Fashionphile CEO on Differentiating in Luxury Resale

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00:00Talk me through how you source your items.

00:02When we're talking about ultra luxury, scarcity creates value.

00:06So how do you actually bring them to your site?

00:10Thank you for having me.

00:11It's a great question.

00:13How we bring them to the site is through interactions with people like yourself

00:18and people who have bags themselves that they've bought.

00:21So we buy them directly from individuals, from their closet,

00:25make you an offer, kind of a cash offer, direct buyout,

00:29up front, and then you send the bag in, and that's how we get our inventory.

00:33So in order to source all this great stuff,

00:36we have to have great relationships with handbag owners

00:39and jewelry and watch owners throughout the country.

00:42And how do you differentiate yourself from a RealReal, for example,

00:46which seems to offer something similar in that competitive landscape?

00:50I mean, how do you attract those folks that you need to have that relationship

00:54to come specifically to Fashionphile?

00:57Yeah, I mean, one, we're specialists in handbags and accessories.

01:02So the ultra luxury brands, those classics, Chanel, Louis Vuitton, Fendi, et cetera,

01:07we only do accessories, and we're experts in authentication.

01:11But there's another differentiator I think is really important to the customer

01:15is the direct buyout.

01:16So we actually offer you money up front.

01:19So you don't have to go through a consignment process or wait for it to sell

01:23before you know how much you're going to get.

01:24We'll just give you the money up front and say, here's your $2,000 or whatever,

01:28and you can go away and be done with it.

01:31Yeah, so that's one unique differentiator is that specialty.

01:36And our specialty allows us to make really accurate direct buyout

01:40and take the risk ourselves of having to resell it.

01:43So, Ben, I'm curious if you could just kind of talk about just kind of broader trends

01:46in this space, the idea that the idea of secondhand goods has sort of taken on a cachet

01:53that didn't always exist in the past.

01:54I mean, there's always been thrifting, always a certain cohort of people

01:57that were always willing to do that.

01:59But the amount of people, the percentage of people who are willing to sort of traffic

02:03in this space is really just phenomenal compared to what it was, I don't know,

02:0720 or 30 years ago.

02:09Yeah.

02:09I mean, we have noticed that.

02:11And we've been doing this like 20-some years.

02:13So, we've kind of seen that change in the customer.

02:17But the thing that's happened is the customer has kind of realized all the benefits of pre-owned

02:22that maybe they didn't before.

02:23Like, it's not only the price benefit, but the optionality, the choice of all the different colors

02:29and styles that have been released over the last many years are all available today.

02:34And there's a circularity component.

02:35I think customers are prioritizing some of that sustainability and the circularity

02:40and they're realizing they have value in their closet and they can use that value to buy the newest things

02:47and just kind of keep refreshing.

02:49So, I think it's just become they've realized how fun it is, how much choice they have,

02:54and how much their dollar, their bag-buying buck just stretches so much more

02:58when you're trading in and trading up constantly.

03:00I am curious, have you ever received any pushback from some of the luxury brands themselves?

03:05I mean, how do they feel about all of this?

03:07Yeah.

03:08Not a direct pushback necessarily.

03:13We look at the brands as something like, we need them, of course.

03:18We want customers to keep buying from, straight from, you know, those brands,

03:22whether it's, you know, Chanel or Emez or Louis Vuitton.

03:24We want them to buy that because that's how we get amazing things.

03:27They buy it and then they sell it to us.

03:28And we think they also, the brands, do well with us in the market

03:33because we're putting money back into the hands of who?

03:36People who clearly are bag buyers.

03:39And so, I think we're fueling some of that, you know, the buying cycle to happen even faster.

03:45So, there's quite a good synergy between the brands and us.

03:49There hasn't been a lot of pushback that we've noticed lately.

03:53Well, Ben, something I always wonder when it comes to luxury resale, ultra luxury resale,

03:58is how do you authenticate the bags that are coming into you?

04:02How can you verify that they actually are some of the brands that you're talking about?

04:07Yeah.

04:07I mean, that's kind of part of the secret sauce of the business is that we have a team of trained authenticators

04:12authenticators who don't do anything except for handle each and every bag that comes in with, you know,

04:17a loop and sometimes an x-ray and, you know, using technology and experience to look at all the great, you know,

04:22the leather quality, the stitching, the smell even.

04:25And we just have trained experts that have, you know, years and years of experience looking at thousands of bags.

04:31And that's kind of like one of the, you know, the reasons people shop from us is that trust and authenticity.

04:37And it does take time and a lot of training to get people up to be able to have that level of expertise.

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