OnBuy boss Cas Paton discusses annus horribilis and big e-commerce calls during tough times
Cas Paton, Founder and CEO at UK-based online marketplace OnBuy, has taken to social media to discuss tough times and a startup’s path to profitability.
In a LinkedIn post, he said: “2022 was horrible for OnBuy and most e-commerce companies.”
“Coming from Covid trading peaks and then watching that all fall away - and trying to hold strong and still paint a picture of health and excitement, it was very difficult to maintain the buzz with shareholders and investors, despite knowing that Covid peaks were always going to be temporary for ecomm.”
He added: “Followed by headwinds in the market, consumer confidence etc. the picture was getting bleaker month on month.”
“We were building the next exciting things for OnBuy, but coming under scrutiny from investors and the market; when were we going to get back to new records? Can a marketplace survive this hard environment?”
“Startup businesses were coming under fire, VCs were coming under fire and Y Combinator shared that infamous "act now or die" letter - and we were still investing heavily in the next levers for OnBuy.”
“This was optically risky, as we were not following the 'best advice' of 1. urgent downsizing 2. cut all costs and ride the storm. We backed our ideas and our burn stayed high for longer than many might have liked, as we sought to deliver optimisations and growth levers for the business. Confident that we were doing the right thing.”
May was OnBuy’s highest revenue month ever and also the firm’s highest gross profit month ever.
“We're getting bigger, getting stronger, and have brought to life a fantastic business on the path to profitability. Our burn has reduced substantially as a consequence and our business has the healthiest outlook it's ever had - so we made the right decision,” Paton said.
He concluded: “As well as our highest revenue month, May 23 was also our highest retention month, as well as our highest contribution month ever.”
“And this is only the start of things to come, as we leverage our growing position to ramp up sales and expand our market share considerably over the next few months. Amazing work team OnBuy, well done! Let's keep up this focus on being the best and keep defying the odds along the way.”
Buy now pay later
OnBuy recently announced a partnership with buy now, pay later (BNPL) provider, Clearpay.
This option can be used across the majority of the venture’s products.
A recent consumer survey conducted by the firm revealed that one in five people choose to shop with a retailer because they offer their preferred payment method. It says that the partnership with Clearpay comes in response to this growing demand for convenience when online.
With Clearpay, shoppers have the choice to split their purchase payment into four interest free instalments, paid over six weeks. OnBuy will also feature on Clearpay’s Shop Directory, which globally drives one million new customers to merchants every day.
Paton said: “We’re more committed than ever to transforming the OnBuy shopping and selling experience, and that’s why we’ve chosen to offer even more payment methods at the checkout. Our customers have asked for the flexibility to make purchases in a way that suits them, and we’re excited to be able to respond by launching Clearpay across our site.”
“Partnering with Clearpay also benefits our sellers, as more choice for our customers ultimately results in more sales overall.”
Rich Bayer, UK and EU Country Manager at Clearpay, commented: “We’re delighted to partner with OnBuy, who will now have access to our engaged and growing customer base, and can enjoy increased conversion rates and incremental sales, and lower return rates.”
“With 14% of online purchases being made using BNPL in March this year, this innovative payment method is highly valued to consumers who want to manage their spending responsibly.”
“With our inbuilt protections, OnBuy customers can pay for products safe in the knowledge that they cannot build up revolving debt that comes with high interest credit cards.”
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