close to a million dollars in ebay sales a year. We're just kind of seeing like how they use the product. One thing that they highlight as well is a lot of these big time sellers actually offshore, they're listing processes to the Philippines or somewhere else in Southeast Asia and they pay like $2 a listing and these are like thousands of listings a month. So there's a huge opportunity there to like let them do it themselves in a faster way. But yeah, just highlights how long it actually takes to list. So it's about 15 or 20 minutes per listing. If you're doing that hundreds of thousands of times a month, you can imagine how much time that takes. And like as a seller you're not just listing like we talked about, messaging Fulfillment, packaging, shipping, like listing should be the fastest piece. Should be just, you know, that shouldn't take anywhere near as long as it should. But like for an E comm brand, like you have volume, right? You don't, you have, you have quantity of items you don't have. You could have 100 items of the same thing with the same details. I think translate that to a second hand or a unique good seller, they've got to recreate that listing 100 times in the normal process. So I think that's how we're kind of looking at things.
[Voiceover]: Makes sense. I was amazed in your pitch deck that the average person has $7,000 of unused clothing in their wardrobe. Where does that stack come from? Because that's crazy.
Nate Spiteri: Yeah, it wasn't clothing, it was just in value from like goods. So things that they don't use. I think household goods, you know, electrical appliances. And majority would likely be fashion. But can't recall if that was Statista or another fashion report. But it blew me away too. Right. Because it means like you coincide that with the amount of landfill that gets sent by Australians and obviously people should be selling. Right. You've got cost of living prices. There's people who would buy the stuff and I think that's what we want to get to. But I mean, we're not sitting here saying that every item is fit for marketplaces as well. I think that'd be silly to assume that everything in people's wardrobes or closets would be sold on secondhand marketplaces. So I think there's also an opportunity to use Shopfront as a way to discover ways to sustainably get rid of things as well. Even if it's free or even if you might have to pay a small fee, but at least it's kind of removing clutter and you're getting rid of it. Like recycle. I don't know if you've heard of them. Rcyclav, we know Belinda quite well. I'd love to kind of, you know, work with her one day and try and get people more encouraged to use her as an outlet to kind of get rid of that. Some of their clutter. So.
[Voiceover]: Because she's just done a partnership with the iconic, hasn't she?
Nate Spiteri: Yeah, she's amazing. Yeah, she's been a soundboard for a while. So yeah, ever since she kind of got some support from ebay, I think it was, and. And kind of took off last year or early this year. Yeah, we've been in touch quite closely and I think, yeah, it's amazing to see what she's doing from a unique perspective on how to kind of declutter and participate in sustainability. And I'd love to kind of take some of those learnings and not just think about the commercial value of Shopfront, but how we can kind of do our thing for the environment as well and just give people a opportunity to get rid of their products that they're not selling or not using. Because ultimately if you don't do anything with it, it's just going to end up in landfill because some, you know, it'll be left somewhere and someone will just throw it away. I think that's what happens to. Happens to most goods. Australia is notoriously bad for throwing away textiles in particular. So that was kind of part of the reason we wanted to build a circular economy business because we know the problem is huge. And I feel like Australia is a bit behind in the sort of ways that people engage or behave in that space. So, yeah, we're hoping to kind of change that.
[Voiceover]: And do you see a big opportunity for retailers to be able to list, say, returned items or end of life items that just aren't sold? And obviously there's a lot that are doing some great work with organizations like Thread together being able to donate excess inventory that will never move. But do you see the opportunity then to list it on marketplaces through kind of factory outlets? I suppose. Do you see that opening up more and more?
