Tradesy, an online marketplace for fashion purchases and resale, is shutting down. The company confirmed to customers on May 12th that it will officially cease its operations on June 30th. Tradesy had originally launched in 2012 and the shutdown has left many returning users shocked and disappointed. This closing of an up to date online retail platform will alter thousands of people’s buying and selling experience depending on the website for their dealings.
For those who have used Tradesy to either buy or sell, this closure affects them differently but notably. In this article we discuss how shareholders, buyers and sellers can beat the impact of Tradesy’s shutdown. We break down how it affects existing customers’ bank accounts, upcoming buyers looking to purchase something hip and affordable who can no longer do so through the marketplace platform, and those who stand to lose out on monetary investments.
Overview of Tradesy
Tradesy is a platform that enables shoppers to buy and sell quality pre-owned fashion items from designer brands. It was founded in 2012 to create an online marketplace for consignment shopping. Recently, Tradesy announced that it is too close for its parent company, Vestiaire Collective, to focus on its US growth.
The closure of Tradesy affects both its users and the fashion industry. In this article, we will outline an overview of the Tradesy platform and look into the impacts of its closure.
What is Tradesy
Tradesy is an online marketplace for reselling branded clothing and other luxury items. Many fashion-savvy individuals have found success through the site by buying and selling second hand designer pieces to supplement their own wardrobe or make a profit. The platform also has an in-app payment system that makes it easy for buyers and sellers to make transactions securely. However, in 2020, Tradesy announced it would shut down on February 1 due to financial difficulties exacerbated by the COVID-19 pandemic. This affected buyers and sellers as they had to quickly find alternative places to resell or purchase clothing and other luxury items.
Tradesy provided users with many features such as advanced search filters and buyer protection on purchases over USD 500. Buyers could also access a quick response customer service team who responded quickly to questions or requests for returns or refunds. In addition, those with VIP membership could earn money back in rewards points for every purchase made on the platform. One of the most significant draws was Tradesy’s promise of authenticity as all items went through rigorous authentication measures before being listed on their platform – giving customers peace of mind when shopping online for authentic designer pieces worldwide.
How Tradesy works
Tradesy is an online reselling platform for fashion products. Individuals and acts primarily use it as an intermediary between buyers and sellers. Tradesy provides buyers and sellers with payment processing, faster shipping, and theft protection. In addition, the website features automated features to help facilitate cooperation between buyers and sellers, such as a dispute resolution center that helps resolve any terms of service issues or claims the buyer or seller is not satisfied with.
Tradesy makes money by charging fees to both buyers and sellers. If users choose to use Tradesy’s payment processor they must pay a two percent fee (two percent of each item purchased). For shipping through Tradesy’s shipping service, buyers pay a flat fee per item which covers shipping within the United States, re-packaging, handling and insurance. Sellers are charged a commission of up to 19% on items sold via their store, including processing fees, remittances (bank transfers), a service fee (paid directly to the seller), and other costs associated with running the online retail platform.
For each sale made via Tradesy, the company offers its user base loyalty credit rewards through gift cards redeemable on various merchant platforms. This rewarding program was designed to encourage users to return for more purchases and use their rewards points as discounts when shopping with partner merchants or other websites accepting loyalty credit cards as payment method from Tradesy shoppers.
Market size of Tradesy
The online fashion resale market has grown significantly over the past decade and is estimated to be worth over $30 billion worldwide. Tradesy was one of the leading players in this rapidly growing space, with a customer base of more than 15 million users and an estimated annual revenue of up to $125 million. Although this represents a fairly small portion of the global market, Tradesy had been growing at an impressive rate and was widely considered one of the industry’s biggest disruptors.
The company’s reach extended beyond its website and app and included partnerships with major names such as Target, Kohl’s, eBay, Macy’s, TheRealReal, Nordstrom Rack and Poshmark. In addition to these partnerships, Tradesy had a range of services that allowed customers to buy new items or rent them for special occasions such as weddings or proms. They also offered peer-to-peer lending services that enabled customers to borrow items from other members in their community.
Looking at sales trends in the online fashion resale sector before Tradesy’s announcement showed promising figures; between 2019 and 2020 retail sales during peak seasons increased by nearly 32%, likely due partially to an overall increase in second-hand buying habits. It is expected that Tradesy users will experience some amount of disruption as their favorite platform shuts down for good; however this does not mean that the fashion resale market itself is affected by these closures. Many alternative platforms offer similar services— meaning that customers’ needs are unlikely to go unfulfilled despite industry changes like this.
Vestiaire Collective ‘supercharges’ US push by shutting down Tradesy
In July 2020, Tradesy, the marketplace for buying and selling clothes, announced that it would shut down its US operations, handing off its US customers to Vestiaire Collective, a French secondhand shopping site.
As a result of this move, many Tradesy customers may wonder how they will be impacted. So let’s take a closer look at the details.
How will Tradesy users be affected
Tradesy, an online marketplace for used clothing, shoes and accessories is shutting down permanently. The site will remain accessible until June 30th, but will no longer accept new items or sell existing items. As the shutdown goes into effect, many current Tradesy users wonder how this closure will affect them.
The most immediate impact of the Tradesy shutdown is that sellers will no longer be able to list items on the platform or generate income from sales. Tradesy still has inventory in its warehouses; however, buyers can no longer purchase items from the site after June 30th. All orders paid for will still be fulfilled until July 31st, 2021.
For users who currently have listed items on Tradesy that have not sold yet, they may relist their inventory on another platform or return them to inventories with free shipping and handling provided by Tradesy before Oct 1st 2021. However, sellers need to note that any store credit issued from past returns must be used before June 30th as store credit and promotions issued by Tradeys won’t be accepted after this date.
Although this news has certainly disappointed many Tradesy customers and sellers alike, it allows users to explore other options when selling secondhand fashion online. Platforms such as Mercari can offer similar features and services as those found on Tradeys; it is also a good idea for anyone interested in selling clothing online to research more established e-commerce companies like Ebay or Poshmark.
How will Vestiaire Collective benefit from the shutdown
The shutdown of Tradesy will present Vestiaire Collective, a consignment marketplace for buying and selling luxury items, with new growth opportunities. By reducing the number of competitors in the market, Vestiaire Collective may benefit from increased market share of online second hand sales. In addition to gaining access to Tradesy’s user base, which includes more than 10 million shoppers and over 40 million items sold since its launch in 2009, potential subscribers should be drawn to the platform due to its ‘free listings’ feature. Herein, users can post up to 3 items per month without listing fees or commissions.
At the same time, Vestiaire Collective benefits from their trustworthy reputation and commitment to providing ‘excellent customer service’ as noted by their customers on Google reviews. This is further evidenced by their Authenticity Guarantee which also serves as a major differentiator between Vestiaire Collective and other second-hand consignment markets. It is unknown how many users will migrate from Tradesy because of the shutdown. However, if previous trends are anything to go by, shoppers could be more inclined to move towards Tradesy for renewed peace of mind when shopping for pre-loved trends on a reliable platform.
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The shut down of Tradesy by Vestiaire Collective will impact the US market. It is expected to reshuffle the secondhand fashion market, as Tradesy users have to find a new platform to buy and sell their items.
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