Glynn Davis is one of the UK’s most knowledgeable and experienced retail journalists, founder of Retail Insider, and Ecommerce Age’s monthly columnist…
Visiting the headquarters of The Edit LDN in London’s Shoreditch recently should have been a tad embarrassing as I was wearing my very basic Adidas sneakers (cost price of about £30) but I needn’t have worried because most of the sneakers in the building sit hidden away in their boxes.
The Edit LDN operates an online streetwear marketplace selling rare clothing and accessories along with its core category of sneakers that account for 70% of its revenues. The average price of a trade is around £360, according to Moses Rashid, founder of The Edit LDN, who when guiding me around his offices pointed out a pile of boxes in a secure looking part of the building.
This growing pile represents a new development for the company, which he describes as the young business’s fulfilment centre. Although presently located at the company’s headquarters the plan early next year is for this modest amount of boxes to move to a dedicated space as volumes increase. The new warehouse will have the capacity to house a chunkier 100,000 units.
The proposition is similar to the ‘fulfilment by Amazon’ service that the online giant offers to sellers of goods on its site. They give Amazon their products to hold – for which it charges a storage and delivery fee – and whenever they choose to sell the items they can be despatched immediately using Amazon’s logistics infrastructure.
A key part of the handling process for The Edit LDN involves the authentication of sneakers by the company’s specialists. By storing them within its premises they can be pre-authenticated ahead of a sale and despatch. This holding of goods is not new and is a system used in other areas of commerce involving valuable goods.
In the wine and art worlds items sit in secure warehouses waiting for delivery to a potential new owner or what is more likely is that they don’t ever get delivered they just switch ownership on paper and remain safely in their secure environments. When visiting wine merchant Berry Bros & Rudd I was fascinated to learn that wines are sold between the company’s customers and all that changes are the names on the deeds. Meanwhile BB&R takes a commission from the buyer and seller and continues to receive a fee for storage. It’s nice work if you can get it.
No wonder this looks appealing to other organisations dealing in various product types that are finding themselves as new forms of investment – sneakers being an obvious example. Another such category in the US is baseball trading cards (the things that initially come with a rock hard stick of chewing gum). Ebay has built a trading card vault that safely houses these cards that can be sold for up to a million dollars. Many of the trades in these cards does not involve them moving from the vault.
There is no doubt that trading in second hand items of all descriptions – especially those at the higher-value end of the market – is taking off. Ebay has revealed that what it describes as ‘collectables’ has reached $10 billion per year in value and Cowen Equity Research predicts the market for sneakers and streetwear will grow by an incredible $22 billion by 2030.
We also have an explosion in the number of brands setting up marketplaces and selling second hand products alongside their ranges of new goods. Rolex has just begun selling used watches once it has certified them as being genuine Rolex timepieces. Historically such trades have been undertaken by third-party dealers but today the brands themselves are increasingly looking to bring such activities in-house and onto their own marketplaces.
With the volumes and values of second hand goods both increasing exponentially there is the potential for a growing number of ecommerce players like The Edit LDN and brand owners to embrace the idea of providing a marketplace that encompasses a full-service of authentication, fulfilment and secure storage.