Rebag wants to turn secondhand luxury buyers into sellers and investors to boost its inventory.
In announcing its new Wallet feature Wednesday (Dec. 7), the reCommerce platform is hoping the incentivized savings feature will entice more sellers into the market, Rebag founder and CEO Charles Gorra told PYMNTS, while also encouraging consumers to embrace an investor-like mentality as the 8-year-old business — and the industry — grows.
“The thesis was always that a couple of very powerful trends would emerge, one of them being the desire for sustainable commerce,” Gorra said, “and the consumer moving to an investor mindset and less of a consumer mindset, by investing in great products that last.”
Where he once worked the phones convincing people that resale is a viable business, now Gorra said that conversation is “not so much about the why it’s more about the how. It’s about the models, the types of categories, the types of platforms, and the execution of it.”
The evolution of the resale industry is something PYMNTS’ Karen Webster predicted early in the year, as it became clear COVID would take a backseat to inflation.
Luxury retailers would be wise to use resale “as an entry point to build the next generation of brand loyalists” she wrote.
The new Rebag Wallet feature will help buyers and sellers manage these shifts more easily and provide a kind interest-generating benefit. “Seller funds” from the sale of items are deposited in the online wallet, together with any available Rebag Credit or Rebag Rewards points.
One innovation is called Premium Payouts, a new wallet feature that rewards sellers who keep their funds in-house with a 1% monthly interest credit for up to a year, and an additional 10% credit to those who hit the anniversary mark. In short, a customer who sold a $5,000 bag could have a $6,200 balance in 12 months, the company’s release noted.
See also: Rebag’s AI Solution Brings Transparency, Confidence To Luxury Resale Market
The Price and Value of Authenticity
As Rebag brings the power of digital payments to bear, resale merchants including Rebag are undergoing another major shift, that of item authentication, its problems, and its promise.
Gorra said the main issue for reCommerce merchants is now supply — getting people to part with that Chanel bag or those Gucci sunglasses, noting that resale has a natural bias for luxury since the authentication time and expense is the same for a $5 T-shirt or a $5,000 handbag.
That said, trust and authentication — and in turn reputation — are everything in the resale market.
“When you’re dealing with these types of [high-priced luxury] items, authentication is usually number one on the list,” he said, calling it the primary reason would buy something at a Rebag rather than slightly cheaper on a peer-to-peer marketplace. “Because you have the consistency of source, you have the consistency of authentication, but it comes at a cost,” he said — albeit one that is far below retail in an industry to purposefully does not mark down much inventory.
In fact, authentication at the very high end is so important that Rolex announced it will handle its own authentication to avoid reputational damage that resale can cause.
“It’s incredible. I think [Rolex entering the market] is the biggest news that I’ve heard in the last decade in terms of the resale world,” Gorra said. “I think there will be a ‘before and after’ with that news. It changes everything,” he added, saying that it further legitimizes the industry.
While Rebag does sell watches — including used Rolexes — Gorra said they account for only a small portion of its sales mix.
Still, whether it’s Rebag or any of its listed or private resale competitors, the business ultimately comes down to having the right goods to sell.
“Supply is usually the bottleneck in all resale businesses and every platform,” he said, noting the implied demand for beautiful branded items at attractive price points that are typically well below retail.
“The challenge is the reverse, how do we convince people to sell those items?” he said, “and this is where all the service comes in.”
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