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DTC Brands are Launching Peer-to-Peer Resale Marketplaces

Fashion resale has rapidly entered the mainstream thanks to the rise of platforms like The RealReal and Thredup and brands are starting to take interest.

To date, brands’ direct experience with resale has been limited. Most instead team with an outside platform to facilitate the resale of their products, to avoid managing the logistically complicated process. Due to the middleman, however, the brand takes a smaller cut of each transaction. But DTC fashion brands are making use of a new Shopify app for a different take on branded resale: their own peer-to-peer marketplaces.

Et Tigre, a Los Angeles-based fashion brand, launched a peer-to-peer resale marketplace on its online store on Tuesday. It allows shoppers to sell directly to each other, with minimal legwork required of the brand. Et Tigre co-founder Adele Tetangco said she needs to approve each product before it is listed, while all other logistics are handled by the buyers and sellers themselves. The brand supplies the seller with a shipping label to send the product to the buyer, and the shipper sets the price.

Tetangco said the marketplace lets her avoid sales, since customers who want a discount can instead buy used. Plus she expects it will attract new customers who might want to test the brand at a lower price point, while also increasing the circularity of her products.

Tetangco said she’s marketing the marketplace just like she would any other feature, including in email and paid social campaigns. She’s also using email service Klaviyo to automatically follow up with buyers of pre-owned goods, in the hopes of converting them into primary customers.

This model also skips over the big challenges of a brand-run model, including processing and posting every piece that comes in as a separate SKU.

“Retail is built for one SKU that encompasses thousands of individual pieces in the same condition,” said Andy Ruben, CEO of resale tech company Trove. “When you buy something secondhand, you’re buying that specific item. And when you process a unique item, it becomes a unique SKU. If you’re selling a dozen [pieces] a year, that’s manageable without building up some infrastructure. But if you scale at all, it swiftly becomes really complicated.”

Et Tigre’s resale marketplace is powered by Recurate, a Shopify app that, according to Tetangco, makes it simple and fast to get a marketplace up and running; it took a few weeks from hearing about Recurate to launching the marketplace. Recurate launched in September. Other fashion brands currently using it include Brass Clothing, another DTC womenswear brand, which calls its marketplace The Exchange.

Recurate and the hosting brand take a percentage of each sale, while the seller gets the majority of the money from each transaction. The exact breakdown is different for each brand, but typically Recurate takes less than 10% from each transaction, and the percent the brand takes is up to them. Brass CEO Katie Demo said Brass does not take a cut. Recurate has been reaching out to brands directly to set up partnerships. While there are several resale-focused apps on Shopify, only Recurate facilitates peer-to-peer shopping.

According to Demo, owning a peer-to-peer marketplace is a way for the brand to have some control and presence when their products are resold, with minimal investment.

“We have a private Facebook group for about 2,500 loyal customers, and they organically started buying and selling used clothes to each other about two years ago,” Demo said. “We moderated it a little bit, but it soon became really cumbersome to maintain, so we moved it over to our site, and it’s been a very smooth transition.”

Demo said Brass launched The Exchange in October, and in the first six weeks, it saw more than 300 individual transactions.

The downside of the peer-to-peer model is there is no process for authentication, so customers are taking a risk when buying. All sales are final for both Brass and Et Tigre. Sellers do have to upload photos of the product, and Demo said 300 sales have been completed without any issues. However, she said that if ever there was an issue, Demo would replace or compensate as necessary. It would mean taking a loss, but inserting the brand into the transaction comes with extra responsibility, she said. On the Facebook group, customers could settle disputes on their own.

Tetangco said it’s worth dealing with extra responsibility for the chance to keep both primary and secondary sales all under the brand’s purview.

“Everything should come back to the brand,” Tetangco said. “Resale and marketplaces, all of that should come under the umbrella of the brand experience. More brands are going to go this way in the future.”

Credit: Glossy – Click here to view the article

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