The RealReal for Real?
November 3, 2019 10:41 PM Subscribe
How does The RealReal get away with taking such a big cut of consignment sales?
I was comparing The RealReal with Poshmark.
It seems that compared to Poshmark, The RealReal is more full service (photos, descriptions, packing, label creation, shipping) and officially takes ownership of goods, but they give the seller well less than 50% of the selling price, I think in many cases only about 30%, and interestingly they treat the commission as what they seller gets, not what The RealReal gets. It feels like the flipped everything around.
Poshmark on the other hand seems only to keep about 20%, and they treat the commission as what they are getting on the sale. That feels to me more like what I would expect for this type of service.
Why would anyone sell a high value item on The RealReal if they will get hundreds if not thousands of dollars less than if they sell it on another site like Poshmark? I mean, doing the photos and the other things I mentioned takes a little time, but not so much time that the savings wouldn't be worth the time spent, especially for a higher ticket item.
Is there something I'm missing?
I was comparing The RealReal with Poshmark.
It seems that compared to Poshmark, The RealReal is more full service (photos, descriptions, packing, label creation, shipping) and officially takes ownership of goods, but they give the seller well less than 50% of the selling price, I think in many cases only about 30%, and interestingly they treat the commission as what they seller gets, not what The RealReal gets. It feels like the flipped everything around.
Poshmark on the other hand seems only to keep about 20%, and they treat the commission as what they are getting on the sale. That feels to me more like what I would expect for this type of service.
Why would anyone sell a high value item on The RealReal if they will get hundreds if not thousands of dollars less than if they sell it on another site like Poshmark? I mean, doing the photos and the other things I mentioned takes a little time, but not so much time that the savings wouldn't be worth the time spent, especially for a higher ticket item.
Is there something I'm missing?
Is there something I'm missing?
Yes, the detail in The RealReal's commission structure. 40%-85% depending on resale value of the item and dollar throughput of the seller. They basically want to make $100 per item minimum. As for Poshmark, it's hard to tell as their commission structure is not made obvious. For that and its cheap presentation, it wouldn't be my first choice of commission agents.
posted by Thella at 2:17 AM on November 4, 2019 [2 favorites]
Yes, the detail in The RealReal's commission structure. 40%-85% depending on resale value of the item and dollar throughput of the seller. They basically want to make $100 per item minimum. As for Poshmark, it's hard to tell as their commission structure is not made obvious. For that and its cheap presentation, it wouldn't be my first choice of commission agents.
posted by Thella at 2:17 AM on November 4, 2019 [2 favorites]
TheRealReal is also positioned at a higher price point than Poshmark and caters for a different audience. If you want to sell your Gucci bag you’re better off going to TRR because there’s a better chance of selling it at a higher price. TRR tries to position themselves as a resale market for high end and often talk about their authenticity measures. They use their in house expertise to present, place, price, and market their products so you have to pay towards that. They do paid advertising to drive traffic to product.
Poshmark is more like eBay (without the bidding) for fashion. As a seller, you’re mainly on your own to photograph, set a price, and sell. It’s actually really hard to stand out and have your product be seen. Especially a high value item, as you’d have to prove it wasn’t a fake either or establish your credibility. If you’re some no name seller (vs having some sort of following as an influencer on Instagram for example) this is incredibly hard to do. You could sell a pair of new Nike’s maybe. But a Gucci handbag? Very hard.
posted by like_neon at 2:32 AM on November 4, 2019 [6 favorites]
Poshmark is more like eBay (without the bidding) for fashion. As a seller, you’re mainly on your own to photograph, set a price, and sell. It’s actually really hard to stand out and have your product be seen. Especially a high value item, as you’d have to prove it wasn’t a fake either or establish your credibility. If you’re some no name seller (vs having some sort of following as an influencer on Instagram for example) this is incredibly hard to do. You could sell a pair of new Nike’s maybe. But a Gucci handbag? Very hard.
posted by like_neon at 2:32 AM on November 4, 2019 [6 favorites]
As a buyer, I’ve bought things on Poshmark I was pretty sure would be counterfeit given the price point and was pleasantly surprised to have just found a good deal. The RealReal has its problems but I worry about that a lot less and would have some sort of recourse (maybe I would with poshmark too but it seems a lot more complicated having received things directly from the seller; The RealReal claims to authenticate things).
