In an attempt to fix the cracks in the conventional consignment model, leading luxury resale platform Rebag is stepping into a new era by introducing consignment as an option for its consumers.
Once solidified for its buyout model, the platform now presents customers with three unique choices at the point of transaction – ‘consign’, ‘buyout’, and ‘trade’. This progressive strategy is designed to enhance the appeal of consignment dealings for online sellers while tackling prevalent issues associated with the model.
Contrasting the buyout approach wherein Rebag purchased the product from the seller at a fixed cost, consignment entails the seller to authorize Rebag to sell their possession on their behalf. Given that the estimated proceeds of consignment often possess an air of uncertainty, Rebag’s initiation promises a secure, predetermined price range, incentivizing more customers to venture into the competitive resale landscape.
Rebag Aims for Expansion
As Rebag anticipates its 10th-year celebration, its vision is set on expansion. With a thriving team of 150, the company is keeping a keen eye on profitability. Despite operating as a startup, the firm’s CEO Charles Gorra views the present as a crucial turning point for the business’s growth strategy. He anticipates a rise in the number of sellers choosing to consign with Rebag’s new model compared to the existing buyout users.
Gorra’s ambition is to draw in sellers by presenting a refined version of consignment. By identifying and solving three major hurdles associated with conventional consignment – vague payout amounts, fluctuating commission rates, and uncertain timelines, Rebag hopes to create a more beneficial environment for sellers.
The Challenges Faced by the Resale Market
The primary luxury industry, like the resale market, has experienced a noticeable pullback in expenditure due to ongoing economic constraints. This could potentially hamper Rebag’s aspirations for growth. However, as per the 2023 Luxury Resale Report by The RealReal, the resale value of luxury items has witnessed an increase. Furthermore, the Gen Z population has shown a 40% spike in their vintage bag purchase compared to the previous year.
Previously, Rebag’s buyout-only model was its method for dealing with some of these challenges. However, with the passage of time, Rebag began to see a need for more diverse options, as sellers started exploring third-party platforms for consigning items that could have been sold through Rebag.
The Difference
What sets Rebag apart in the crowded market is its promise of offering consignment sellers a binding price range. The company’s CEO believes that this is an invaluable aspect in a marketplace where most quoted consignment prices are not guaranteed.
Although this innovative model does not completely eliminate all the pitfalls of consignment, it promises a 15-day payout period and a guaranteed price margin. However, it cannot assure the timeframe within which an item will sell.
The Promise of Increased Profits
What further enhances the appeal of the consignment option is that the quoted price spectrum is seldom lower than the buyout alternative. The potential profit could surpass the buyout proposal by a considerable margin, making it an attractive and profitable venture for sellers. However, there is a catch. Sellers need to be patient and wait for their items to get sold before receiving their earnings.
Rebag’s Wallet Feature
Based on the idea that sellers are willing to wait for a larger payout, Rebag introduces the ‘Rebag wallet feature’, also available to those who consign. Under the current buyout model of Rebag, sellers who choose to retain the funds in their Rebag wallet can earn an added 1% interest each month, leading to a 12% increase over a year. This indicates that those who sell high-value bags and can afford to wait a few months for their revenue have an opportunity to earn sizeable profits.
Rebag’s foray into the realm of consignment is not just an innovative business move but also a potential game-changer in a market rife with inefficiencies and ambiguities. As the digital resale marketplace continues to expand, it will be interesting to watch how this new model fares and influences industry norms.
