RealReal Trades in Last Year's Fashions for Cash

SAN DIEGO (TheStreet) -- Look at your closet. Do you have any of last season's Chanel, Prada or Gucci collecting dust?

Now look again, but this time picture dollar signs.  

TheRealReal.com, a consignment website for luxury goods, will happily take those designer dresses, shoes or handbags off your hands, resell them and turn your pricey but oh-so-outdated fashions into cold, hard cash.

"All of a sudden the things you have in your closet, you have liquidity for. People sometimes get thousands of dollars," says Julie Wainwright, CEO and founder of TheRealReal, a site she calls the premier destination for luxury resale.

Created about three years ago, TheRealReal is designed to give eBay a run for its money in luxury goods resale by offering something eBay doesn't: authentication of the luxury items sold on the site.

The RealReal has a full-time staff of authenticators, horologists, licensed gemologists and art curators who inspect and authenticate every high-value item sold on the site, Wainwright says. But that's not the only difference she sees.

"We will pick up stuff in 16 cities. We try to make it really easy," Wainwright says. "If you want to send your items in direct, we will send a prepaid shipping label, and then we do all the work."  

Also see: 4 Lifestyle Apps for the Rich and Famous

TheRealReal pays consigners 60% of the sale price for their goods. Make $7,500 from selling items on the site and your consignment rises to 70% of the sale price.

Nearly 80% of the products on the site sell within the first month, Wainwright says. Payments are made to sellers on the 15th of every month. It's that simple.

It's a model Wainwright says will change the way people look at shopping for luxury goods and the way they look at unwanted luxury items.

If Wainwright is correct, she stands to make a lot of money. There's a substantial market for her to chip away at when it comes to the sale of luxury goods.

"I studied data about eBay. The site sells between $2 billion to $4 billion of luxury goods a year. And they have a lot of trust issues, and they're still able to create a marketplace," says Wainwright, who began her career at Clorox in brand management and  spent 30 years in the tech world, working her way eventually to CEO.

Wainwright found support for her site in research done by Bain & Co. as part of its Luxury Goods Worldwide Market Study, which found that $50 billion worth of luxury goods are shipped into the United States each year.

"We're not talking food or wine or hospitality, we're talking about clothing, fine jewelry, watches [annually], so it's a huge marketplace," she says. "If you look at what the potential is, very few people are going to schlep their stuff around to sell it. My goal was -- if we can add value by vetting and authenticating these things and providing great service, then we are going to have a huge business."

So far her theory has paid off. 

The site has 2.5 million members, consigners from 18 to 70 years old Wainwright describes as uber wealthy, and some who are just beginning to make their way in the world.

But when discussing TheRealReal and all it has to offer, it's important to not overlook the fun of shopping on a site -- of being a buyer, not just a seller.

For the savvy, die-hard fashion fanatic, TheRealReal provides a place to buy fabulous frocks, designer shoes and more at seriously deep discounts.  A dress that is one season old may sell for 90% off, says Wainwright.

Also see: Luxury Retailers Better Brace Themselves for Amazon

"Some brands depreciate faster then others. It depends on the brand, condition and season," she says of the sale prices. 

Between 2,000 to 3,000 items can be found on the site for sale every day.  

"We're not good at antiques or vintage. That's not our market. We're not good for emerging brands or for brands that have tons of product in the marketplace," she explains. "Louis Vuitton shoes, Prada, Manolos all do well. And Chanel does well."

Even Wainwright can't contain her fashionista enthusiasm when talking about some of the items to be had when shopping the site.

"Do you remember the Chanel runway boots with the chains, that were thigh high? We just got those in. They are amazing," she gushes. "We ran a charity sale with [basketball player] Dwyane Wade, and his things sold out in three or four hours. He just knows how to dress. He had beautiful shirts and jackets, designer shoes and his things sold out."

"Every day there is some big find," she adds. "We usually get last season's things on our website fairly quickly. We are only one season off.  I would say that's one of the really fun things about the site -- every day there is something amazing."

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