As a seller I like that I can just send a box of things to
The RealReal and my job is done; I don’t have time or the interest in photographing and shipping myself.
posted by jeweled accumulation at 6:37 AM on November 4, 2019 [1 favorite]
As a seller I like that I can just send a box of things to
The RealReal and my job is done; I don’t have time or the interest in photographing and shipping myself.
posted by jeweled accumulation at 6:37 AM on November 4, 2019 [1 favorite]
My mother (65) has shopped The Real Real for some years now, since it “feels” more like shopping a normal storefront than the bargain hunting experience of Poshmark. Given that she is highly familiar with the site and feels safe, sending them clothes for commission was a natural progression.
They’ve set it up as if you’re just getting rid of things, but you 1) get money for them, unlike a thrift store and 2) there’s a sense of “high end only” where the consumer-seller can feel elevated that their clothes were correctly fashionable, again unlike a self directed thrifting site where there’s a variety of quality.
Time is a real factor, as far as “put it in the box and away it goes” and they’ve managed to link that ease with a similar experience to high-end shopping. Getting any money at all for that ease and emotional connection, for clothes which may have high tag prices but are functionally worthless to the consumer (can’t be returned nor worn/used by them in particular), just solidifies the feelings of success.
posted by zinful at 8:07 AM on November 4, 2019 [1 favorite]
They’ve set it up as if you’re just getting rid of things, but you 1) get money for them, unlike a thrift store and 2) there’s a sense of “high end only” where the consumer-seller can feel elevated that their clothes were correctly fashionable, again unlike a self directed thrifting site where there’s a variety of quality.
Time is a real factor, as far as “put it in the box and away it goes” and they’ve managed to link that ease with a similar experience to high-end shopping. Getting any money at all for that ease and emotional connection, for clothes which may have high tag prices but are functionally worthless to the consumer (can’t be returned nor worn/used by them in particular), just solidifies the feelings of success.
posted by zinful at 8:07 AM on November 4, 2019 [1 favorite]
I have sold a bunch of stuff on the Real Real and it's so much easier than Poshmark - it's worth it to not have to take care of taking pictures, doing the description, and handling the shipping. They send you a box (or in some cases come to your apartment) and do the rest.
You also earn a higher % of the sale as you consign more with them, and there is a different rate for really high end stuff like Cartier or Rolex watches.
posted by elvissa at 8:13 AM on November 4, 2019
You also earn a higher % of the sale as you consign more with them, and there is a different rate for really high end stuff like Cartier or Rolex watches.
posted by elvissa at 8:13 AM on November 4, 2019
Commissions like that are quite common for clothing consignment - I've only dealt with menswear, but a 60/40 split in favour of the consignment service is pretty standard. On top of that, shipping to the buyer often comes out of the 40%, and the success fee comes off before the split. E.g. if they sell something of mine on ebay for $100, shipping to the purchaser is $10, and Ebay fee is $15, my split would be (100-15)*0.4 - 10 = $24.
Also realize that even if the consignee sells that item for $100, you wouldn't necessarily be able to do the same. They have a developed customer list, do any advertising (or in the case of the real real, own the market that buyers have to use!), take better pictures, etc.
Another huge benefit (that accrues over time for people who sell a lot of stuff) is not having to deal with the buyers. I've had things listed for sale for months, dealing with requests for more pictures, more measurements, shipping prices to weird places, and the usual array of low ball offers and attempted scams. Then there's disgruntled buyers wanting returns, failing to pay, etc. This all gets dealt with by the consignee.
posted by Jobst at 8:42 AM on November 4, 2019 [4 favorites]
Also realize that even if the consignee sells that item for $100, you wouldn't necessarily be able to do the same. They have a developed customer list, do any advertising (or in the case of the real real, own the market that buyers have to use!), take better pictures, etc.
Another huge benefit (that accrues over time for people who sell a lot of stuff) is not having to deal with the buyers. I've had things listed for sale for months, dealing with requests for more pictures, more measurements, shipping prices to weird places, and the usual array of low ball offers and attempted scams. Then there's disgruntled buyers wanting returns, failing to pay, etc. This all gets dealt with by the consignee.
posted by Jobst at 8:42 AM on November 4, 2019 [4 favorites]
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posted by fshgrl at 12:44 AM on November 4, 2019 [1 favorite]