Retail resale sites continue to grow | Crain's San Francisco

Retail resale sites continue to grow

  • Artist Tracy DiNunzio started Tradesy, a Santa Monica-based resale company. | Photo courtesy of Tradesy.

    Artist Tracy DiNunzio started Tradesy, a Santa Monica-based resale company. | Photo courtesy of Tradesy.

  • San Francisco-based thredUP lets users order a Clean Out Bag. | Photo courtesy of thredUP

    San Francisco-based thredUP lets users order a Clean Out Bag. | Photo courtesy of thredUP

  • thredUP customers can stuff the bag with anything they want to get rid of and send it to thredUP to be sold.| Photo courtesy of thredUP.

    thredUP customers can stuff the bag with anything they want to get rid of and send it to thredUP to be sold.| Photo courtesy of thredUP.

Resale websites and apps make it possible for everyone from fashion aficionados to spring cleaners to make a few bucks.

Some of the most popular sites have one thing in common: they make it easy to sell used goods.

Artist Tracy DiNunzio, 39, wasn’t always interested in fashion. During the recession, her painting sales plummeted. She slept on her couch while renting out her room on Airbnb and taught herself coding, marketing and website design.

From there she started what has since turned into Tradesy, a Santa Monica-based resale company. The company started as Recycled Bride, a way for women to resell wedding dresses. DiNunzio serves as the company’s chief executive officer.

In 2012, DiNunzio expanded Tradesy to other clothing, accessories and shoes. Now, the site’s wedding section represents less than 2 percent of sales, she said. DiNunzio has received roughly $75 million in funding, including $30 million in Series C funding from Wildcat Capital Management and other groups in 2016.

DiNunzio said she started getting well-known investors in 2014 which “challenged her to grow even faster.”

Today the company has roughly 100 employees. Its headquarters in Santa Monica are also home to a showroom which showcases luxury, vintage and rare pieces.

DiNunzio only sees the resale market growing.

“There’s a new wave of startups really targeting women to engage in resale behavior and simplifying things like shipping and returns that were preventing them from selling online previously,” she said. “So resale is becoming really popular. It’s a way to redeem some of the value you’ve spent on an item so you can shop more."

The resale market also allows people to purchase designer goods that might previously have been out of reach. DiNunzio said a classic Chanel bag that retails for $5,000 might only cost $2,600 on Tradesy. Moving forward, DiNunzio sees more people selling goods and investing in higher-end pieces in the resale market.

“Our work will be done when every woman who shops online, sells online,” she said.

Tradesy isn't alone in this space of the industry.

POSHMARK

Redwood City-based Poshmark is a popular resale website and app for clothing and accessories. Right now, it has three million sellers, also referred to as stylists, according to chief executive Manish Chandra.

Chandra said most users open the app seven to nine times a day, making it a social app, not just a resale app. Roughly 8 million items are curated a day, resulting in 25 million items on the app at any time.

“We check our phones multiple times a day. People are constantly looking for something fresh and new,” Chandra said. “That repeat engagement, that freshness, is why these apps are doing so well.”

The company has been in business for the last six years. Two years ago, it added men’s and kid’s fashion.

“If you start from a resale perspective, we place $4-5 billion of fashion in our closets every year,” Chandra said. “Roughly one in three items is never even touched. Three out of four items are hardly used. Every two or three years we’re building $1 trillion in inventory that needs to be moved [industry-wide]. Consumers have so much stuff. That need has been here for a long time."

Poshmark recently raised $87.5 million in Series D funding, led by Singapore-based Temasek Holdings. The money will fund a global expansion, according to Chandra.

THREDUP

San Francisco-based thredUP takes the concept of spring cleaning a step further. People interested in selling items order a Clean Out Bag. They can stuff the bag with anything they want to get rid of, and send it to thredUP.

thredUP does everything else. The company photographs, lists and sells the items. People are then paid for their items.

“We found that women don’t wear 60 percent of what’s in their closet,” spokesperson Samantha Jacob said. “They need a place to bring that clothing so it doesn’t end up in a landfill.”

The company launched in 2009 and has since grown to roughly 1,000 employees and is now in 44 countries.

The company lists roughly 1,000 items an hour, Jacob said.

thredUP also offers “Goody Boxes” which allows people to try items before they buy them, similar to other fashion box services. It also launched its first brick and mortar stores.

MERCARI

Mercari started in Japan but now has offices worldwide, including one in San Francisco. In addition to clothes, the app sells home goods, beauty and tech items. 

The app has 35 million downloads in the U.S. The site has roughly 100,000 listings a day, according to spokesperson Jordan Barnes.

Barnes said listing an item you want to sell online takes less than a minute. Mercari sends you a prepaid shipping label and takes 10 percent. The seller doesn’t get paid until the buyer certifies that the item was in the condition promised.

Barnes said the need really comes from sites like Amazon making it “so easy to buy.”

“Because that is so easy, we have this influx of stuff,” Barnes said. “But there’s not an easy way to get rid of these things and get some money back. We have this mental barrier that it will be hard and clunky and time consuming. We want selling to be as easy as buying.”

BOB’S WATCHES

Resale sites aren’t only for clothing. Huntington Beach-based Bob’s Watches resells luxury watches. The company had more than $20 million in revenue in 2018, according to owner Paul Altieri. 

The company lets people send in their watches to be evaluated. It then buys the watch, restores and resells it online. 

“Luxury shoppers have become much more comfortable buying from a reputable dealer like us online than they were before,” Altieri said. “Luxury is surging online. The luxury consumer was late to the market in general. No one trusted the internet and the payment systems behind it but now more are turning online and the consumer is more comfortable.”

Altieri added that selling watches allows customers to turnaround and buy something else they might not otherwise have been able to.

“A lot of times people have an older model they want to sell so they can buy a newer model,” Altieri said. “We provide a secondary marketplace for people to sell their watch at market value in a safe, transparent marketplace.”

February 12, 2018 - 7:46pm