Californian tech start-up Tophatter, a platform for live 1.5 minute auctions, has managed to ramp up monthly gross sales from $200,000 to $3 million in just over a year, the company said on Thursday.
The two-year-old business could hit annual sales of $40 million this year, and has signed up more than 1 million members, partly by expanding its flash auctions to mobile platforms, which it did in April.
The concept is simple: Members sell and ship items in a live room peopled by cartoon-like characters after users get notifications sent to their iPhones or other devices.
Although in the past, the users -- often women over 35 -- mostly bid on jewelry, home décor and fashion items, the company's user demographic has expanded, Tophatter's chief operating officer, Andrew Blachman, told International Business Times.
“Now, with mobile, our demographic is more 25-plus, and geographically, it’s dispersed across the U.S.,” Blachman said in a phone interview.
The business launched electronics, beauty and artisanal groceries rooms on Thursday, and it has announced plans to expand to Canada, with specialist currency support there.
Tophatter bills itself as the world’s “most entertaining live marketplace”, and has sought to tap into Internet users' short attention spans and need for instant gratification.
So far, it seems to have worked. September sales reached $3 million, the company's best month on record, but Tophatter could beat that in October if daily sales stay on track, Blachman said.
Tophatter plans to expand to the U.K. and Australia in coming months, with a U.K, launch scheduled for before the end of 2013.
Its push into mobile has made all the difference, according to Blachman, who cited data showing that mobile auctions were over two thirds of sales for the company's most recent month, solidly beating desktop’s share.
Mobile sales have even pushed 70 percent of total monthly transactions, he said.
iPhones are the device of choice among mobile shoppers, as mobile ad revenues at companies like Facebook, Inc. (NASDAQ:FB) have soared this year. Retailers worldwide increasingly look to mobile and Internet sales to boost traditional brick-and-mortar profits.
Even though Tophatter takes a 17 to 20 percent transaction fee, it hasn’t yet turned a profit, and has instead reinvested in the company for growth.
But Tophatter’s advantage comes from how uniquely addicting and game-like its mobile experience is, Blachman told IBTimes.
“They’re similarly capitalizing on mobile and on the social experience,” said Blachman of his competitors. “But they’re mainly pure market places.” “They’re not so much about entertainment and purchasing. We’re sort of a company about that, if that makes sense … The experience feels more like playing a game than it does shopping for something.”
Tophatter received $14 million in two rounds of funding, from venture capital backers like August Capital, Charles River Ventures and Sequoia Capital.
The business started out as Blippy, a well-publicized startup that sought to broadcast its members’ credit card purchases on social media, according to AllThingsD.
Nat Rudarakanchana covers commodities and companies for the International Business Times. He is especially interested in precious metals, the food and drink industry, and...