Brands Testing Direct Resale But Marketplaces Still Win Because of Convenience

Brands Testing "Direct Resale" But Marketplaces Still Win Because of Convenience

A recent article on the growth of resale to $82B by 2026 got me thinking.

While the stories in the past year or so have been about brands going direct with resale, it still seems to me that the long-term dynamics of marketplaces are unchanged.

With limited inventory supply, and a singular audience, your returns on this program is only going to be so high. Which further limits supply, which depresses your potential audience.

However, there is another opposite force at work: authenticity.

In any sufficiently scaled brand, there is the risk of knock-offs. That risk or even the perception of the risk acts as a depressant on price. Call it "the eBay effect" -- essentially, you may never know 100% if the product you are buying is always authentic, or who the seller is and how they got it, and that can lower the amount you will pay for it.

This doesn't mean that resale isn't a good idea for brands - it is. In the future, I think most high-end brands will offer multi-condition sales -- isn't it better to keep that relationship with the buyer rather than cede it to a marketplace partner? And they may be able to get a premium for it because the buyer knows its authorized. Brand experience is important.

For the general shopper, however there are other things at work. Namely, convenience. Going to a place focused on resale, with a multi-brand portfolio, that potentially already has your credit card on file, gives you a reason to keep coming back.

These are all the well-known benefits of marketplaces, and aren't going anywhere either.

I think there are definitely places for both - what are your thoughts about it? Are brand experience and convenience at odds?