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Consignment Web Sites See Growing Audience

A slew of digital sites have popped up that both streamline the secondhand shopping process and broaden the customer base.

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NEW YORK — Gone are the days when consigners had to lug pre-worn and vintage wares in hopes that the local resaler would accept and resell items. The sector is now one of the fastest growing in e-commerce.

A slew of digital consignment Web sites have popped up — like The Real Real, Material Wrld, Vaunte and Closet Rich — that both streamline the secondhand shopping process and broaden the customer base.

“Five years ago, there wasn’t a demand for pre-owned ready-to-wear or couture, but in the past two-and-a-half-years it’s slowly trickled up. People have realized that consumers will spend up to thousands for these items,” said Macala Wright, a digital marketing consultant.

Often, a representative from any of the above sites will meet a potential consigner at their home and personally select merchandise to sell on their respective commerce platform. In terms of efficiency, Wright finds the online consignment process preferable, as the associate takes the merchandise, puts it online and conducts all aspects of the transaction for the consigner. In most cases, it also winds up being more profitable for the consigner.

Additionally, potential consumers aren’t limited geographically or by the people who live in their city who shop at the local consignment store. The goods one has to offer are now available on a much larger scale — and often globally.

The Real Real, which will unveil its first mobile shopping app and see a relaunch at Therealreal.com on Wednesday, leads the charge with respect to the resale shopping space. Sellers have had the ability to upload items via an iPhone app or schedule an appointment with an associate to pick up merchandise they wish to sell, thanks to the site’s mobile consignment app that launched last September.

The almost two-year-old Therealreal.com sees 1.5 million visitors a month and has more than 750,000 members. There are 32,000-square-foot and 8,000-square-foot warehouses in San Francisco and New York City, respectively, and 106 employees (including a director of authentication), chief executive officer Julie Wainwright told WWD on a tour of the company’s headquarters here. There are also small teams of merchandise managers here and in Los Angeles that work with sellers, as well as additional employees located in 16 cities across the country, like Miami, Philadelphia, Atlanta, Houston, Dallas, San Diego, San Francisco and Chicago.

Last year, the site received and shipped more than 120,000 luxury items (15,000 items alone were sold in January but the average ranges from 15,000 to 20,000), and according to Wainwright, the number is growing at 20 percent month on month.

The site has had a mobile consignment app for sellers to use for the past six months, but Wednesday will mark the company’s first shopping app. Wainwright said that 50 percent of the consumer base already shops on a mobile device.

Currently 60 percent of the units listed on The Real Real are apparel, 25 percent is footwear and the rest is handbags, fine jewelry and other accessories. However, on a dollar basis, clothing is the leader, followed by handbags and shoes. Consigners walk away with a 60 percent cut of items sold, and once they sell $5,000 worth of merchandise, the cut increases to 70 percent for the next year. The average consigner makes about $6,000 a year, and the largest consigner to date made $195,000 in 2012. Regular membership is free, but for $5 a month, users can become First Look members and get previews of the sales before they start.

Divided into sale categories and brands, the condition of items is listed as “very good,” “excellent” or “pristine” —which translates to never been worn. The Real Real only accepts product from the last 10 years, with the bulk from the past two years. The Row’s alligator backpack, which retailed for $39,000 when it hit stores in 2011, is priced at $6,000, less than one sixth of the original price.

Vaunte began four months ago and was co-founded by Gilt Groupe alumnae Christian Leone and Leah Park. The two, who left the flash sale site in May, raised more than $1.1 million two months before the platform’s official launch on Nov. 15. Funding was led by Maveron and Battery Ventures, with angel investors Christopher Burch, Horiyoshi and Nate Richardson.

“Our sell-through from December to January has increased by 62 percent per closet, and our repeat purchases by customers is almost 13 percent,” Leone said, noting that items put on the site by influencers like Allison Aston, Annabel Tollman, Stephanie Winston Wolkoff and Lela Rose are likely to sell out.

