Sustainable Investing | since 1999 | momox
The Circle of Life — How momox Became the Largest Re-Commerce Platform in Europe
A startup story written by an unconventional entrepreneur and driven by the conscious consumer
All products deserve a second life — that’s the principle of the circular economy. Berlin-based re-commerce pioneer momox has turned trading pre-loved media items into a successful business. By offering fast and easy handling to sell and purchase pre-owned goods, momox and its online-shops ubup and medimops tap a billion-dollar market driven by the conscious consumer. With €250M in revenue, 1,900 employees and 220 million articles bought and sold since launch, the company is meanwhile the largest vendor for used goods on Amazon worldwide.
People have always had a love-hate relationship with books, movies and games. They buy them, enjoy them — often never to use them again. They take up space, sit on shelves or cupboards, in basements or attics, and eventually turn into dust catchers, forgotten and neglected. Assuming there are unused items worth at least €1,000 in every household — that makes a multi-billion-dollar market potential.
“A straightforward” approach vs. ebay & Craigslist
Putting used items on eBay Classifieds or Craigslist is a tedious and time-consuming process with minimum transaction certainty, often considered “not worth it” by most of us. The momox concept provides maximum convenience with maximum transaction certainty: through a smartphone app, the re-commerce platform allows potential customers to sell their items at fixed prices — within minutes. “For momox users, the sale process is straightforward,” explains Christoph Braun, Managing Partner at Munich-based VC Acton Capital. “Using their smartphone, they scan the barcode of the book, CD, DVD, or game they wish to sell and receive an immediate, conditional purchase offer. Without having to worry about delivery charges, they can send their items to momox. Once vetted, the seller receives the corresponding payment.” Considering the easy and simple user experience of the platform, it’s hardly surprising that many private sellers immediately switched from eBay and other sites to momox, after its launch in 2006.
From unemployed to entrepreneur — momox’ lightbulb moment
Yet, the success story of momox begins three years earlier: in 2003 founder Christian Wegner — today considered a pioneering self-made entrepreneur and business angel — had just lost his job and moved to Berlin to live with his girlfriend. “It’s such a big city and I thought, there must be some sort of job for me. But I couldn’t find one,” he remembers, “so I needed to pull something together, become self-reliant. I tried things, but they didn’t work.”
More by accident than by design, Christian bought some used books that he resold on eBay. “I had paid about two euros a book, but sold them for 20,” he recalls. “I realized that you could make fast money by selling books online.” Unemployed and with €1,500 left in his pocket, he decided to go for it, attempting to make a living out of trading second-hand books, DVDs, CDs and games online. He operated his business from the small apartment he shared with his girlfriend, using every square meter, including bathroom and bedroom as storage — until, in 2004, he could afford extra space.
“I tried things, but they didn’t work”
But space was not the only problem Christian Wegner faced. Many others had realized the money potential of trading media items on the internet, making it increasingly difficult to find enough second-hand products to sell. Thinking of ways to beat the competition, Christian had the idea of momox, a platform that customers could access directly to sell their used media items by typing in the barcode or the ISBN of the respective media item.
In May 2006, momox.de went online. Initially, Christian used Amazon’s database to research and calculate momox’s prices (today the company uses its own complex algorithm) and sold the inspected goods at attractive prices through “medimops”, his own Amazon shop. “The momox idea was as simple as it was visionary, the first of its kind in Germany and Europe,” says Christoph Braun. Four years after launch, the start-up had become the leading online buy-back platform for books, CDs, DVDs, computer and console games in Germany. It had grown to more than 70 employees, operated out of its new 8,000m² logistics center, turned over more than €25 million annually — and had found an investor with “the experience and network” to scale even faster, as Christian Wegner put it: Acton Capital from Munich.
