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How The Real Real is Transforming the Fashion Industry

The concept of consignment is not a new one: it’s better for the wallet, the environment, and the fashion industry. From Goodwill to Buffalo Exchange, businesses have thrived on selling used clothes. In fact, it continues to grow: the resale industry in the U.S. has an annual revenue of approximately $17.5 billion.

However, The Real Real has taken it to a whole new level with its wide variety of high-end luxury consignment pieces. Taking advantage of what is now coined “Recommerce” and generous selling policies, The Real Real has continued to expand its reach. Between going public last year and breaking ground on a flagship store in San Francisco, the company continues to grow to new heights.

Here’s everything you need to know about the future of the fashion industry, The Real Real.

How The Real Real Got Its Start

The thrill of a good find was instilled in Julia Wainwright from an early age. She recalls that her father would sometimes go digging at the dump to find items he could use and refashion. He owned an art-and-design business in Indiana, and both of her parents taught her the art of reusing things to make them new again.

After graduating from Purdue, Wainwright decided to join the retail industry. Her first job was at Clorox, but she quickly decided that e-commerce was where she wanted to be. She ran a few successful e-commerce sites, including, but it did not survive the Internet bubble that popped in 2000.

About ten years later, in 2010, Julie decided that it was time to try her hand at e-commerce again. However, this time she decided to try combining her passion for luxury and making old things new again. She realized that luxury items were an underutilized market in e-commerce and decided to sell high-end items only.

Her timing was impeccable. Typical consignment shops are limited in what they can sell and who will buy. By taking her shop online, she was able to reach and sell to a wide range of people. She called friends, stylists, and researched pawnshops to find the best way to get inventory. While eBay had been the first to make consignment popular, the platform was difficult to navigate for users looking for specific items. The Real Real offered everything they needed in one convenient spot.

After two months, Julie had an extensive collection she was ready to take online and opened The Real Real in 2011. However, she was not prepared for the onslaught of customers The Real Real received. She was quickly running out of inventory and wasn’t sure where to turn to next. Thankfully, she got a call from a stylist just in time with a client that had items to sell. She found nine hundred articles of clothing and had to get a U-Haul to take the clothes and shoes. While the clothes were in small sizes, mostly size 2, the shoes were in a more standard size 7.

After that, the business took off with both buyers and sellers, often at the same time.

How The Real Real Operates

Julie knew that to sell high-end goods, she needed to make not only buying the clothes a luxury experience, but selling needed to be tempting as well. She made the process as simple as possible to encourage sellers to send in their clothes.

Sellers have the option of mailing in their clothes or having a “luxury manager” come to their home to pick up the clothes for them. There are 180 managers that travel around the country and help sellers unload their goods. Some of them have established relationships with regular sellers and visit them monthly at times.

Selling managers not only have relationships with current sellers but go out of their way to track down sellers of their own. Managers are known to approach well-dressed individuals in public and convince them to sell their goods. For sellers, they typically receive anywhere from 40-85% of the price when the item sells, although some items are available for a straight sell. This is more profitable than the typical consignment, which buys clothes for a fraction of what they sell them.

They also visit estates after the passing of loved ones and help them unload unwanted goods from their home at a much better price point than liquidators. As a result, they have expanded their offerings to also include high-end home goods with high-end paintings and sculptures. In their stores, everything is for sale, including lighting fixtures and the sales desk itself. Their website quickly replaces anything sold in the stores.

With their convenience and high pay-out, The Real Real has managed to overcome the passivity of high-end sellers who otherwise have no motivation to sell their luxury goods. A steady stream of sellers is just as critical for the health of a consignment business as the customers they bring in.

The Real Real’s Unstoppable Growth

Websites like The Real Real are an answer to the ecological disaster of the so-called “fast-fashion.” The Real Real touts itself as “A Sustainably Luxury Company.” It developed a sustainability calculator that lets customers know how much water and driving miles were saved by purchasing consignment.

The Real Real’s tactics have paid off. They became the first consignment store to go public in June of 2019. They also continue to open up brick-and-mortar stores, successfully navigating what would otherwise be tricky: selling the same item online and in the store. Currently, they put clothes on hold online when a customer is trying on the piece in the store.

They have three stores at the moment: two in New York and one in Los Angeles. They are currently building a two-level store at the former luxury Hermes. Customers will be able to drop off their items for authentication and resale, and the store will offer clothing, shoes, and accessories. They will even have a coffee shop in the store, CafeCafe. The company plans on opening the store in early spring.

The Real Real now ships over 20,000 luxury items per month and has more than 2,000 workers. It continues to grow and leaps and bounds, and we can’t wait to see where it is going next.