Snobswap Lands a Cool Million to Push Online Consignment Shopping
The consignment shop is actually a fairly clever idea; instead of buying inventory from a central supplier, allow people to bring in used merchandise for sale at a central hub. The shop displays the items, puts them in nice arrangements, and then handles the sale, cutting in the supplier for a percentage of the sale afterward.
Consignment shops are some of the biggest survivors of the online shopping assault on brick-and-mortar operations, though used merchandise dealers like Amazon and of course eBay certainly are high-profile ways to get rid of used stuff, there may be a more formal competitor soon in Snobswap.
Snobswap recently came off a successful round of seed funding geared toward expanding a “luxury online mall,’ which in turn is working to help smaller shops—like consignment shops—make the move to the Internet. Indeed, “luxury” does seem to be the order of the day for Snobswap, making a push on the high-end goods market with a host of popular brands ranging from Alice & Olivia and Cartier to Louis Vuitton and Tory Burch. Snobswap is currently host to around 100 shops on its site, and means to at least double that number by this time next year.
With around 25,000 consignment stores in the United States alone, and about 40 percent of these falling into Snobswap’s bailiwick, that means a lot of room for expansion.
Snobswap’s particular focus, according to co-founder and CEO Elise Whang, is on brick-and-mortar operations.
There are plenty of competitors going after those huge numbers, but stores like TheRealReal operate like a single online boutique, while Tradesy goes for a peer-to-peer approach, and that seems to be the sum total of the field…except for Snobswap. Interestingly, reports suggest that Snobswap was once a peer-to-peer model, but after moving away from that, the average order size went up substantially, and repeat business now accounts for almost half of sales.
Revenue growth, meanwhile, is running somewhere around 20 to 25 percent a month.
This all explains pretty well why Snobswap managed to land fresh funding—who doesn’t want a slice of action like that?—and at the same time shows where this can go. If it makes some moves to mobile, it should do even better all told; it’s a great idea to offer deep discounts on high-end clothing and the like, but to offer it on a mobile basis? That could be even better.
Since Snobswap offers both new and used material, it can also make itself into a one-stop-shopping venue for the high-end shopper. With a special promotion running where those who refer friends get a $10 off coupon for purchases of $100 or better, that should help drive still more traffic to the site.
Perhaps the most telling example of Snobswap’s value was found in the jewelry section. The second listing I spotted was a Cartier Trinity Ring, selling for a whopping $11,995.95. Given that that was marked down from $22,000, that represented a huge discount.
That same ring—or one that looked pretty much identical—could be found on TheRealReal selling at $39,500, it’s clear that Snobswap has a serious value proposition going, and one that could really be augmented by mobile payments.