Like many retailers, Tradesy opened 2020 with great expectations and big plans.
Significant growth in terms of their active user base and revenue were on the agenda — to be supported by a major investment in marketing to get the word out about the Tradesy peer-to-peer (P2P) market model and its advantages for both buyers and sellers.
But as CEO and Founder Tracy DiNunzio told Karen Webster in a recent conversation, all those plans and expectations had to be revised sharply once the size and scope of the economic disruption caused by the global coronavirus outbreak started to become apparent in March. It’s been anything but predictable and something of a roller coaster ride, thus far.
“We had one of the best weeks ever in our business over the past week, something that’s left us pleasantly surprised, [but] cautiously optimistic,” DiNunzio told Webster.
Demand has been driven largely by great deals and discounts from sellers, including small- to medium-sized business (SMB) sellers who want to move inventory for cash.
That great week followed the last week of March and first week of April when Tradesy saw sales down nearly 60 percent from its normal baseline, something that DiNunzio is cautiously calling Tradesy’s low water mark.
Despite that uncertainty, however, Tradesy’s experience seems more unpredictable than wholesale negative. Many of the characteristics of its business that distinguishes it from its peers in the online fashions and luxury resale business have also turned out to be sources of strategic advantage for them, including having a platform and a business model that is helping them expand and scale their seller network.
“We haven’t announced it anywhere yet, but we are about to launch a new program and feature set that will allow retailers and brands to liquidate any overstock inventory on our platform,” DiNunzio told Webster.
She said she believes that because of the volume of visitors Tradesy has per month, roughly 8 million, and the demographic of those shoppers, mostly millennial women, the company’s odds are much better of recouping value via its platform than through traditional channels.
There’s another reason: Given how much spring season inventory is currently trapped in stores and boutiques nationwide, now is a good time to find a more revenue-producing way of liquidating those goods.
The Power A P2P Marketplace
Unlike most consignment resellers with warehouses as intermediaries between buyers and sellers, Tradesy’s P2P model makes it efficient for sellers and buyers to transact directly via its platform. Eliminating the dependency of a warehouse, many of which are shut down due to the pandemic, means that commerce on the Tradesy platform can flow uninterrupted, as always.
That, DiNunzio said, has helped to attract new sellers to the platform.
“We’re seeing more first-time sellers on Tradesy right now then we’ve ever seen,” she said. “It does seem like the combination of being at home with plenty of time to clean out your closet combined with the severe economic uncertainty of the moment is motivating many people who have never sold before to start selling.”
Getting sellers to sell now takes more of a focus, with an eye toward making it ever easier to sell on the site. As of today, she noted, it takes under 60 seconds to create a listing, which Tradesy’s platform then enhances with additional data and guidance on pricing. The goal is to make selling so easy that one can just do it in their closet in the morning while getting ready.
Once the item has a buyer, Tradesy sends the entire mailing kit — packaging materials, shipping label and all — although sellers are permitted to use their own custom packaging if they prefer. From there, she noted, it is a matter of boxing an item up, dropping in the mail and moving on.
The feedback Tradesy most commonly hears from new sellers is that the process is much easier than they thought it would be, she said. And the company is aiming to make it easier still.
“Our goal eventually is that a seller soon will be able to take a photo of anything in their closet, and our technology will be able to identify it with image recognition and instantly fill in all of the product information except for the condition,” DiNunzio said. “Once it’s that easy, it actually is even simpler than throwing all your stuff in a box.”
Simplicity is going to be key, particularly as the recovery period begins to gain speed.
Readying For Recovery
DiNunzio credits, at least partially, the recent uptick in demand to stimulus checks landing in the accounts of consumers who are eager to buy items other than essentials — inspired, perhaps, by the news that stay-at-home orders may lift soon for many. Interestingly, however, the biggest spike in sales the company has seen has been for designer shoes, and Louboutin’s that are made for walking outside of the house.
“I think it might be symbolic of people getting ready to leave the house again and feeling excited about being able to dress up, put on a pair of heels and go out,” DiNunzio said.
And as those customers are getting ready to (literally) step out, she noted, Tradesy is working overtime to level up the inventory selection available on the brand to meet customer hunger for luxury goods that they are seeing start to rise. Tradesy already has SMB boutique sellers who use the company’s site as a distribution channel. Soon, the merchants and brands that use the site to distribute their wares are going to get a lot broader as the company’s brand liquidation platform goes live.
Thus far, she noted, Tradesy already signed on a few brand partners, and the company is currently putting the finishing touches on that liquidation platform so that it will be ready by next month, which is about the time Tradesy hopes consumers will be re-entering the retail markets and looking to snatch up values on high-quality items in a vastly expanded line-up of goods.
“There are a lot of good prices and finds on Tradesy now,” she noted, “but it’s going to get even better very, very soon.”