How to choose a reselling partner

The American boutique chain Francesca’s has been slow to get into the thrift store.

The private equity-backed retailer spent nearly a year considering different resale models and spoke to four potential partners before landing on ThredUp, the second-hand fashion site that also provides resale services. business-to-business resale for brands. Forever Francesca’s was launched at the end of January.

“We knew we had to be in resale, but we wanted to get there in the fastest, most cost-effective way,” said Jann Parish, Francesca’s director of marketing.

Brand resale is booming, with retailers ranging from Shein and Canada Goose to Mara Hoffman and Balenciaga adding some sort of second-hand commerce to their stores or websites. But starting a resale business from scratch is expensive and labor intensive. It’s also not easy to make a profit – most of the big resale platforms like The RealReal and ThredUp are operating in the red.

A parallel industry of white-label resale platforms has sprung up to handle much of the work behind the scenes. Some, like Archive, Treet and Recurate, specialize in creating peer-to-peer services, where a brand’s customers buy and sell used parts to each other. Others, including ThredUp and Trove, collect used items and create auction listings.

Most charge a setup fee and then take a percentage of each sale, though services like Trove that handle the end-to-end logistics can be more expensive.

According to Mimi Margalit, retail strategy consultant and former DTC merchandising manager at Rebecca Minkoff, launching a resale service should require the same kind of thought and consideration as designing a collection.

“Resale is merchandising,” Margalit said. “If you don’t choose the right experience, if you don’t choose the one that your customer finds the most meaningful or that resonates the most, then it really won’t be the most successful.”

A sea of ​​options

The first retailers to offer second-hand fashion built this business themselves (Urban Outfitters, for example, claims to have stocked its stores with vintage clothing for almost 40 years). As online resale took off in the late 2010s, a startup called Yerdle, now known as Trove, began building second-hand websites for brands like Patagonia, Eileen Fisher and REI.

Today, Trove has plenty of competition, from Recurate and Reflaunt to Archive and the Archivist. In Europe, Faume and Rebelle are two budding options. Most of these services tout their ability to build bespoke platforms based on a brand’s specific needs.

Net-a-Porter offers a personal concierge service through Reflaunt, where customers can send in or schedule a door-to-door pickup for used designer pieces they wish to sell. The luxury online retailer then lists its products on 20 resale marketplaces, including The RealReal and eBay, offering Net-a-Porter credit when items sell. This model makes sense for Net-a-Porter because it understands that its affluent buyers are more likely to be second-hand sellers rather than buyers.

Recurate and Archive offer both the peer-to-peer model as well as a managed inventory model where brands collect used merchandise and ship it to sellers. Archive also partners some of its brands with third-party warehouse partners to collect, package, clean, repair (if necessary), and resell items in the branded marketplace, such as with The North Face.

Retailers can also outsource resale to major consumer-facing online resale platforms, including The RealReal and Vestiaire Collective, which accept excess inventory and returned merchandise.

Managed versus peer-to-peer

When shoe brand Sarah Flint was looking to get into reselling, it opted for a peer-to-peer site created by Archive to reduce labor and logistics costs.

“We just didn’t think we had the capacity to handle inventory,” Flint said.

On the other hand, peer-to-peer doesn’t make sense for all brands, especially high-end labels that may want to authenticate, cleanse, and photograph high-value archival pieces. Oscar de la Renta launched his managed resale channel, Encore, in 2021 to showcase vintage styles collected from boutiques and customers. Coins are authenticated and refurbished in-house before being listed on the site, managed by Archive.

Francesca’s ultimately rejected the peer-to-peer model because there was no guarantee its customers would engage in resale themselves, Parish said, while ThredUp’s existing buyer base and supply Francesca’s products are already a proof of concept.

Some brands work with several resale platforms. Even after workwear brand MMLaFleur launched its peer-to-peer resale marketplace, MM Second Act, in 2021, it maintained a partnership with ThredUp to provide customers with free “cleaning kits” to send in. their second-hand clothes, whatever the brand. .

For many retailers, reselling is as much a marketing game as it is a major source of revenue.

“The way we use it is customer acquisition and retention,” said Sarah LaFleur, Founder and CEO of MMLaFleur. “Right now, about 25% of Second Act customers are first-time customers… We’ve actually seen them convert to full-price customers.”

Francesca’s Parish also counts resale costs as part of the retailer’s marketing budget. Being an opt-out on ThredUp is a customer acquisition driver, she said, but it costs about half the price of paid advertising channels such as social media.

The customer experience

For French brand Ba&sh, the most important attribute for a reselling partner was being able to provide a seamless experience for customers and having a “good interface on the site,” said Desiree Thomas, CEO of Ba&sh North America. After considering three possible candidates in the United States, Ba&sh ultimately chose Archive and a peer-to-peer model. In Europe, Ba&sh works with Faume, a managed resale marketplace.

“We wanted to make it as easy as possible for the customer,” Thomas said. “From a visual point of view, [Archive] is a user-friendly experience and a simple approach to the buyer. »

There are considerable differences in how reselling services build their respective platforms. Archive and Treet, for example, create a mirror resale website separate from a brand’s main e-commerce experience, while Recurate allows brands to directly host their resale marketplace on their online stores. This means that when the main website receives a content update, the resale channel does too, so it’s always on-brand and minimizes additional maintenance for the brand, according to Margalit.

“Ultimately reselling is an extension of your brand perception,” she said. You present your brand through this experience and put yourself in the hands of a software company that creates a service for you.