Digging for dollars
It would be easy to dismiss DiggersList.com as just another Internet-based business trying to launch itself into the home improvement sector, albeit with a special blend of environmentalism, bargain hunting and social networking. Skeptics will see the company’s rapid growth—from seven to 24 cities in less than a year—as unsustainable, or question the strength of its revenue stream. But people raised the same doubts about Craigslist, and few can argue with its success these days. And DiggersList is essentially the Craigslist of the home improvement industry, minus the ads seeking roommates, romance or lost pets.
“Every once in a while, we’ll get someone who will put up a purse or a pair of UGG boots for sale,” said Matt Knox, CEO of DiggersList. Those ads are quickly removed, as the site restricts merchandise to home channel items: building materials, roofing, plumbing, electrical, tools, flooring, lawn and garden equipment and home decor items. All the listings are free, including those Internet retailers selling new merchandise.
Knox got the idea for DiggersList in 2008, while he was working as an insurance broker for contractors. “They always had materials left over after jobs,” Knox recalled.
Sometimes it went into the contractor’s “bone yard,” but more often, the stuff ended up in a dumpster. What if someone set up a place where remodelers, property owners and DIYers could buy, sell and trade construction materials?
After a beta test in Los Angeles, where Knox is based, DiggersList officially launched in October 2009 in eight additional markets: Orange County, Calif.; Ventura County, Calif.; San Diego; San Francisco; New York; Chicago; Tucson, Ariz.; and Phoenix. Company co-founder Johnnie Munger, who serves as the chief technical officer, lives in Tucson. Knox and Munger are brothers.
Much has happened in the six short months since DiggersList went live. The company continues to add cities at a rapid clip, and in early April, expanded into Denver; Seattle; Philadelphia; Miami; Washington, D.C.; Atlanta; Detroit; Charlotte, N.C.; Austin, Texas; and Minneapolis.
A tour through DiggersList’s free classifieds can turn up anything from the fantastic to the mundane. While there are a number of liquidators, discounters and wholesalers looking for another sales channel, the site also caters to construction companies selling leftover plywood and landscapers with piles of extra pavers. In Boston, a guy named Michael is selling an Anderson half-round window for $275 (cash only). A Dallas contractor has faux wood ceiling beams (four of them) left over from a job. He’d like to sell them all together but is open to individual offers. The Spanish chandelier from the lobby of the Granada Theater in Santa Barbara was recently listed for sale.
Because all classified listings are free, a number of e-retailers have gravitated to the site, as well as brick-and-mortar stores that also sell over the Internet. Postings break down, roughly, into a 65/35 ratio of used/new merchandise. The site’s revenues come from banner ads, and judging from its current advertisers, a number of companies are not scared off by DiggersList.com’s non-conventional format. Pergo recently promoted its flooring at Lowe’s in a co-branded banner ad, and Lumber Liquidators, Ford, Chevy and AT&T are also advertisers.
DiggersList has morphed from a marketplace for building materials into a portal for home-related goods and services, with sections devoted to real estate (appraisals, inspections, buying and selling) and tradespeople. Contractors can advertise their services for free, and DiggersList allows each one to set up a profile page that describes their specialties and shows examples of their works, if they choose. Services are broken down into 22 different categories, from additions/remodels to windows/doors.
There’s also the “Project & Job Center.” Employers can place free ads for installers and other tradespeople, and homeowners can post jobs and request bids. Projects range from hooking up a hot tub in Las Vegas to laying a new driveway and pad for a manufactured home outside Seligman, Ariz.
And then there’s the fun stuff: blog postings, videos, random comments and articles about the next wave of housing foreclosures or why cocoa mulch can be poisonous to dogs.
Despite its local community flavor, DiggersList has an expansion plan that is geographically mind-boggling: Knox hopes to plant a flag in 224 cities within the next 12 months. He bases his decisions on where to open next partly on feedback from the site, where visitors leave comments under “Suggest a City.”
“We’ve received over 1,000 requests,” Knox said. “We monitor them closely.” A partnership with Habitat for Humanity has given DiggersList a jumpstart in many markets and also benefited the charity’s ReStores, which post their inventory on DiggersList for free. In turn, the classified listings launch within each market with a critical mass of goods for sale. The ReStores take advantage of DiggersList’s free Widget, which allows users to lift their classified listings off DiggersList and create a “store-front” on their own home page that can be automatically updated. Contractors and building supply outlets can also take advantage of the widget when they have leftover building materials from a job. “Putting the widget on their Web site allows them to liquidate those materials simply without having to recode [it>,” Knox explained.
Knox won’t say whether DiggersList is profitable or not, citing the fact that they’re a privately held company. “I will tell you that the interest to purchase banner ads on DiggersList has grown exponentially in the first quarter of 2010,” he said.
