Like many of you, I buy a lot of my designer goods on the resale market. While I’m certainly sad to miss out on the experience of leaving a store swinging a branded shopping bag, my location and budget force me to seek out alternatives to the big glamorous shopping districts found in major metro areas.
I know I’m not the only one; many of us turn to resellers for various reasons. It could be to save money or the environment or to give us peace of mind knowing we won’t be the first to cause the initial scuffs.
Whatever one’s reason might be, it’s become clear that this large shift towards pre-loved has created a resale marketplace with more competition and more incentives to cut corners in order to stay on top.
Recently, everything came to a head when The RealReal found itself in hot water for misleading its customers and investors.
Last month, I was surprised (and somehow not surprised) when I received a notice from my investment bank letting me know TRR was facing a class-action lawsuit from which I was entitled to compensation.
According to the notice, the company made false statements to the U.S. Securities and Exchange Commission, resulting in an artificially inflated stock price not long after its IPO in 2019.
I personally only held a few shares for a very brief period of time (don’t worry, this was play money I was willing to potentially lose, not my retirement funds). Still, the larger implication made me wonder what really went wrong. How did one of the former top dogs of resale become what it is today and what does it really take to make it as a successful reseller in a world flush with fakes and subpar business practices?
In my mind, there are three main things needed to gain consumer trust:
Full Transparency In The Listing
- The photos for the listing are clear; The site uses high-quality photos to demonstrate the real quality of the item.
- The seller is open and honest about any defects; They’re stated in the description and visible in the photos.
- There is an accurate product description; The season or collection the bag was from is stated or at the very least it states the color name from the brand instead of just ‘pink.’ This listing on Farfetch for a Lady Dior is a great example.
Offer a Go-Between
The business has a go-between or middleman – There’s a step in the process the item goes through after purchase but before being shipped out to you. Light cleaning/restoration, real authentication, a prep step, something! Peer-to-peer sales are a risky business.
Provide A Fair Return Policy
They have a fair return policy – Most of your money should be refunded if returned by a certain date or 100% if something ever slipped through the cracks of authentification. I think Fashionphile’s return policy is one of the best in the business because it gives you 30 days to return an item instead of 14.
Interestingly enough, if you read the return policy for some of the peer-to-peer resellers, you’ll find that they don’t offer returns for swimwear, beauty products, and handbags! The most profitable and most counterfeited items aren’t returnable? That’s very telling.
The Road Forward
They say the road to hell is paved with good intentions, but good intentions don’t ever justify defrauding others.
It’s important to remember that while many sites seem nice at first glance with claims of saving the planet and you some money by participating in the circular economy, those middlemen and slightly longer wait times are very necessary.
My goal here isn’t to slander TRR or companies like it; I’ve also used the site to sell and research items in the past. But keep in mind that the demand is growing faster than a lot of companies’ capabilities and it’s our job to hold their feet to the fire by only purchasing from resellers with strict oversight and fair policies that protect those giving over their hard-earned money.
I’ve never been the CEO of a multimillion-dollar company but I have been someone who’s spent years saving up cash to buy a bag on the resale market. So what do I think really makes a successful reseller? – one that doesn’t bite the hands that feed them.
What are your thoughts on the state of the resale market? Do you have a favorite site to get pre-loved goods?