4 ms·

Not trying to be a downer, but how are you an interesting company to invest in when your entire opportunity, if you take 100% of the market, is $5M/year?

by wellboy 13y ago

beambot 13y ago
Our MVP launched with just 3 of the hottest brands, which had that level of transactions on eBay alone. Across all women's fashion brands and all designer resale, there are roughly $100B in transactions per year (see the Demo Day video at the link). Start small and grow outward. ;)
- deleted 13y ago
  [deleted]
- wellboy 13y ago
  Ah ok, got it :)
- 7Figures2Commas 13y ago
  Is there a reason you want/need to be the commerce platform on which these resale transactions take place? Two-sided markets are generally more difficult to crack, and displacing eBay in particular is going to be challenging. I'd expect your cost of customer acquisition to grow quite significantly once you've tapped out the low hanging fruit. If your core competency is your ability to detect counterfeits, however, maybe there's an opportunity to convince legitimate vendors to pay you to certify that their items are authentic, something that they then promote to prospective customers in all of their sales channels. You'd probably need to offer a buyer money-back guarantee for this model to be viable, but if you did this, you could try tying your pricing to the vendor's sales price (i.e. it costs more to certify a handbag being resold for $750 than a dress being resold for $250). If you're wedded to the idea of running your own commerce platform, you could provide vendors that certify their goods with you a free listing on your site, and reimburse the certification fee from the sales commission if their product sells through you. By getting listings this way, you can avoid some of the questions you're bound to be asked if your only proposition is that you're an eBay competitor (think "How many sales do you generate a month?"). And you avoid having to grow your buyer base to make money.
7Figures2Commas 13y ago
Not trying to be even more of a downer, but top-down market sizing is almost always off by significant orders of magnitude. It's great to say that the total size of a market is, on paper, $77 million (or $100 billion). But not only does this fail to reveal how much of it is realistically addressable, the overall number itself is more easily overestimated than underestimated. I'm not saying that Lollipuff is a bad idea, or can't be successful, but one thing to note is that a lot of individuals who buy fake luxury goods do so knowingly.[1] There are various reasons for this. For many, the real product is too expensive. For others, a counterfeit purchase is based on the recognition that an average person can't tell a decent knock-off from an authentic item (so why pay full price to impress friends and passers-by if you don't need to?). Some opt to buy counterfeit items for "everyday use." Net-net: a not insignificant number of the counterfeit sales are intentional transactions. Lollipuff's real market consists of women who want to purchase authentic (used?) luxury items online and who can afford them and who are sufficiently concerned about counterfeits and who seek out alternative purchasing channels to address this concern. Is this a large enough market, and will Lollipuff be able to capture enough of it to have a viable business? I don't know, but I do know that taking the total value of online resales for certain product categories and brands and using those to size the market will produce market size figures that are way too large to be considered realistic. [1] http://www.reuters.com/article/2013/01/08/us-usa-counterfeit-knockoffs-idUSBRE9070YS20130108 http://www.reuters.com/article/2013/01/08/us-usa-counterfeit...
- beambot 13y ago
  Fantastic comment! Allow me to weigh in with two thoughts... (1) Our numbers are based on authentic designer resale. We don't have anything against people knowingly buying knockoffs. Better still, there's an entire new industry in fashion for building "clone" items under a new brand. The real problem arises when people unknowingly get duped. It's like buying a "Aple" computer that epicly fails in 6 months of use. (2) The irony of designer resale is that you can get a pre-owned, lightly used designer item for approximately the same price as an off brand... and yet the quality will be better and it will last longer. Our CEO is notoriously frugal -- that's actually how she got started in the field.

Not trying to be a downer, but how are you an interesting company to invest in when your entire opportunity, if you take 100% of the market, is $5M/year?

by wellboy 13y ago

Not trying to be a downer, but how are you an interesting company to invest in when your entire opportunity, if you take 100% of the market, is $5M/year?

beambot 13y ago

Our MVP launched with just 3 of the hottest brands, which had that level of transactions on eBay alone. Across all women's fashion brands and all designer resale, there are roughly $100B in transactions per year (see the Demo Day video at the link). Start small and grow outward. ;)

deleted 13y ago
[deleted]
wellboy 13y ago
Ah ok, got it :)
7Figures2Commas 13y ago
Is there a reason you want/need to be the commerce platform on which these resale transactions take place? Two-sided markets are generally more difficult to crack, and displacing eBay in particular is going to be challenging. I'd expect your cost of customer acquisition to grow quite significantly once you've tapped out the low hanging fruit. If your core competency is your ability to detect counterfeits, however, maybe there's an opportunity to convince legitimate vendors to pay you to certify that their items are authentic, something that they then promote to prospective customers in all of their sales channels. You'd probably need to offer a buyer money-back guarantee for this model to be viable, but if you did this, you could try tying your pricing to the vendor's sales price (i.e. it costs more to certify a handbag being resold for $750 than a dress being resold for $250). If you're wedded to the idea of running your own commerce platform, you could provide vendors that certify their goods with you a free listing on your site, and reimburse the certification fee from the sales commission if their product sells through you. By getting listings this way, you can avoid some of the questions you're bound to be asked if your only proposition is that you're an eBay competitor (think "How many sales do you generate a month?"). And you avoid having to grow your buyer base to make money.

7Figures2Commas 13y ago

Not trying to be even more of a downer, but top-down market sizing is almost always off by significant orders of magnitude. It's great to say that the total size of a market is, on paper, $77 million (or $100 billion). But not only does this fail to reveal how much of it is realistically addressable, the overall number itself is more easily overestimated than underestimated. I'm not saying that Lollipuff is a bad idea, or can't be successful, but one thing to note is that a lot of individuals who buy fake luxury goods do so knowingly.[1] There are various reasons for this. For many, the real product is too expensive. For others, a counterfeit purchase is based on the recognition that an average person can't tell a decent knock-off from an authentic item (so why pay full price to impress friends and passers-by if you don't need to?). Some opt to buy counterfeit items for "everyday use." Net-net: a not insignificant number of the counterfeit sales are intentional transactions. Lollipuff's real market consists of women who want to purchase authentic (used?) luxury items online and who can afford them and who are sufficiently concerned about counterfeits and who seek out alternative purchasing channels to address this concern. Is this a large enough market, and will Lollipuff be able to capture enough of it to have a viable business? I don't know, but I do know that taking the total value of online resales for certain product categories and brands and using those to size the market will produce market size figures that are way too large to be considered realistic. [1] http://www.reuters.com/article/2013/01/08/us-usa-counterfeit-knockoffs-idUSBRE9070YS20130108 http://www.reuters.com/article/2013/01/08/us-usa-counterfeit...

beambot 13y ago
Fantastic comment! Allow me to weigh in with two thoughts... (1) Our numbers are based on authentic designer resale. We don't have anything against people knowingly buying knockoffs. Better still, there's an entire new industry in fashion for building "clone" items under a new brand. The real problem arises when people unknowingly get duped. It's like buying a "Aple" computer that epicly fails in 6 months of use. (2) The irony of designer resale is that you can get a pre-owned, lightly used designer item for approximately the same price as an off brand... and yet the quality will be better and it will last longer. Our CEO is notoriously frugal -- that's actually how she got started in the field.