Nate Spiteri: That's kind of where we want to get to long term. And I think if anyone's listening to this podcast and you're a brand and thinking about it, we'd love to chat because it's very hard to find. I don't think anything like that is an obvious solution on how you can sustainably get rid of goods that are maybe impaired, returned or just unsellable on primary markets. And I think a lot of brands do struggle with what to do with those goods and that ultimately does lead to landfill. And so we feel like there's a missing link in the supply chain or in the way that businesses operate. There's obviously a branding issue that you don't want to have the brand's name on a depop, for example, because that could impair the brand. So is there a way where it can be a proxy brand or something like that where you listed on. On a depop and ebay? And we kind of want to be the SAS tool the brands can use for that? I think going back to our earlier point, it's not as simple as just uploading The E. Com photo, you need to take new photography, you need to, you need to describe the photo again, tag the photo again and this all takes time. And I don't think, you know, from a commercial point of view, it doesn't make sense for a brand to pay someone to spend 20 minutes per listing to list it on, on a marketplace. So I think we're really, as a strategy for next year thinking about how we can build this kind of, this process for a brand and how we can kind of take care of that for them. Because I don't feel like warehouse sales are doing the job that they should like. It's. I can only imagine the costs involved with doing a warehouse sale in terms of rent, logistics, hiring people, paying them on a weekend or whatever. It might be all for the op. You know, people might not even show up and actually buy the goods. And I feel like, you know, people tend to buy online more than in person nowadays anyway. So I feel like there is a shift in kind of moving away from that warehouse sale piece and into kind of how can we get it on the right marketplace and get it in front of the right people. And then like I said, there's the brands doing their own peer to peer marketplaces as well. So, you know, there's even probably a struggle point on how they actually get it from their main brand onto the peer to peer marketplace. Like, can they participate in their own peer to peer marketplace as well? Like, there's quite a few opportunities there. But yeah, we're in the early, early stages of developing what this strategy looks like. It's kind of the, it's kind of two or three stages ahead of where we're at now in terms of scale and the sort of customer. But you know, Shopfront could technically be used as it is for that, for that scenario. Like we still have the integrations, we still have to wait, upload the products. It's just, you know, what are the missing features and bits that would be needed for, for that particular customer segment? I think that really excites me because that's something a bit novel and that would set us apart from a lot of our competition if we can really crack that piece. And it just feels like a natural step for us to move in that direction.
[Voiceover]: It feels like a really good opportunity for brands that natural sellers of secondhand goods such as your Vinnies and people like that. But also brands who just have really strong communities where you could have a warehouse sale that's on 247 always dropping in new little bits and pieces. That are available, where you've got passionate customers that are going to buy your brand and your new drops no matter what. But also love the access to kind of everything else.
Nate Spiteri: There's actually a lot of brands in the UK that are kind of up and coming, like luxury brands that do a lot of sampling for example and they pay people a full time wage to get the samples on Depop for example and they have their own like Depop sample page where they list the products that were, maybe they were, they were experimenting with before they got to the actual product. So if you think of that at scale, how many goods go to waste that are still very wearable and actually probably more exciting than the, than the actual brand product because they're like one offs. Like what, what happens to those products? They're not listed on the E Comm site. They're either given to people or they're, I don't know, thrown away or just, or somewhere. So I think there's a real opportunity to do something like that. It doesn't have to impair the brand all the time. You can make it like a new, it can be a new revenue stream. I don't think because you're on secondhand, you're on a second hand marketplace, it means that you're taking away customers from your, your main brand. I think if anything it would encourage them to go back to your main brand and do offers and things like that and give them discounts for the next full price purchase. Like there are tons of opportunities. Right. And I think what we want to do is just find the, the flow in order to make that seamless. It's a lot more operational effort for a brand than there is for like a reaction for a small seller or a charity shop.
[Voiceover]: Yeah. Reminds me a lot of what Shania from Renta was talking about when we interviewed her last year. She's amazing. And you know, one of her lessons was we need to not just provide a point in time solution but about how do we enable this process flow all the way through for brands? Because the blocker isn't one piece of tech or one resource or one thing over here. It's actually just getting the whole thing rolling at once.
