Postmates founder Bastian Lehmann joins Wealth! to discuss his new venture, Tiptop, and the unacknowledged value behind trade-ins.

"It's a new way to pay for things, maybe the new way to pay for things since the credit card. What we do is we allow you to trade in things you no longer need when you like to buy something new right at the checkout," Lehmann says, highlighting Tiptop's intervention in the market.

He continues by explaining how the business model will generate profit: "We charge a modest fee to the merchants that participate and that integrate Tiptop on the checkout and ultimately, we hope that there is enough margin in the products that we're purchasing from customers and that we're ultimately going to resell."

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This post was written by Nicholas Jacobino

Video Transcript

There's a real reluctance to commit to big discretionary purchases as more Americans are piling on credit card debt.

And our next guest is looking to make purchases more affordable by allowing sellers to trade in an item that they own to reduce the cost of a new purchase right at checkout.

Joining me now to weigh in on the launch is Bastian Lehman who is Tip Top founder and Ceo Bastian.

Great to have you here with us.

All right, first, just how would this work in practice, what goes into the verification process and kind of understanding what type of value someone would get for what they're trading in in order to put that value towards a future purchase.

Good morning.

And thanks for having me.

Um Let me, let me dive right in.

You just mentioned it, Tip Top is this incredibly exciting product that we're launching today.

It's, it's a new way to pay for things, maybe a new way to pay for things since the credit card, what we do is we allow you to trade in things you no longer need when you like to buy something new right at the checkout.

And that that is, uh, really, what is the key messaging piece here?

Um, if you're at the checkout, right, when you want to buy something, we allow you to offset the cost of that new product by trading something in and the whole process takes a couple of seconds.

What's this limited to?

I mean, can I trade in old shoes in order to get some new ones?

Like, where are you finding some traction right now?

Early on?

Well, uh your old shoes may probably be better off at the goodwill.

Um But I'll tell you what the average us household has around $2500 worth of goods that can be traded in and that we match with our catalog.

There's around 50,000 products and growing that we have in our catalog and that accounts to around $280 billion worth of goods in us households.

So I think about it as a bank account that American customers don't know they have and we give them access to it.

What is the strategy here for tip top?

How does tip top see its revenue model, its profit model even going forward?

We we, we want to offer this incredible superpower um to the customers and we won't charge them.

We charge a modest fee to the merchants that participate and that integrate tip top on the checkout.

And ultimately, we hope that there is enough margin in the products that we are purchasing from customers and that we're ultimately going to resell.

Certainly th this is a tough capital, uh tough capital environment.

How well funded is tip top.

Uh and, and how do you kind of look across the entire landscape and say where you're going to deploy this capital to make sure that you can get to that next growth phase as well.

We're, we're a very small team.

We're only around 14 people, uh very engineering heavy and we're focusing right now exclusively on the customer experience.

We, we want to get something out there and we believe we did get something out there that customers love and that customers love to use.

Um You know, when you launch a company and when you run a start up, you, your biggest job really is to test a bunch of hypotheses in in in really fast order.

So we're extremely excited about getting the product into customers hands and hopefully, it means that we now have to shift our focus to scaling.

Now, a few of us have built Postmates before.

Um and we had to scale in a market that was totally foreign to us extremely fast.

So we feel well equipped for the scaling challenge ahead.