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I’d be interested in reading about how Depop did what dozens of other startups have tried to do: build a giant business around the used clothes market.

subpixel 5y ago
I found it. “But the real secret to Depop’s success is that it allows users to amass two of the most valuable modern currencies: money and clout. Becoming a top seller on Depop is a springboard to fame on YouTube or Instagram. It also provides built-in monetization for a future career as an influencer.”
Nextgrid 5y ago
I don’t think Depop did anything special per-se. It’s a combination of luck and the right investors bankrolling it for ages. It is a very marketing-heavy operation, as the platform itself doesn’t offer that great of a deal to sellers - they charge a 10% commission plus payment processing fees (PayPal takes 2%, though now I believe there’s an option to use a different processor), so high-volume sellers are unlikely to use it. I wouldn’t be surprised if up until this day they were spending more on marketing that they would’ve made back from most customers. The business itself is quite low-margin (support & fraud/scams cuts into that), has decent competition (Mercari, StockX) and can be trivially replicated by the likes of Facebook (Depop is basically an Instagram but where you can buy & sell - something FB can trivially replicate if they wanted to). It makes sense for Etsy to buy it for access to the userbase and to integrate it into their existing business, but as a stand-alone business it's not that great IMO because of the aforementioned points.
- weird-eye-issue 5y ago
  "a combination of luck and the right investors" I don't think that would be fair and that it is 100% likely there was a great deal of deliberate strategy involved as well.
  - Nextgrid 5y ago
    My point is that I believe the strategy was a very risky bet (way too risky in my opinion, but then again I'm not a startup CEO for a reason). This is a very marketing-heavy operation that I don't think could stand on its own and be sustainable, and so the only possible outcome is to stay afloat long enough (by reinvesting a significant chunk of revenue into more marketing) to get gobbled up by a bigger fish. They had the right investors that believed in it and bankrolled it for long enough and it paid off, but it's ultimately still a stroke of luck IMO.
- yaitsyaboi 5y ago
  I doubt FB could replicate this. Fb itself is a non-starter the people who use this app haven't been on Fb in years. Okay, so Instagram. If they could, they would’ve. I think there are problems with making Instagram seem tacky by clobbering on a marketplace. It would make it look cheap and shilly. Right now it’s the most rarified space to share pictures of your awesome lifestyle. I think you can either have that very cool, chic vibe or the amazon marketplace vibe. I think that despite their enormous resources, there are places that brands can’t go.
  - alex_g 5y ago
    Instagram already has marketplace features, and personally it lost its rarified space vibes to me a long time ago.
FlyingSaucer 5y ago
Depop isn't alone in this, Vinted[1] has a current valuation of $4.5B and is hugely popular in Belgium, Netherlands and France (maybe more places, but those i can definitely say). In both platforms there is influencer-heavy marketing. Many fashion influencers(i really dislike this term, but it is the nomenclature) sell clothes that they wore very little in Instagram advertisements. This is a great business model for them, people follow them more tightly because they are actually able to buy for (mostly) affordable prices some of the clothes they see in pictures and they also get some additional under-the-radar cash. [1] : https://www.vinted.com/ https://www.vinted.com/
- matsemann 5y ago
  In Scandinavia I think Tise is similar. For purchasing used clothing and stuff, but the listing is more akin to Instagram than on a normal listing site. You follow people with a style you like and buy their stuff, and then sell it on. https://tise.com/ https://tise.com/
- sweeneyrod 5y ago
  It's interesting that they have a much higher valuation (and from some cursory research, moderately more users) than Depop, despite (AFAIK) being completely obscure in the US/UK.
andrewingram 5y ago
They also doubled-down on it. They flirted with branching out into other markets and demographics but it didn't really stick. There was a bit of luck in getting their initial traction (they were definitely not prepared for the growth spurt and spent years getting to the point that the backend wasn't just falling over constantly), but they executed really well on capturing their core market.
colinmhayes 5y ago
Depop is more similar to instagram than a resale site. It has influencers and a "for you" page.
jasonladuke0311 5y ago
Don't be like Grailed is a good start. Can't believe how badly that site has managed to snatch defeat from the jaws of victory.

subpixel 5y ago

I found it. “But the real secret to Depop’s success is that it allows users to amass two of the most valuable modern currencies: money and clout. Becoming a top seller on Depop is a springboard to fame on YouTube or Instagram. It also provides built-in monetization for a future career as an influencer.”

