If you've ever tried selling luxury clothes on The RealReal, you might have experienced the excitement of possibly making some extra cash from your designer closet, only to be disappointed by the actual payouts. If this sounds like you, you may want to consider other platforms that charger lower commission rates and let you manage your own listings (versus collecting your items). Here are our top three tips to help you get a better return on your investment.
1. Consider a Peer-to-Peer Marketplace
A peer-to-peer marketplace allows you to set your own prices and peer-to-peer options typically charge lower commission rates than managed marketplaces like The RealReal. This is because you are in charge of listing your items, versus having someone else take photos and find the details for you.
Peer-to-peer models vs managed marketplaces
At a high level, there are two types of marketplaces for reselling clothes. The first is a Peer-to-Peer marketplace (think Poshmark and eBay). The second is a Managed Marketplace (like ThredUP or The RealReal).
On the other hand, in a managed marketplace, the platform will handle all of the listings and store your items for you until they’re sold. The seller just ships the items they want to sell to a warehouse and the platform handles everything else from there, including taking photos, writing descriptions, and listing the item. As a result, sellers have no say in the pricing or listing of their items and they pay a higher commission rate. A managed marketplace will charge a higher commission rate for all of the additional services they provide. Their commission rates are typically between 30-80% of sales and vary based on the sale price. For example, if you sold an item on The RealReal for $180, you would only retain $81 and The RealReal keeps $99. The RealReal on the other hand, has a tiered commission structure that takes into account the sale price of the item as well as how much total volume you sell through the platform. The returns are considerably less if you are selling items with a listing price under $500.
Choosing peer-to-peer
If you’re looking to get the best value out of your items, we recommend using peer-to-peer marketplaces because they charge lower commission fees so you’ll get to retain more of each sale. We’ve aggregated the commission rates of popular peer-to-peer marketplaces below for a quick comparison.
Of course, there are other factors aside from commission rates to consider when choosing the right platform to sell your clothes. We’ve broken those down for you in our Comprehensive Guide of Online Marketplaces.
2. Price Your Items To Sell
If you decide to list your items on a peer-to-peer marketplace, pricing your designer clothes appropriately will be crucial to attract buyers and ensure your items sell quickly. While it might be tempting to set high prices in hopes of maximizing profits, overpricing can deter potential buyers and lead to your items sitting unsold for extended periods. This becomes important for platforms like Poshmark that favor newer listing in its discovery algorithm.
Platforms like Future Reference help sellers price their listings by providing a suggested price range based on similar items that were recently sold. You can also see comparable recent sales on the product page before you list, for additional context. From there, you can factor in other considerations such as the condition of your item and how quickly you want to sell your item. Be realistic and competitive with your pricing to increase the likelihood of making a sale.
3. Keep Up with Trends
Fashion trends change rapidly, and staying on top of what's currently in demand can make a significant difference in how quickly and lucratively your items sell. Designer clothes that are trendy and in season tend to attract more buyers and fetch higher prices.
Future Reference makes this easy for sellers through:
- Wishlist interactions: Not only can potential buyers show interest and wishlist your items that are for sale, but also recent purchases you’ve added to your digital closet. These insights will help you decide what to put up for sale.
- Brand insights: Future Reference proactively pushes insights via email when items or brands are in demand.
- Recent sales: Future Reference shares data on comparable items that were recently sold to help you optimize your listings.
Conclusion
Reselling your designer clothes doesn’t always have to be such a headache. First, by choosing a peer-to-peer marketplace, like Future Reference, you’ll be retaining more earnings and paying lower commission rates compared to a managed marketplace. Second, platforms like Future Reference give you full control of pricing with the help of tools that analyze recent comparable sales for you. These tools make it easy to stay up to date on trends by pushing you insights on trending brands and comparable recent sales. And lastly, with your purchase info saved and digitally authenticated, you can list in seconds, making the effort required closer to a managed resale platform.
