Kogan’s third-party reseller platform has taken off in its first three months, so much so that it could be a “transformational step” for the online retailer.
Kogan Marketplace opened its doors to third-party vendors and distributors in March 2019, functioning similarly to other ecommerce rivals Amazon.com and EBay.
Built on Kogan’s proprietary platform, Marketplace giving sellers access to Kogan’s marketing support, payment gateways, customer support and integration with backend operations. Big names like Microsoft, Philips, LG and Micron have already signed up to sell on the platform.
From launch until the end of financial year on 30 June 2019, Kogan earned $1.5 million in commission-based revenue from Marketplace, which the company said was reflected in its 12.5 percent rise in gross profit to $90.7 million.
“The launch of Kogan Marketplace is proving to be a transformational step for the company. As Kogan Marketplace grows, the company expects to be able to reduce its reliance on third-party brand inventory and become more capital-light,” the company said in an ASX statement (pdf).
The next step for Marketplace is working to onboard a backlog of resellers onto the platform, said Kogan.
Kogan Marketplace now accounts for 1.6 percent of Kogan’s overall gross profit.
Kogan’s overall revenue grew 6.4 percent to $438.7 million, while gross sales reached a new milestone by crossing the half-a-billion mark to reach $551.1 million, up 12 percent. Meanwhile EBITDA grew 15.6 percent to $30.1 million, while net profit rose 21.9 percent to $17.2 million.
Kogan’s “exclusive brands” category remained the biggest earner, representing 49.7 percent of overall gross profit. Exclusive brands, which includes Kogan’s own-branded products, grew revenue by 41.6 percent.
Third-party brands didn’t share the same success, which the company pinned on changes to GST rules and “apparent avoidance of GST by foreign websites,” a claim CEO Ruslan Kogan has made before. Third-party brands also took a hit from “subdued demand” for Apple products, particularly iPhones. Third-party brands account for 26.7 percent of overall gross profit.
Kogan added 221,000 net new active customers in FY19, up 15.9 percent to 1.6 million across its now 15 different business units, which includes pet insurance, energy, credit cards and travel.
The company also announced that it’s been busy investing in its own fulfilment centres, expanding its warehouse footprint to 13.