GoodwillFinds, launched by Goodwill Industries, is rapidly expanding its online presence and revenue despite challenges in supply and funding.
Goodwill Industries, a century-old nonprofit with a significant presence in brick-and-mortar retail, has taken notable strides towards modernizing its operations through its online platform, GoodwillFinds. Launched to enhance e-commerce capabilities in 2022, the site has rapidly gained traction, with CEO Matthew Kaness reporting to Modern Retail that demand for the service is currently experiencing a “rocket ship” effect. However, he also highlighted a significant challenge, stating, “Our demand is outstripping the supply.”
The GoodwillFinds team, consisting of just nine members, manages the e-commerce activities for Goodwill’s extensive network of 153 independent organizations across the United States and Canada. Historically, many of Goodwill’s approximately 3,000 stores had limited experience with online selling, primarily utilizing auction services. Now, GoodwillFinds has developed a comprehensive system that enables these organizations to upload inventory to an online catalog, oversee customer service, and coordinate deliveries.
Since its inception, GoodwillFinds has generated over $65 million in gross merchandise value for local Goodwill resellers. Currently, the platform boasts more than 1 million listings that include apparel, electronics, jewelry, and home goods. Unlike its competitors, such as ThredUp and eBay, Goodwill operates as a nonprofit, which impacts its growth potential in the competitive online resale market valued in the billions. Specifically, Kaness noted, “We are severely funding constrained [at GoodwillFinds], because we have no equity to sell,” explaining that the department relies on local Goodwills for funding.
The company has made significant advances since its launch, on track to service half a million customers in the current year. The number of Goodwill regions utilizing GoodwillFinds increased from four in 2022 to 13 in 2023, with ambitious plans to reach 40 by the end of the year. The platform’s average order value is around $120, and it has diversified into higher-priced categories such as collectibles and home decor, positively affecting repeat purchase rates.
Despite these gains, the platform is in the early stages compared to competitors that have long established their e-commerce operations. Kaness pointed out the challenges of adapting within a digital landscape transformed by giants like Amazon, stating, “There’s a giant digital transformation that we’re trying to support and participate in.” To address the complexities of e-commerce, GoodwillFinds is focused on providing local organizations with essential resources and automation tools. A recent innovation is the introduction of an AI chatbot named Gem, which assists with customer inquiries and has managed over 70% of inbound contacts since its rollout.
Currently, online sales through GoodwillFinds account for an estimated 10% of Goodwill’s total revenue. Kaness believes that tapping into online growth could significantly enhance this figure, stating, “we could go to a future where 25%, 30%, 50% of resale revenue comes from online versus stores,” which he views as a “massive opportunity” for the broader Goodwill network.
Dylan Carden, a research analyst at William Blair, expressed cautious optimism about GoodwillFinds but highlighted potential profitability issues, particularly given its focus on lower-priced items. He remarked that while GoodwillFinds may thrive by expanding into higher average order value categories like jewelry and luxury items, it could face tough competition from established platforms like eBay. “Ebay is so established here. You’re kind of going off a gorilla there,” he said, emphasizing the superior search features of rival platforms.
Looking ahead, Kaness acknowledges that GoodwillFinds has room for growth within the omnichannel retail environment but remains optimistic about its team’s progress and achievements. “In any startup, you’re just trying to hit milestones,” he stated. “I’m really proud of the team and the platform we’ve built. We’ve proved out the demand and we’ve delivered really high value on the donations we resell.”
Source: Noah Wire Services
