Today Closet Cash, Corp. (ClosetCash.com) announced the launch of the first online luxury consignment marketplace to offer a groundbreaking 90% back to its consignors and introduce practices that protect the commission rates of consignors and customers.
Luxury consignment is one of the hottest emerging markets, introducing a sustainable life cycle in fashion: buy-wear-resell. It is also resilient to the economic downturn that has impacted retail since the onset of Covid-19, and with a growing market-share, Wall Street is taking note that not just Millennials enjoy consignment as sustainable fashion, but so do their Gen X parents.
While luxury consignment is here to stay, leading consignment marketplaces, take advantage of their customers: many consignors expect at least a 50-50 split but now get a fraction of this amount on most items they sell to companies like The Real Real. These marketplaces use misleading language to entice potential consignors with the promise of 85% payout; however, the actual payout percentage after consigning averages 25%. This dramatic decrease in payouts are accomplished by: 1) “rolling” commission rates that lower payouts to consignors; 2) offsetting promo codes on to the consignor; 3) rate drops unless consignors sell thousands of dollars worth of product; and 4) through taxing their consignors by claiming them as independent contractors. This results in a tax write off for the company and a much lower payout for the consignor. Most consignment items are sold for less than what they were originally purchased, resulting in a capital loss. A capitol loss is not taxable income, so consignors should not be 1099’d and forced to pay taxes on items they sold to consignment companies for less than what they purchased them initially.
MTV star, producer, and real estate developer, Heather Naylor, took notice and founded Closet Cash, the first luxury consignment platform to guarantee consignors 90% payouts on their luxury goods. “As a lifetime buyer and lover of consignment fashion, over the years I noticed that when I sold to consignment stores, my percentages got smaller and smaller until I ended up actually losing money,” says Naylor. “Our goal at Closet Cash is to not only contribute to the sustainable life cycle of consignment fashion, but also offer better and totally transparent payback percentages to the customers who trust us, and hopefully inspire other consignment platforms to do better.”
About Closet Cash
Closet Cash (ClosetCash.com) is a female-powered luxury consignment marketplace based in Los Angeles, that puts consignors and customers first through transparent pricing and practices. Discover us on closetcash.com and via the Closet Cash app (available on the Apple Store and Google Play), where we ship nation-wide and internationally. Follow us on Instagram and Facebook at @ClosetCashOfficial.
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