Marketplace Meets Demand With Efficient Payments

At the end of every week, the COO of the online marketplace Good Buy Gear would spend the last couple of days of the week checking the balances of all the sellers in the database and issuing a physical check to anyone with a balance.

When the company started in 2016, this was feasible. But as the company scaled and the transactions increased, issuing checks to sellers took more than eight hours to complete each day.

It was a good problem to have—but still a problem.

Four years later, Good Buy Gear has emerged as a national online marketplace that enables the recommerce of quality baby, toddler and kid’s gear. This is anything from strollers and toys to car seats and nursery items. Parents enjoy a full service selling experience with items collected and checked for quality, pricing is determined based on an advanced algorithm and listed for sale on the website.

Once the item sells, an account is credited the funds acquired from the sale. Prior to the end of 2019, that used to mean issuing physical checks which sellers would receive roughly a week later.

“We’d sometimes have issues with people contacting us saying they never got their check,” says Jessica Crothers, the Co-Founder and COO of Good Buy Gear. “But I’d go in the system (Google Sheets) and see that a check was issued. So we’d apologize and reissue a check–which could take another 7-10 days for them to receive.”

After much anxiety and frustration around their sellers’ payout experience, they came across Dwolla’s payment platform. One engineer and two product team members integrated Dwolla’s payment API in less than 8 weeks.

Today, sellers are able to easily create a user account, attach their bank account and request their payout.

“We have a fairly different concept for people in the consignment space and it’s a great selling point to have Dwolla’s sophisticated payments system, not just a check in the mail,” Crothers says. “That sophistication builds trust within our community and the experience really validates us as a player in this space.”

Switching Gears

Crothers says it was her co-founder and Good Buy Gear CEO Kristin Langenfeld who sparked the need for change while she was still doing payouts late one Friday afternoon.

“We dealt with that pain for a long time,” Lagenfeld says. “And then when we were switching banks, we didn’t want to migrate hundreds of addresses and manually type that in to recreate everyone. With Dwolla, we no longer needed those addresses to do a pay out.”

Both Crothers and Langenfeld said any new solution would need to easily fit within their existing workflows and processes; there was no budget for creating a new user experience.

“We are very cash conscious and back then, we didn’t pay for really any software, I mean we weren’t paying ourselves so every dollar was critical,” Langenfeld says. “We have a third-party developer that we use but after looking at the documentation, I didn’t think it would be that hard and that we could do it in house. That’s a testament to the Dwolla documentation and sandbox.”

1. Transfer Initiated via the Dwolla API to fund Dwolla Master Balance

POST https://api-sandbox.dwolla.com/transfers
Accept: application/vnd.dwolla.v1.hal+json
Content-Type: application/vnd.dwolla.v1.hal+json
Authorization: Bearer {{token}}
Idempotency-Key: {{idempotencyKey}}
{
  "_links": {
      "source": {
          "href": "https://api-sandbox.dwolla.com/funding-sources/{{GoodBuyGearBankFundingSourceId}}"
      },
      "destination": {
          "href": "https://api-sandbox.dwolla.com/funding-sources/{{SellerFundingSourceId}}"
      }
  },
  "amount": {
      "currency": "USD",
      "value": "2000.00"
  },
}
...
HTTP/1.1 201 Created
Location: https://api-sandbox.dwolla.com/transfers/{{transferId}}

2. Transfer Initiated to Send Funds Received by the End User

POST https://api-sandbox.dwolla.com/mass-payments
Accept: application/vnd.dwolla.v1.hal+json
Content-Type: application/vnd.dwolla.v1.hal+json
Authorization: Bearer {{token}}
Idempotency-Key: {{idempotencyKey}}
{
   "_links": {
       "source": {
           "href": "https://api-sandbox.dwolla.com/funding-sources/{{GoodBuyGearBalanceFundingSourceId}}"
       }
   },
   "items": [
     {
       "_links": {
           "destination": {
               "href": "https://api-sandbox.dwolla.com/funding-sources/{{CustomerABankFundingSourceId}}"
           }
       },
       "amount": {
           "currency": "USD",
           "value": "100.00"
       }
     },
     {
       "_links": {
           "destination": {
               "href": "https://api-sandbox.dwolla.com/funding-sources/{{CustomerBBankFundingSourceId}}"
           }
       },
       "amount": {
           "currency": "USD",
           "value": "200.00"
       }
     },
     {
       "_links": {
           "destination": {
               "href": "https://api-sandbox.dwolla.com/funding-sources/{{CustomercBankFundingSourceId}}"
           }
       },
       "amount": {
           "currency": "USD",
           "value": "300.00"
       }
     }
   ]
}
…
HTTP/1.1 201 Created
Location: https://api-sandbox.dwolla.com/mass-payments/{{masspayId}}

Langenfeld said the team plans on further iterating on their Dwolla integration to give customers the additional options to verify a bank account.

“Some of our big partners in consignment, they request a payment every week and it’s great we don’t have to manually pay them,” Langenfeld says. “And for us, Dwolla is a direct integration into our back end system for accounting too. So as soon as a payout is requested, our accounting is automated too.”

In With The New

Since integrating with Dwolla at the end of 2019, Good Buy Gear is now incentivizing its sellers with store credit.

“That gives our sellers a 10 percent bump in their payout,” Crothers says. “That was something we couldn’t set up before and now with Dwolla, it’s much easier for us to incentivize sellers to grow a balance and request that payout in Good Buy Bucks. That generates repeat business for us.”

Crothers says she’s gone from being very “hands on” with payments to no longer really worrying about them. The focus is on expanding its operations to new locations across the U.S. Currently, Good Buy Gear has distribution centers located in Dallas, and Denver with a third being planned for Atlanta.

“The less we have to worry about payments, which is a big part of our business, the better,” Crothers says. “Doing that accurately and efficiently is core to our business and is something Dwolla allows us to not spend a lot of time thinking about on a daily basis. That’s a huge win for us.”

Langenfeld says they considered other payment providers as well but timing issues and rules with splitting transactions prevented any partnership.

“Dwolla really allows us to scale and not worry about that part of our business,” Langenfeld says. “If you have a lot of customers that you need to pay, I don’t know if there’s a better solution than Dwolla. Having our payments done programmatically has worked really well for us.”

Good Buy Gear CEO & Co-Founder Kristin Langenfeld / COO & Co-Founder Jessica Crothers