Nate Spiteri: Yeah, I think it's also. Well in our case it's who, who's actually using it. So like who, who would be the person listing the product? Is it like a sales assistant in the shop? Is it someone in head office who then has to worry about where to store all the stock that they're listing? Like there are a Lot more things to think about. So although it's SaaS, there's still like a product that's in the process flow that you need to kind of, you know, think about logistically and kind of operationally what happens to that and how long do you leave it on the second end website for before you kind of then find an alternative solution like recycle or something like that. There's a lot of considerations. So it's a big job, but where we're kind of determined to figure out how we can make it work because we've put so much thought into, got so much passion to actually fix the problem. And I think brands is a huge opportunity.
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[Voiceover]: What are you able to share around the current commercial model? I get that you know it will change and evolve over time as you expand the services that you have with Shopfront, but what's the current commercial model for sellers?
Nate Spiteri: Yes, we run a subscription model. It was a big question when we were launching, like do we take a clip of the sale or do we, do we do a subscription model or do we mix? Do a mix of both. We found that a subscription model psychologically just makes more sense. So if you're a seller, you don't want to be like I'm already paying 10% to eBay or 15% to eBay, whatever it is, like how do I justify another 10% to shop front? So subscription model just made sense for us at least while we're learning the value that we are adding. I think if there was a huge value add and people were loving us, then we might move to a a fee, percentage fee model. We're also seeing a trend as well emerging where the buyer pays the fee, not the seller. So you can see Depop and ebay are doing this in the UK and the US I believe so matter of time before that moves to Australia. And in that case would be more better off doing. The seller pays the fee because we're just replacing the old marketplace fee, but one fee for all marketplaces rather than figuring out what the fee is for each marketplace. I think that'll be a very exciting pivotal time for us because we can change our model to accommodate for the extra bottom line that people who are selling actually have and can contribute to making their selling life easier. But right now, subscription model just makes sense. So we do free for up to five, five items a month. That's five items on as many marketplaces as you're connected to. $10 a month for five to 50 items and then up to 200 is $40 a month. But you get like team access and a few other features and then anything above 200 items a month. We do like a bespoke or kind of just work out whatever makes sense for you, whether it's a mix of, mix of GMV and subscription or these are more mature sellers at this rate. So I think it's easier to talk to them about the kind of clipping of the sale or whatever it might be. But yeah, we're just testing to be honest. We're launching a pilot next month in January where it's $10 a month for three months for about 10 to 20 sellers that we're getting on board and we're just going to see where they use it and where the usage is and then we'll go to market fully in Q2 next year with that, with that data driven pricing model. That's the plan.
[Voiceover]: Okay. And so if people are listening to this, who's your ideal use case? You kind of alluded to it a couple of times, but some say for the first half of 2025, who do you really think that you can help the most in terms of sellers?
Nate Spiteri: Yeah. So I mean if you participate in depop and ebay, if you're at markets on Sundays, or if you're just a little hobbyist who is selling one off goods, I think we'd love to kind of see how we can help the business. The first half of next year is really going to be about onboarding sellers who are willing to help us build the best product possible. And so we're looking for those early believers that we can kind of bring on board and help us build and then we'll, you know, reward them in, in as well with you know, discounts and whatever it might be. We're just really in a phase where we want to build the Best products that we can for customers, something that they love. We know we're not expert sellers, we're not experts in E comm, so we're really just trying to make, do our best to make people's lives easier when they're participating in these environments. On top of that, brands and larger charity shops and kind of any bigger brands or bigger businesses that engage in the retail, sorry, in the second hand and alternative market space. We'd love to talk about experimenting with you as well and hopefully launch that side of the business later next year. There's a lot to do, a lot of different, a lot of different opportunities, a lot of testing, but it'll be exciting, especially once we wrap this funding round up. Be awesome.
[Voiceover]: Oh, I just loved hearing obviously your vision there for Shopfront and how you can enable that secondhand market, but also your connection in with other people that are doing similar things. So whether that be Belinda or Shania, to show that there is a real thriving secondhand and reuse market that's emerging in Australia. That's really exciting. I think that's fantastic.
