By adaptive - June 8th, 2015
The so-called “recommerce” business is blossoming. Women, in particular, are emptying their closets and making some bucks or creating credits by trading in their old clothes. A number of companies have sprouted to help make the process as painless as possible, providing boxes to ship goods, offering to photograph the items, and even writing up listings for a nominal fee.
Analysts say consumers can be hooked by these online, upscale consignment/thrift shops due to the breadth of selection, high-end odds and sods that a retailer can’t assemble in one store. In fact, some observers say trendy shoppers may be happy to pay a premium, up to 20 percent over market value, if the experience with an online outlet is easy and provides access to unique product that’s difficult to find locally.
And now Oakland, California-based Threadflip is trying to take things one step further, by promising to process clothes and accessories within 24 hours of receiving them.
Threadflip co-founder and CEO Manik Singh talked with Open Mobile’s Robert Gray about the logistics and prospects for the three-year-old company and the overall business…
OMM: How did you come up with the idea for Threadflip?
Singh: My wife, like every woman I know, has too many clothes she doesn’t wear. She had a full closet. My cofounder Jeff and I were having a dinner with my wife and his girlfriend. Both women said if they could sell things easily without lugging them to a brick and mortar store that they’d do it.
Most women wear 10 to 15 percent of their closet; we knew if we could find a seamless way for women to unlock this hidden value we could create something of value.
OMM: Why should women, or men, use Threadflip instead of Poshmark or eBay?
Singh: There are so many players trying to solve for the same problem. It’s different business model, you can do DIY, list your item and photography or some are straight up consignment. We offer both ways, we are unique in that we let people sell on their own or we can do full service. That seems to resonate. For lower end items, they’ll list but higher end they want us to photograph and list; so we are a hybrid marketplace.
We have a team of authenticators in Oakland. We take returns no questions asked, no one (else) does that. We built a platform on trust
in ‘recommerce’, we found the sweet spot in the middle: accessible premium is where our magic is. The average price for items is $85; most people have everyday stuff, Tory Burch, Coach.
OMM: Are you more consignment or online retail?
Singh: We’re a consignment-oriented business; you get paid when items sell. We don’t pay up front. You list or we list, but you get paid after the sale. Sellers have profiles and can manage items. We have buyers and sellers, and a significant overlap. When it sells we give people the option to cash out or get credit. The majority of our users use the credit.
OMM: How big of a market is re-selling?
Singh: It’s massive. There’s massive potential--as big as $100 billion. Think about people shopping online, the average woman’s closet is 80 percent unused. The potential is humongous.
OMM How quickly is revenue growing?
Singh: We have rapid growth. This business is growing 40 percent month-over-month. We do very little paid acquisition of consumers and 60 percent of first-time customers make a second purchase.
I see 20 percent sustainable month-over-month growth.
OMM: What does this same day processing mean to the average seller/buyer? What’s the big deal?
Singh: We have thousands or millions of items, we have lots of single items the ability to store, steam clean, photography, and ship it on time. We’re convinced the on demand nature of this biz will make us extremely competitive if (customers) can have the most seamless, fastest experience and get the most for their money.
OMM: The moat doesn’t seem that deep, what’s to stop others from entering the market?
Singh: It’s a first mover advantage we’re going for. It’s not a patentable hidden formula, but I feel like we have a first mover advantage. We deconstructed and then reconstructed our process, we’re nimble. We’re fairly confident I think (24-hour processing) will become the norm.
OMM: How does your mobile experience differ from rivals?
Singh: 60 percent of our revenue is mobile, it’s growing rapidly. We have 100 percent growth on mobile in a year. It makes sense. If you’re shopping on Nordstrom, you find shoes. Nordstrom rarely runs out of something. If you get a notification about a new Louis Vuitton bag on our site, if you wait, you probably won’t get it. A lot of consumer behavior is just in time.
There’s camera functionality, it takes 30 seconds to list on mobile.
Power users use both (mobile and desktop). It’s a little easier to manage inventory on the web. Consumer use case is definitely very strong on mobile.
OMM: Are you going mobile first?
Singh: You can set a price alert, you can click on the heart icon, if the price drops we tell you. The seller knows people have saved it but are not willing to pay the current price. It’s not a static marketplace. If my item got 300 likes, so if I drop price or add sale notification they’ll all get notified. They use that feature all the time.
Unlike a regular auction, it’s dynamic. We have an added feature—make an offer. Instead of waiting for the seller to initiate, I can ask the seller if they’re willing to drop the price. You listed for $100, I’ll give you $90 for it.
OMM: Can an Uber drop off the goods for same-day delivery?
Singh: We haven’t talked to them, but we could. We did a partnership with Postmates for same day delivery and it worked fantastically in San Francisco. I think we’ll build it and roll out nationwide. The focus right now though is totally on the supply side.
For all the latest mobile trends, check out The Open Mobile Summit 2015 on June 29 in London.