When Max Bittner, former CEO of e-commerce company Lazada Group, was appointed CEO of French luxury resale platform Vestiaire Collective, one of his first priorities was changing the company’s commission structure to lower the percentage that the company takes from all sales, dropping them by an average of 10% across the company’s various price brackets. For Bittner, it was the first step in his overarching vision for the company, which will see Vestiaire Collective focusing on audience growth above all else.
“One of the first projects I decided to launch when I joined Vestiaire Collective was to reduce [our] commission across the catalog,” Bittner said. “By looking at our internal data, we believed this to be the optimal number to entice more sellers, knowing they will be able to sell at a faster rate while continuing to make a profit, and also offer buyers the pieces they desire at an attractive price.”
Since the change was made in April, Bittner said that sales have tripled on items in the lower price-point range, which he predicted would be most positively affected by the shift. Prices across the board for buyers also dropped as part of the change.
Under the current commission model, Vestiaire Collectivetakes 25% of the sale price for anything between $170 and $2,300, with the percentage decreasing with pricier items, and a flat 17% for anything below $170. Comparing this structure to other resellers is tricky, since they each have different price brackets, different rates for different items and loyalty programs that make the percentage fluctuate, but The RealReal takes 60% of the sale price of anything below $145. Poshmark, working typically in a lower price range than The RealReal or Vestiaire Collective, takes a flat fee of $2.95 for anything under $15 and 20% of anything sold over $15. StockX takes 10%, which goes lower for repeat sellers, and Crossroads Trading takes 50%.
Vestiaire Collective currently has 8 million members across its free membership and its Premium membership program, which grants premium seller status among other perks for a monthly fee, while The RealReal had 9 million members as of the end of last year — you must register as a member to buy, sell or browse The RealReal.
The last nine months, since Bittner joined Vestiaire Collective, have been busy for the company. Many of the new projects have been focused on lowering the barrier to entry into the Vestiaire Collective community and making the process of buying and selling as simple as possible.
In addition to lowering commission costs, just last month, Vestiaire Collective introduced a direct shipping option in Europe, soon to be expanded globally. It allows buyers to forego the authentication process, which requires them to ship items to Vestiaire Collective and tacks more time onto the selling process. Instead, for orders under €200, or $220, they send products straight to the buyer. Simultaneously, Vestiaire Collective also launched Circularity Collabs, which lets customers receive store credit from French fashion brands including Sandro and BaSh when they sell clothes from those brands on Vestiaire Collective.
All these new efforts, coinciding with Vestiaire Collective’s 10th year of business, are geared toward driving up the company’s daily active users on its mobile app. A representative from Vestiaire Collective said the company wants customers browsing the app and using it almost like a social network, beyond just buying and selling. In the past, Vestiaire Collective has driven downloads for its app by offering discounts and promo codes only available to app users.
“One of the key focuses is to continue to drive engagement and discoverability for our members,” Bittner said. “In order to further drive this, we’ll be launching a series of exciting community functions that will empower our members to engage with each other and the platform in a much more powerful way. Tech innovation, engagement, personalization and discoverability are all priorities as we move toward becoming an app-first, community-driven platform.”
In addition, Bittner said Vestiaire Collective is focusing on further global expansion, especially within Asia, an area where he sees a lot of promise, even though resale is relatively new there. Already, the company has offices across Europe, North America and Asia, and sells in dozens of countries.
Since Vestiaire Collective was founded, fashion resale has grown by a significant margin. Companies like The RealReal and the flood of sneaker and streetwear resale platforms have all made the idea of buying pre-owned luxury goods from a trusted platform mainstream. But as the market gets more crowded, Vestiaire Collective, like many resellers in the space, needs to compete for both buyers’ and sellers’ attention.
“Especially in the luxury industry, it’s harder to find sellers than buyers,” said Charles Gorra, founder of Rebag, another luxury resale platform that has similarly been focused on driving up audience growth. “How do you convince someone to execute on selling something they own? There are a lot of mental hurdles to that, so it’s important to make the selling process appealing and easy.”
Bittner is confident in Vestiaire Collective’s ability to serve customers over the long term, both by taking lower commissions and by providing more options for buyers, but the real challenge is getting customers on board in the first place. As resale continues to grow larger and therefore more competitive, Vestiaire Collective is banking on its recent efforts to grow its audience.
“When I joined the company earlier this year, Vestiaire Collective already had a strong brand and fashion DNA,” Bittner said. “What makes it unique to many other resale platforms is that members have built a strong connection with each other and the products they are searching for. Our priority right now is to empower this global community to be able to interact and engage further on a daily basis through tech innovation.”