Redbubble: A Three-Sided Marketplace
Former Chairman at Redbubble and Director at Stockford
inpractise.com/articles/redbubble-a-three-sided-marketplace
Redbubble
Why is this company interesting?
Redbubble is an Australian-listed three-sided marketplace connecting individual artists, fulfilment partners, and customers. Artists upload unique designs and Redbubble partners with fulfillers to produce 'print-on-demand' (POD) products and ship to consumers.
Redbubble's competitive advantage lies in the 60m long tail of unique designs that drive organic traffic via SEO to customers looking for customised products. The flywheel starts with artists uploading designs, this unique content driving organic traffic which drives sales through the fulfilment network. As the fulfilment network scales, delivery time and cost declines which drives sales and the flywheel again.
Redbubble reminds us of Etsy in 2016; a marketplace with a unique and sticky supply side and a new CEO to focus the company on driving sales for sellers. RBL's 5-year revenue CAGR is +35% with gross margins over 40% and an estimated ~15% long term EBIT margins.
Redbubble: A Three-Sided Marketplace(August 5, 2021)
Richard Cawsey
Former Chairman at Redbubble and Director at Stockford
Richard has over 30 years of executive experience across financial services and technology startups. He is a Former Director at Stockford, an Australian accountancy roll up and is the Former Chairman at Redbubble, the Australian consumer marketplace, where he was an early angel investor and Chair for 10 years. Richard started his career at Morgan Stanley before joining St Georges Bank where he became Stockford Director. Richard now runs Denali Venture Partners and is an investor and advisor to many early stage technology companies globally.
In Practise Notes
- There are advantages to scale across the supply chain for RBL: negotiating with blank manufacturers Better pricing from fulfillers More fulfillers = denser network = shorter delivery times and lower cost
- There are no contractual agreements between RBL and fulfillers. Competitors can use the same fulfillers.
- Although competing POD companies can use RBL fulfilment network, it seems there is an advantage of being deeply integrated with the fulfillers to improve productivity and product quality.
- The core competitive advantage for RBL is the long tail of designs that drives organic traffic
- Historically, RBL has spent nothing on brand marketing. Increasing brand recall and repeat purchasing rate is a huge opportunity. RBL is 2-3 years behind Etsy in this sense.
- The biggest competitive risk to RBL
- How to look at the true "TAM"
Interview Transcript
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