Nate Spiteri: When we meet each other, we have, we have good chats, that's, that's for sure. It's, it's, it's nice to see. I think everyone's learning from each other too. So, like, you know, we're all at a different pace and at a different stage. But yeah, this is probably a world where you can learn from each other and work together eventually. And yeah, the ecosystem is definitely building. I think your interest from investors is definitely on the up. I think it's just a matter of learning. Learning where it can go. That's the question mark right now for people who haven't seen much of it before.
[Voiceover]: Brilliant. Well, Nate, if people want to learn more or get in touch, what's the
Nathan Bush: best way for them to do that?
Nate Spiteri: Super active on LinkedIn, so feel free to reach out. Nate, Spattery or you can catch me at email at. Nate, the Shopfront app as well, or our website which is www.shopfront app.
[Voiceover]: Nate, love your work. Thank you for sharing the story so far. I think we've got in at the perfect time where, you know, we're just at that early stage of investment. There's so many different branches of ideas of where you can go. So I'm really, really looking forward to seeing your journey from here.
Nathan Bush: So thanks for joining us today.
Nate Spiteri: No worries, mate. It's good to be on board.
Nathan Bush: Like I said, we don't often feature people who are so early on their journey. Journey But Nate really caught my eye. I was looking through some antler packs and they really featured Shopfront and called out some of the stats. And the interesting thing, I think there's some big announcements coming in the coming months with Shop Front, which will really be interesting to keep an eye on. So if you liked what you heard there, make sure you keep an eye on Shop Front because they've got some big things coming. All right, three lessons that I took away from that chat around helping enable secondhand sellers online. Number one, simplifying for sellers solves pain points. The secondhand market can be chaotic. Sellers spend hours listing across platforms, manually delisting sold items and guessing at pricing. It's a hell of a lot of effort, especially when you are doing one offs. Nate's idea for Shopfront started with his own frustrations as a seller. By tackling those pain points head on, using AI to automate listings and match items to multiple marketplaces, he's creating real tangible value for sellers. And he started small, which is what I like. He's testing the concept before expanding to larger retailers again. As we have seen with many other startups like Shopfront, the sooner you can get on and try it as a larger or medium, medium sized retailer, the more benefit you'll get out of it. We've had a lot like that. Think Hamish from order editing and those early retailers who got on board. If you're in the secondhand market, it might be a chance to pick that up and run with it early and get a bit of competitive advantage. Number two, start with a niche focus. Nate made the decision to target a specific niche of sellers, vintage and independent sellers who frequent markets or use platforms like depop or ebay, this decision was key to Shopfront just getting off the ground. With about 3,000 independent vintage sellers in Australia, this laser focus has helped them fine tune their product in a community that understands what they're doing and is core to what they're building. Building loyalty here before expanding into larger markets like charities or enterprise. Retailers will really set shots front up for success. Nate knew that mastering this niche could unlock opportunities with larger retailers down the line. Keep an eye on some of those big announcements that are coming. So if you are struggling to break through, maybe you're going too big. Bring it back. Work out who that core community is. Niche down before going out. And number three, know your purpose, know your vision, but remain flexible to feedback. Building a stage startup or retailer is never smooth sailing and Nate's journey with Shopfront proves it. From rethinking their entire business model after the Antler residency, which I thought that was fascinating to hear that process to navigating through investor conversations. Resilience and adaptability has been the core to them getting to where they are today. Pivoting from a Marketplace model to SaaS was no small feat, but it paid off with backers like Paul Greenberg and Antler already on board. Now they have a great network as well as financials to reach that next step. Nate's takeaway was stick to your vision, but stay open to feedback and adapt when needed. Whether you're growing a startup or managing a team, I think this is really great advice to keep you moving forward. Before you go, we'd love to invite you to join our free e commerce learning platform Add to CART Campus, meet other professionals and learn from e commerce experts to take your business and your e commerce career to the next level. Register to join campus@addtocart.com
[Voiceover]: now.
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