“A fun year” — German pioneer becomes category leader in Europe
”momox was not only a pioneer in re-commerce, but was able to shape and establish a whole new and very profitable market,” Christoph Braun remembers. “Christian had a very hands-on, low-key attitude and had already established an impressive online business in Germany. We were excited to support momox in becoming a European success story.” Although easier said than done, momox continued to grow rapidly, moving into a new 16,000m² facility that filled up just as quickly thanks to a report on momox that had aired on German national TV.
Only months later, momox opened with 80,000m² Europe’s largest logistics centre on the former Quelle facilities in Leipzig, Saxony.
“2010 was a fun year,” momox founder Christian Wegner recalls, “with Acton as a new investor and the new logistics center in Berlin, we started creating teams such as human resource management, finance, marketing and so on.” With the strategic support from Munich, momox began expanding to other countries.
Today, with nearly 2,000 employees at six locations all over Europe, the company is one of Germany’s top-selling digital companies. Despite the complexity of buying, handling, and selling 150,000 items per day momox has been profitable for more than a decade.
“The momox idea was as simple as it was visionary and the first of its kind in Europe.”
momox is one of the biggest vendors for used goods on eBay in Germany and the biggest vendor on Amazon Marketplace worldwide. With ‘medimops’, the company has established its own shop and brand in Germany to become more independent from the two global giants. When momox saw a €50 million leap in revenue from €150 million in 2016 to €200 million in 2018, international business was one of its main growth engines. The other was second-hand fashion.
Scaling from one-man show to a multinational organization and finding a new CEO
While the former one-man show scaled to a multinational organization, momox founder Christian Wegner was looking for somebody capable of taking over the helm. In Heiner Kroke, he found the perfect fit. The former eBay executive and CEO of several online marketplaces in Europe had the necessary track record and embodied the company’s DNA: driving sustainable growth and innovation, together with austerity.
In 2013, Christian stepped down as CEO to devote his undivided attention to a new idea that would help to continue momox’s exceptional growth. As new Chief Visionary Officer, Christian Wegner began building another start-up within the start-up, a company entirely dedicated to the re-commerce of fashion. By reselling second-hand clothing, momox helps to extend the life-cycle of fast fashion and breaks the doom loop that the fashion industry has created: a culture of short-lived fashion trends that people want to wear, but not keep. Though online shopping has never been easier, closet space and money are both limited, making reselling clothing an attractive solution to thousands of users. It’s a win-win, not only for business, but also for sustainability.
Although momox still derives 80% of its revenue from used media, second-hand fashion sold through “ubup”, momox’s own fashion shop, has become the fastest growing segment: within the past five years, the company has found new buyers for more than 5 million pieces of clothing and accessories. The online resale market for fashion is expected to grow significantly in the near future — just like re-commerce in general, placing momox in a position for market leadership.
The re-commerce movement driven by three long-term trends
“The re-commerce movement is driven by three long-term trends,” Acton Partner Christoph Braun explains.
- On to the next one: “Some of today’s consumers always want the best and latest products. New product editions and features lure them into making new purchases on a frequent basis while leaving them with well-functioning but outdated products all too soon”, explains Christoph.
- Responsible shoppers: The opposite is true for the second group of consumers: socially conscious and environmentally friendly shoppers who buy used, vintage, and second-hand goods to reduce their environmental footprint.
- Cash-strapped consumers: The third group are the economically savvy consumers who simply want or need to save money. “They also tend to change their shopping behavior by factoring an item’s resale value into the cost of ownership,” says Christoph Braun via Medium “Re-commerce: The New Old”
Add to that the current life-detox craze with its evangelist Marie Kondo asking, “does it spark you joy?” and promising a clear mind through “magic cleaning” (decluttering), and reselling has become a lifestyle in itself. No wonder that “over the next decade, the resale market is expected to outpace all e-commerce and retail sectors,” Christoph claims. Further, “the reselling of physical products is just the beginning, there is still a myriad of product categories that are not up for resale yet.” Christoph’s predictions concur with those of leading futurologists and trend experts. As for momox? They might need even bigger logistics centers soon.