Start-up Snobswap has raised more than $1 million to expand its luxury, online consignment mall. The company is helping mom-and-pop stores—those that would normally have to set up their own online store or market via social media—to get online and curate their inventory.
According to co-founder Elise Whang, the company experimented with a peer-to-peer model, but soon realized that focusing on stores was more scalable, TechCrunch reported.
The online consignment market itself already has a number of competitors, ranging from those that sell consigned items for consumers to direct sellers such as eBay marketplaces, specifically eDrop-Off. Familiar names include The RealReal, Tradesy, Couture Within Reach, Threadflip and Shop-Hers.
Snobswap plans to differentiate itself with unique partnerships, such as the one it has with personal loans provider Affirm to help finance purchases. The recent pairing has increased sales by 30 to 40 percent this month.
Currently Snobswap features items from 100 shops and wants to reach 200 to 300 over the next year. While there are more than 25,000 consignment shops in the United States and 40 percent are high-end, the company has only garnered 1 to 2 percent of the market.
"Nobody is solely focused on brick-and-mortars, as we are. They're either like TheRealReal's model—like an online consignment boutique…then there's those like Tradesy, which is p2p. We're in a space that's unique and focusing on providing an online platform for brick-and-mortar boutiques," Whang told TechCrunch.
The company makes money by charging shops 10 percent commission on sales and other fees, including an initiation fee.
Investors in the recent funding round include Dingman Angels, NextLevel Management, the founders of Simplehuman, and Simplepitch, a previous investor.
Resale and consignment stores of all types, not just apparel, are rising in consumer popularity. Earlier this year, Plato's Closet and Once Upon A Child, both resale stores, made Entrepreneur Magazine's Franchise 500 List. In the 36th annual rankings, these two retailers nabbed the No. 108 and No. 140 spots overall, showing the growth of the trend.
-See this TechCrunch article
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