Nextgrid 5y ago

I don’t think Depop did anything special per-se. It’s a combination of luck and the right investors bankrolling it for ages. It is a very marketing-heavy operation, as the platform itself doesn’t offer that great of a deal to sellers - they charge a 10% commission plus payment processing fees (PayPal takes 2%, though now I believe there’s an option to use a different processor), so high-volume sellers are unlikely to use it. I wouldn’t be surprised if up until this day they were spending more on marketing that they would’ve made back from most customers. The business itself is quite low-margin (support & fraud/scams cuts into that), has decent competition (Mercari, StockX) and can be trivially replicated by the likes of Facebook (Depop is basically an Instagram but where you can buy & sell - something FB can trivially replicate if they wanted to). It makes sense for Etsy to buy it for access to the userbase and to integrate it into their existing business, but as a stand-alone business it's not that great IMO because of the aforementioned points.

weird-eye-issue 5y ago
"a combination of luck and the right investors" I don't think that would be fair and that it is 100% likely there was a great deal of deliberate strategy involved as well.
- Nextgrid 5y ago
  My point is that I believe the strategy was a very risky bet (way too risky in my opinion, but then again I'm not a startup CEO for a reason). This is a very marketing-heavy operation that I don't think could stand on its own and be sustainable, and so the only possible outcome is to stay afloat long enough (by reinvesting a significant chunk of revenue into more marketing) to get gobbled up by a bigger fish. They had the right investors that believed in it and bankrolled it for long enough and it paid off, but it's ultimately still a stroke of luck IMO.
yaitsyaboi 5y ago
I doubt FB could replicate this. Fb itself is a non-starter the people who use this app haven't been on Fb in years. Okay, so Instagram. If they could, they would’ve. I think there are problems with making Instagram seem tacky by clobbering on a marketplace. It would make it look cheap and shilly. Right now it’s the most rarified space to share pictures of your awesome lifestyle. I think you can either have that very cool, chic vibe or the amazon marketplace vibe. I think that despite their enormous resources, there are places that brands can’t go.
- alex_g 5y ago
  Instagram already has marketplace features, and personally it lost its rarified space vibes to me a long time ago.

FlyingSaucer 5y ago

Depop isn't alone in this, Vinted[1] has a current valuation of $4.5B and is hugely popular in Belgium, Netherlands and France (maybe more places, but those i can definitely say). In both platforms there is influencer-heavy marketing. Many fashion influencers(i really dislike this term, but it is the nomenclature) sell clothes that they wore very little in Instagram advertisements. This is a great business model for them, people follow them more tightly because they are actually able to buy for (mostly) affordable prices some of the clothes they see in pictures and they also get some additional under-the-radar cash. [1] : https://www.vinted.com/ https://www.vinted.com/

matsemann 5y ago
In Scandinavia I think Tise is similar. For purchasing used clothing and stuff, but the listing is more akin to Instagram than on a normal listing site. You follow people with a style you like and buy their stuff, and then sell it on. https://tise.com/ https://tise.com/
sweeneyrod 5y ago
It's interesting that they have a much higher valuation (and from some cursory research, moderately more users) than Depop, despite (AFAIK) being completely obscure in the US/UK.

andrewingram 5y ago

They also doubled-down on it. They flirted with branching out into other markets and demographics but it didn't really stick. There was a bit of luck in getting their initial traction (they were definitely not prepared for the growth spurt and spent years getting to the point that the backend wasn't just falling over constantly), but they executed really well on capturing their core market.

colinmhayes 5y ago

Depop is more similar to instagram than a resale site. It has influencers and a "for you" page.

jasonladuke0311 5y ago

Don't be like Grailed is a good start. Can't believe how badly that site has managed to snatch defeat from the jaws of victory.