Tradesy founder Tracy DiNunzio is working toward a future where fashion’s resale economy is equal in size to its retail economy.
For now, it seems far off — and the company has to tackle its peers first. Tradesy, a peer-to-peer authenticated resale marketplace launched six years ago, has been competing for market share from companies like Poshmark, ThredUp and The RealReal, all of which want to offer the best secondhand buying-and-selling experience for fashion, footwear and accessories. With $75 million in funding, two acquisitions (one ShopHer, a competitor, and one a concierge service for closet organizing) and its first profitable year under its belt following 2017, Tradesy is, for now, playing the momentum game.
“It was 2009 [when we launched], and at the time I was very good at hunting through consignment stores, but I wanted more selection, and Ebay felt complicated,” said DiNunzio. “I did the research and found that a lot of people felt the same way. However, I was not the first to figure out that this was going to be a big emerging category, and it became increasingly crowded. Now we’re down to a handful that have reached decent scale and remain in the category.”
DiNunzio joined the Glossy Podcast to discuss differentiating in a competitive market, working off of limited inventory, building Tradesy into a brand of its own and mending contentious relationships with luxury players.
Battle of the secondhand marketplaces
Being in the reselling business comes with an inherent challenge: These companies depend on the limited pool of sellers who are not only sitting on valuable secondhand items but are willing to go online to sell. To bring in customers, these companies first have to win over the sellers, and within the category, each marketplace has its own set of advantages and disadvantages.
Tradesy, for instance, offers returns. (All Poshmark purchases are final sale.) But shipping times are an ongoing hurdle: While ThredUp and The RealReal ask sellers to send in inventory before it’s posted to the marketplace, sellers on Tradesy decide their own pricing and then ship out items when they sell. That can result in unreliable delivery windows for buyers. To combat such setups, Tradesy relies on its circle of power users who use their earnings on the platform to buy more.
“It’s a lifestyle for our core power users. There are a lot of incentives to selling on Tradesy to keep your earnings on the platform and re-spend with us, so it keeps women in a cyclical commerce behavior where they’re using the money they’ve earned to fund their next purchase,” said DiNunzio. “Our mission is to make resale as efficient, safe and stylish as retail at scale. But that’s a heck of a mission when you think about the logistics piece especially.”
Resolving luxury brand tension
Tradesy works with a small handful of brands to share data on what’s performing, who’s buying product secondhand and how they can use that information to their advantage. For the most part, brands have warmed up to the idea that there’s a robust afterlife of products once they’ve been sold, but that’s been a work in progress.
“There’s a natural tension there when companies have built their brand around systems of inclusivity and limited availability — everyone knows you can’t just walk into a store and get a Birkin, because they’re intentionally scarce. When you have a robust resale market, it diminishes the scarcity of that product, which could diminish the value of the product at retail or the brand equity,” said DiNunzio. “What we’ve found is that, for our customers, the retail spend increases once they find there’s a secondary market option — it’s easier to buy a $10,000 bag knowing that you can sell it. So the brands are starting to soften to the idea of a robust secondary market being an asset.”
Tradesy’s own brand building
When Tradesy launched, it put brands front and center, and disappeared into the background. In the years since, DiNunzio has been working to establish the company as an attractive brand in its own right. To do so, Tradesy’s gone into physical retail with an emphasis on influencer and celebrity activations in those stores, and inserted brand content at every step of the purchasing and selling processes.
“We know that our customer values a brand and wants to spend her dollars and her time on a platform that’s built by a brand she cares about,” said DiNunzio. “Through mechanisms like customer experience, we’ve started telling our own story more — why we believe in women, secondhand and sustainability — and it’s resonating and evolving, and we have plans to incentivize Tradesy as a brand further.”