Making money by selling old clothes pays off for Tradesy

SANTA MONICA, Calif. — Just a few years ago, Tracy DiNunzio was selling used wedding dresses from her bedroom.

Now, her company has progressed to women's fashions for any occasion, and it's worth more than $100 million.

DiNunzio is ready to take on the world.

Her Tradesy.com has signed up more than 3 million women who use the site to sell their unwanted fashions from the closet and on any given day has $300 million worth of merchandise being offered for sale.

"As women, we get advertised to a lot, our bodies change, our tastes change...and that necessitates a pretty hefty investment if we want to update our wardrobe," she says. "That didn't seem fair to me. We should have access to the things that make us look and feel great without getting into debt."

Major investors agreed with her. She's got venture capital firm Kleiner Perkins Caufield & Byers (Google, Facebook) on her side, along with aviation giant Sir Richard Branson, author/podcaster Tim Ferris and L.A.'s Eva Ho. In total, she's raised $48 million, for a valuation of "well over" $100 million. The company grew 650% in 2014.

"She's selling the future of convenience," says Ho, who is an angel investor in Tradesy. "How do we move goods, and sell in an easier way? EBay was generation 1.0, a used marketplace. Tracy started with fashion, which makes a lot of sense, but her future vision is a lot more."

Today, it's just women's clothing that's getting re-sold via the web. In a few months, Tradesy will expand to men's, and after that, baby's and kids.

For now, DiNunzio has greatly simplified the selling process for women. Snap a few photos on your smartphone, add a description and price, and Tradesy says you'll have your listing up within 60 seconds.

The company takes a 9% commission, but only after the item sells.

This is different from, say, trying to sell on eBay, because the auction/resale site "covers 14 major categories, and it's not as tailored to the fashion experience as we are," she says.

Tradesy re-sells closet stuff and higher-end fashions--designer bags from Louis Vuitton and Chanel, shoes by Tory Burch and Prada. Women who are really serious about re-selling old fashions can make really good money via Tradesy.

"Our average individual woman makes a little over $1,000 a year," she says. Put everything you've got into it -- and DiNunzio points to a woman who is just shy of $1 million. "They have a network of friends, from whom they are collecting from and selling."

DiNunzio is a former artist who started her online resale business (as Recycled Bride) with $28,000 by renting out a room in her house via Airbnb. She started blogging about weddings and women's fashions and met investors through tech conferences and the LaunchpadLA incubator.

DiNunzio has an "unusual" background for running a huge business but "picks up things really fast," says former eBay exec Stephanie Tilenius, who sits on the Tradesy board of directors. "She's a fast learner, incredibly creative and dynamic and is always trying to raise the bar for her team."

The Tradesy offices here are in the heart of Santa Monica's busy shopping district, with the usual mix of web developers behind giant iMac computers, dogs running free and food for all in the kitchen -- which on this day was barbecue. DiNunzio's art doesn't hang on the wall, but she did bring in the furnishings from the apartment that gave birth to the company, including the kitchen table and couch.

Unlike most tech start-ups, the closets here are full of clothing on hangers -- this is where the returns (didn't want, didn't fit) come back, for Tradesy to try to re-sell.

In 2012, now as Tradesy, the big money found her, when she got a $1.5 million investment from Rincon Venture Partners. She chose Kleiner Perkins -- the firm currently in the middle of a high profile sex bias trial in San Francisco -- to lead a fund-raising round, ($13 million, than $30 million) and was introduced to Branson via the firm.

(She says she saw no signs of sex bias in her dealings with Kleiner Perkins.)

The female led company has 45 men and 45 women -- way more diverse than most tech companies, with a staff that's 23% minority (Latino and African American). This compares to 5% (Latino and African American) at Google and 18% for Apple.
DiNunzio says her trick for finding a more diverse staff is not just focusing on Ivy league grads.

"I love people who are self taught," she says. "Our founding team does not come from typical Silicon Valley background. We like to have diversity of opinion and point of view. A more diverse management team performs better."