Clutter to cash: Interview with Steve Oliver of musicMagpie
Steve Oliver of used product trader musicMagpie tells Move Commercial how trust and innovative technology are moving the North West firm towards its £1 billion ambitions.
Words by Natasha Young
When used product trader musicMagpie set up a new Stockport headquarters in 2017, it marked somewhat of a shift in the growing company’s outlook.
The move saw the firm, which was first established in a garage, relocate from Hazel Grove to a 10,000 sq ft Grade A office at the heart of town centre regeneration scheme Stockport Exchange.
“In some ways it was a conflict, a difficult decision because we’ve grown by operating the business on a shoestring, and yet we’ve moved to this ‘posh’ new head office,” CEO and co-founder Steve Oliver tells Move Commercial. “I had to look forward to the next 10 years – not look back at where we’ve come from but say ‘where do we want to take the business?’
“The answer is that this can be a £1 billion business in the future.”
Oliver formed the company in 2007 with Walter Gleeson, who he worked with at the helm of the now defunct retailer Music Zone.
The duo began buying and reselling pre-loved CDs, DVDs and games at a time when the economic recession was biting and consumers were looking for ways to boost their finances, and their experience of working within the entertainment chain helped set them on the path to success.
“Towards the end of working at Music Zone we started understanding how interesting used product was,” recalls Oliver. “GAME and Gamestation were starting to sell used games in-store and, in fact, were giving large parts of the shop because they understood they could make some more margin out of used product than they could new product.
“There are two sets of consumers – one who has finished with the product they’ve been using and is willing to declutter it, sell it and raise some cash against it in an as easy, convenient and hassle-free manner as possible; and another is looking to buy a used product in a good as new condition for less than half price.
“This can be a £1 billion business in the future.”
“We saw that market opportunity to say ‘nobody is selling CDs, DVDs and games together online so we can act as an aggregator of the stock, offer an online trading service, refurbish the product and offer it for resale’.”
musicMagpie scaled quickly as it became a prominent vendor on internet retail giant Amazon and then on eBay, enabling consumers to sell goods via the online channel in a way that offers a smaller return than if they did it directly but requires a lower level of effort. It created what Oliver sometimes refers to as a “lazy man’s eBay”.
“That was what we did with all the product we were buying, so we started to buy thousands of units a day and then tens of thousands of units a day, and then ultimately at the peak of buying physical media we ended up buying about 30 million units,” he adds, explaining that on average, people pack around 70 units in a box and send it to musicMagpie to trade in.
During its 11 years in business the company has grown exponentially, reaching its current turnover of £125 million, and has evolved its offering along the way.
An expansion into America with its ‘decluttr’ brand, for one, has seen the company set up a 60,000 sq ft distribution centre and office in Atlanta, Georgia as it aims to emulate its UK success across the pond.
“This year the runway is currently $50m for the business over there so it’s catching the UK business up,” says Oliver. “It’s a market that’s four times bigger so we’re far from done in the UK in terms of growth, but we think the most dramatic growth could come in the next two years in the US.”
Then there’s musicMagpie’s range of used products, which continues to develop and assist in future-proofing the firm.
Whilst Oliver believes “the death of the CD and DVD is exaggerated,” he admits the physical media products which have provided musicMagpie with such a strong foundation are of a “market in decline”.
They’re expected to remain part of the brand’s business for some time yet, as many consumers remain reluctant to entirely let go of physical media. Plus the firm is dealing in “much lower, better value used products” as it sells CDs, DVDs and games at an average of £3 online, or in Poundland stores thanks to an exclusive supply contract with the high street chain.
“There’s a hell of a lot of brilliant tech businesses in the North West. I think you have to work hard to attract and retain talent.”
“However, can we continue to grow the business at the same rate with physical media products? No,” says Oliver. “That was why three or four years ago we started to look at what other products we can sell.”
Oliver is tight-lipped about future ventures but suggests consumers’ awareness of the musicMagpie brand and the trust they have in it, which has built over time, has supported the company’s foray into trading tech devices – predominantly mobile phones – as well as books and slightly more diverse products like Lego.
“What we aim to lever is that trust and the history people have with the brand,” he says. “We aspire to be the John Lewis of used product.”
A need to stay at the forefront of technology also continues to bring change to musicMagpie, as simplicity is key to enticing consumers to sell used items through its platforms.
“It’s a digital world we live in and people are demanding more and want to deal with us in an easy and convenient fashion,” says Oliver.
“A number of years ago it was a very big day in our history when we launched our app where you could sell to us by scanning the barcode – it was a big turning point because then it actually became fun. Now we’ve got our musicMagpie shop on the app.
“When you’re in any business you’ve got to look forward and, circling back to the head office we’ve got, that’s what we’re doing. We’ve set ourselves up in a base that will last us many years and allow us to attract and retain the talent that will enable us to deliver these digital innovations going forward.”
Accommodating around 75 members of the company’s workforce, which totals nearly 1,000 employees, and offering room for more, the headquarters is also a stone’s throw from Stockport train station.
Such factors, Oliver suggests, are strengthening the firm’s ability to compete amongst the North West’s thriving digital sector.
“There is a hell of a lot of brilliant tech businesses in Manchester and the North West – we’ve got The Hut, Missguided, boohoo.com, Autotrader,” he says. “I think you have to work hard to attract and retain talent.
“The challenge we were facing in Hazel Grove is that people were looking at the brand and going ‘I like that, it’s interesting’. They’d read the job role and salary, and then they’d visit Google Maps to look where we were and say ‘I’m going to struggle to get there every day and that’s not a glamorous place to work’.”
musicMagpie is now exploring artificial intelligence (AI) among said digital innovations as it strives to enhance its user experience moving forward.
“We’re looking at developing some technology with a partner of ours, and it’s basically an AI-driven chatbot,” reveals Oliver.
“If from a chatbot we can [give consumers] a series of AI-driven questions that put what the answer is and then ask a new question, even to the point where they can say ‘will you make a video of it?’ or ‘can you just turn it round so I can see it from another angle?’, then we might be able to go back to the consumer and say ‘I now understand exactly what it is, I can see it’s in good condition so I can give you an offer price of X – accept the offer or decline with yes or no’. If they hit yes we take them through the logistics journey of how we’re going to get that product.
“They then know what price they’re going to get, how the logistics are going to work, and as soon as it arrives that as long as we can confirm it’s exactly what we thought it was they’re going to get paid that same day. The trust is huge but we do see that as a definite way we’ll be communicating with our customers in the future.”