The point of differentiation for Vaunte, who right now sells about 1,000 items a month (more than 6,000 are in inventory), is the editorial aspect. More than 220 brands have been purchased, and users from 170 countries have visited the site. Fifteen new closets and events are introduced a month, including San Francisco-based art adviser Sabrina Buell, whose closet debuts today.

The main focus for now, Leone explained, is to start with profiles of leading industry personalities and use them as the site’s editorial platform. Vaunte will sell anonymously, too, for those who don’t wish to have their closets featured on the site. Later in the month, a premium service and tab for those who wish to sell their items discreetly will be rolled out.

Leone maintains that a tiny portion — just 2 percent — consists of vintage. The site looks to target the fashion consumer who is already online shopping for current merchandise.

“The opportunity is huge. We’re starting with the high-end closets because this [product] isn’t necessarily in consignment stores,” Park said, noting that this particular category has been slower to come online than others. “We aren’t here just for starlets. It’s editorializing these women and the idea and getting the user base who’s interested in high-end fashion.”

Material Wrld was cofounded by Harvard Business School graduates Rie Yano and Jie Zheng, and like Vaunte sells designer clothes to a curated shopping community. The platform, which has been in beta since Aug. 30, has already raised $780,000. (Steven Alan and Great Oaks Venture Capital are investors).

Formerly a closed site, Material Wrld is now in public beta and anyone can browse by items or closets. It’s only when someone wants to engage — follow a closet or “like” an item —that the platform requests a log in, according to Yano.

Yano said that about 300 curated closets have appeared on the site, as well as content with weekly themes from Danielle and Jodi Snyder of Dannijo, DJ Mia Moretti, DJ Chelsea Leyland, Cory Kennedy and Steven Alan.

“Our items are mixed. There are things for sale, as well as things that are listed as ‘favorites.’ These items don’t have a price [because they aren’t officially on sale yet], but our site has been updated so if you’re in shopping mode, you click on shop,” Yano told WWD. “You can also be in discover mode where you can find out who has amazing items in their closets so you can follow them — and because fashion is fickle, something that is a person’s favorite today, can be put up for sale in the coming weeks.”

For Yano, most fashion marketplaces and consignment stores deal with products at the end of their life cycles, but at Material Wrld, an effort is made to share images and photos when a user still loves something — whether it be a pair of shoes or a statement necklace.

“We’re different because we focus on discovery and building an audience based on your style — and when one is ready to sell the items in their closet, they already have a following,” Yano said.

The site will relaunch at the end of March with enhanced discovery tools, and Yano and Zheng will toast the new site in April in partnership with Lookbook.nu and Twelv magazine.

“We aren’t replacing the consignment and thrift industry, but [we] will be offering services to complement our offline partners. We’re planning some offline events in the spring in partnership with brands and stores to facilitate the online-to-offline experience in the fashion resale space,” Yano said.

While not necessarily consignment, e-commerce sites dedicated to vintage — like Jennifer Collins’ site Pink Clouds that launched in 2010 or four-month-old Nifty Thrifty — are also becoming viable online resources for pre-owned clothing and accessories.

Nifty Thrifty founder and president Topper Luciani clarifies that the portal is not a consignment resource. Buyers around the country amass archives of vintage apparel from used clothing and vintage sources, and the team curates collections based on trends within.

Luciani found that the supply for used clothing was “seemingly infinite,” and after conducting a bit of research, he put together a business plan detailing the supply and demand for vintage shopping online.

“There needed to be a retailer for this, and someone that was curating these collections and connecting all of these shoppers,” Luciani said.

He received a seed investment of $50,000 from Mark Kingdon (now Nifty Thrifty’s chief executive officer), built a test Web site in 2011, and by May 2012 garnered interest from venture capitalists. By July of last year, Nifty Thrifty raised $2 million in capital from Tribeca Venture Partners, Greycroft, Idealab, Signal Ventures and Howard Morgan.

“We are different because most vintage clothing sites are marketplaces where people put their products online. We actually buy the inventory from all sorts of vintage sources around the country,” Luciano said, noting that it’s the only vintage dealer that green dry-cleans every article of clothing.

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