Resale Marketplace Advice: 7 Challenges and Solutions To Overcome Them

As secondhand fashion gains more traction among consumers, digital resale platforms have emerged in full force. Platforms like Depop, Farfetch, Poshmark, and The RealReal are not only posting record performances, but they are also forming tight-knit, loyal bonds with shoppers.

For example, San Francisco-based The RealReal posted a record first quarter gross merchandise value (GMV) of $327 million this year. While an extraordinary 80 percent of The RealReal’s business in Q1 came from repeat shoppers, its base of first-time customers also rose by 34 percent.

With resale appealing to a growing share of consumers, chief among them Gen Z, more brands are jumping on the bandwagon. Levi’s, Lululemon, and Nike all launched in-house resale programs over the last year.

However, the rise of resale comes with many challenges for e-commerce brands and marketplaces. Let’s look at the most pressing obstacles for resellers and solutions for how to overcome them.

1. Avoiding Shopper Disappointment

When reselling used items, you can’t completely control the volume of each item or style in your inventory. Beyond approving and rejecting items for resale, you can’t dictate how many of each you can add to your e-commerce site. That, combined with rapid turnover of new items, means that shoppers may be easily disappointed when the item they want is out of stock.

Perhaps you already sold the one vintage Chanel messenger bag a shopper wanted, or you don’t have the New Balance 530s in their size. The challenge for brands and marketplaces doing resale is creating a journey that quickly and successfully matches shoppers with other products they’ll love (in the right size), so they’ll be motivated to buy something else and not bounce.

The Solution

There are a few ways to keep the product discovery journey flowing and prevent your shopper from leaving the page in a bout of disappointment.

One remedy is to offer hyper-relevant product recommendations. Let’s take the example with the New Balances above. Maybe you don’t have a size 9.5 in the 530 model, but you could display all the similar models you do have her size in.

Another way is to provide tailored inspirational content based on their past searches.

By displaying a carousel of product images or an inspiration board that includes the product categories or brands they previously searched for, you can steer the shopper’s attention to other items they might love.

2. Standardizing Product Tags and Descriptions

Resale marketplaces such as Depop and Poshmark, in which shoppers upload items for sale themselves, run a non-traditional inventory model.

One of the greatest challenges associated with this model is standardizing product descriptions and tags, which is necessary for creating a consistent discovery experience as well as in-depth data analysis.

The Solution

You can’t rely on individual users to adhere to tagging and description guidelines. Ten different sellers could upload photos of the same green Michael Kors dress using different descriptive words and tags. You need a system that can analyze product photos and create robust, accurate, and standardized products tags and descriptions automatically.

Solutions such as visual AI-based deep tagging analyze items based on a wide range of visual attributes and automatically produce every possible relevant tag using standardized keywords.

3. Recreating ‘The Hunt’

For secondhand shoppers, one of the most satisfying parts of the thrifting experience is digging through racks of clothing to find those few special pieces. This real-life treasure hunt has helped some secondhand stores, such as certain Goodwill locations, garner a reputation for offering the best experience.

Now, with more shopping moving online, fashion resellers are tasked with delivering an equally satisfying hunt online.

The Solution

Although many thrift shoppers have the patience to physically sort through endless racks of clothes, they will probably have less patience for scrolling through rows and rows of irrelevant items on your website. That’s why ensuring key e-commerce functions — such as on-site search and web navigation — work flawlessly.

Think of it as a shopper moving around a physical thrift shop. Everything from the images and text on your homepage to where your menu buttons are located, which categories are featured, the search functionalities you offer, and the filters you can apply influence how successful “the hunt” will be.

4. Authenticating Items

Certain segments of resale — such as sneakers — are incredibly lucrative.

Some of the most popular sneaker drops sell on resale platforms like Goat, Fight Club, Stadium Goods, and eBay, for 100 to 400 percent more than retail price.

At such a high price point, having a system and protocol in place to authenticate items is integral — not only for setting prices, but also to avoid enraging customers and destroying your reputation.

The Solution

Every resale platform has their own policies for authenticating items. While having items verified by experts might be ideal, not all brands or resale platforms have the capacity to do this at scale.

In such cases, the best approach is combining AI-based solutions that are trained to identify fakes with a team of “counterfeit hunters” to ensure product integrity.

For example, Poshmark has a community reporting feature and a “content integrity” team that is tasked with finding and removing alleged fake products. It also has a machine learning and rule-based detection system that proactively identifies and removes suspicious product listings.

5. Setting the Right Price

Determining prices often goes hand in hand with authentication. But aside from in-demand sneakers, luxury items, and rare vintage pieces, used items generally depreciate in value, which means their resale price should be lower than their original retail price.

But how do you decide how much lower? For many brands tapping into resale and launching buy-back programs, this may feel like a subjective decision.

The Solution

Come up with a standardized set of criteria and a corresponding point-scoring system for assessing and pricing items. Here are just some of the points you’ll want to include:

• Inspect products for obvious signs of damage, degree of wear, and imperfections. Flawed items will be priced lower.
• Register the item’s model or style and use historical data to understand how in-demand the product was when it hit the market. Popular items will be priced higher.
• Analyze current market and trend data to understand how in-demand the item is now. More demand = higher price.
• Count how many of said item you have in your resale program. Rare items may be priced higher (if they are also in demand).

After scoring an item on all of your criteria, you can determine by what percentage to mark it up or down in your resale program.

6. Accurately Depicting the Condition of Items

This is especially pertinent for platforms where users upload images of their own items for sale.

In order to accurately depict the condition of used items, sellers need to take high-quality photos from multiple angles, including those that disclose imperfections or damage.

The Solution

While you can’t expect every one of your sellers to invest in a professional-grade camera, you can publish guidelines that help them take high-quality photos with their smartphones.

For example, you can require sellers to take a minimum of, say, six photos, with instructions on which angles to capture.

Other guidelines could outline whether the items need to be shot against a white background, if they need to be shown on a model, if the original packaging needs to be shot, etc.

As an e-commerce site, you can also add features like superzoom to allow shoppers to inspect items up close.

7. Striking Balance Between Vintage and New

Some shoppers turn to secondhand for the chance to buy hard-to-find vintage pieces, while others are simply looking for a better deal on contemporary items.

For brands that resell used merchandise, they must determine how to balance old items with newer ones.

The Solution

Just like any other investment scenario, brands and retailers should turn to data to inform their decisions. In the end, striking the right balance is all about accurately predicting customer demand.

• Where are secondhand shoppers searching for on-site? What percentage is seeking current styles, and what percentage is hunting for vintage finds?
• How in-demand were/are the pieces that consumers want to sell back to you?
• What are the current trends saying? Is a certain vintage style coming back? Is a new trend still gaining momentum?

By considering these types of questions and analyzing relevant data, you will gain a better idea of which styles and pieces to resell, and which to reject.

The Resale Surge Hasn’t Peaked Yet

Resale is still trending upward. Consumer demand continues to rise, and new platforms are sprouting up left and right. Investors, who have been watching the market’s success, are lining up to get in on the action.

Although resale may not be a fit for every brand or retailer, it’s worth considering how it might be in the future and preparing to overcome predictable obstacles.