Lollipuff (YC W13) eBay-like Fashion Marketplace without the Fakes | Hacker News Reader

Lollipuff (YC W13) eBay-like Fashion Marketplace without the Fakes

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40 pointsbeambot34 comments

We recently did a survey for Herve Leger (tight bandage dresses) on eBay. According to our experts, greater than 60% of the Herve dresses sold on eBay were fake [1]. Heh, that means eBay profited more on counterfeit Herve Leger than authentic ones.

This sort of thing drives us crazy. We're fighting against the counterfeit epidemic head on. You can only hear so many stories about buyers ending up with a fake $2000 Chanel (often learning that it's fake years later) or sellers getting scammed after selling a legit item (unscrupulous buyers filing fake claims, resulting in loss of both the item and sale money to the seller)...

/Lollipuff co-founder.

[1] https://www.lollipuff.com/blog/41/ebays-counterfeit-epidemic...

>fake $2000 Chanel (often learning that it's fake years later)

If the fake is so similar to the real thing that it's possible to be fooled by it for years, who cares? Who is harmed besides Chanel?

As someone who is familiar with Chanel, the difference is night and day. However, for someone new to the brand, it's not. A fake Chanel bag is made with the most inferior materials and craftmanship. It's usually the newbies that don't know off the bat. And, those who are knowledgeable deal with stress and loss of money once they get the item in their hands.

>A fake Chanel bag is made with the most inferior materials and craftmanship.

But apparently the bags are durable enough to last for years, so the materials and craftsmanship can't be that bad.

>And, those who are knowledgeable deal with stress and loss of money once they get the item in their hands.

The stress is caused by attachment to status symbols, and could be better solved by letting go of such bullshit. And they would have lost the same money by buying a genuine Chanel bag, which is only considered to be worth that much money because of the brand.

> But apparently the bags are durable enough to last for > years, so the materials and craftsmanship can't be that bad.

As a recently-converted believer, I recommend you take a look at a five-year-old version of each and then make your judgement. The difference is significant.

> which is only considered to be worth that much money because > of the brand.

Perceived value isn't less real simply because it is all in our heads ;)

One thing I hate about trademark legislation it that it prevents knowingly selling "counterfeit" trademarked goods. If a consumer wants to knowingly buy a "counterfeit" item, then that should clearly be legal. Besides, the sale of misrepresented goods is already illegal because of other laws, so there's not much need for trademark laws.

Of course, trademark laws increase profit for many companies, which is the reason they've been created in the first place. However, the point of intellectual property should be to benefit society, not companies.

"According to our experts, greater than 60% of the Herve dresses sold on eBay were fake [1]. Heh, that means eBay profited more on counterfeit Herve Leger than authentic ones."

How is eBay compensated? If they are compensated on a flat-transaction-fee then sure. But I thought they took a percentage of the sales price (in which case your assertion would not be true if the fakes sold for a tenth of the price of the originals.)

This is the problem... regular users (that aren't brand experts) cannot tell the difference. So on eBay, the counterfeits sell for about the same price as authentic items.

I'm not really familiar with eBay's practices, but what happens if the product is counterfeit but advertised as original?

Unfortunately, getting money back after receiving a counterfeit from eBay is not trivial. A third party authenticator must be paid by the buyer to fax a thorough formal document for PayPal to review. The process can be long and expensive. Even then, it's not guaranteed that the buyer will receive their money back as a result. Buying and selling designer items through auction sites such as eBay is fraught with risk. Mind you, a seller of authentic items can get hit with a fake claim as well.

This wasn't the case for me last month, I bought a guitar pedal that turned out to be a fake, I filed the complaint and sent in evidence, received a full refund from eBay/Paypal.

Not all eBay cases have the same outcome. There are even online sites dedicated to putting together counterfeit claim documents for Chanel, Hermes, etc for eBay. They usually charge around $100 for a document.

What if they didn't want to? What if someone, most everyone in fact, who buys anything Chanel/Hermes/Vulgari on Ebay actually wants to buy a knock-off? That would explain why these things are so cheap over there.

Appreciate the thoughts. If you want a knock off; it's your own business. However, most sellers are advertising their items as authentic when they aren't. This results in someone purchasing an item for hundreds if not thousands of dollars for something that they did not expect. Our site caters to those who want the real deal. :)

The concept of luxury brands still completely bewilders me. Living in Asia where literally every girl clutches an LV, Chanel or Gucci bag, the abundance of what ultimately is a social ranking tool serves to cancel itself out. The fact that you're required to line up outside the store is downright insulting.

Apologies for the side-rant, the site itself fills a very real need and kudos for that. I just feel some people would feel more validated carrying around a bank statement instead of a handbag.

There are many reasons to buy and enjoy luxury goods. You have only found one possible reason.

do enlighten us

Nostalgia, Craftsmanship, Fit, Artistry, Fashion, Design, Comfort, Durability.

I have bought a Burberry trench coat because a close friend inherited one from his grandfather who was issued one (maybe purchased, not sure...but definitely worn) as an officer in the Royal Navy during WWII. I admired the craftmanship, durability, and fit, and I wish to pass mine down to my own children some day in a similar fashion.

Some people appreciate the beauty and quality of designer items. For instance, I personally find Herve Leger to fit me better than any other brand of dress. The items hold their value and beauty so well, that you can oftentimes sell them for a profit (Chanel is a great example of this).

Wouldn't the opposite be just as bewildering then? There really is no difference between buying a Hermes dress and buying Dickies overalls, right? Each item makes a statement and each person is well aware of the statement it makes. Both can be bought for practical reasons. Both make comments on social placement. Both help people identify themselves. Both help find/identify suitable mates.

I too find it so hard to believe people spend so much on apparel, but that thought is no different than people finding it odd that I spend so little. Of course, some items are easy to liquidate and others are not.

>There really is no difference between buying a Hermes dress and buying Dickies overalls, right?

There would be an aesthetic difference. But status symbols are about more than just aesthetics. It's not like you need to buy overpriced brands just to get things that look good. In fact, the existence of the fake goods this site is trying to weed out proves that.

>There would be an aesthetic difference.

This is my point. People have value systems and brands and styles can be a part of that. An inability to identify with someone buying overpriced goods does not make the judgement process any different that their inability to identify with the practicality of buying things at a fair price that look good.

But the judgement process is different. You can only tell which brand is better if you've heard of the brands. It's an external judgement, internalized. But you can make an aesthetic judgement even if you've been living under a rock.

I'd put it another way and say that generic quality brands merely inherit their social placement, whereas luxury brands actively seek it. The latter is a bandaid for a character flaw.

One of my friends has two kids - 4 and 7 - who live with their grandparents in Malaysia as they "can't afford schooling in Singapore." The truth is that it allows them to maintain their image with an LV shoe-rack and a Gucci bag cupboard. He recently changed his Whatsapp image to a photo of his new $1K Hermes belt - they see their children twice a year.

My first instinct was that this appeared to be a very low volume industry and a really small niche market of people that are buying second hand and desire expert verification.

Then I thought about it for a while, and I can see where you're coming from. A percentage fee seems like it could work with lower volumes.

I'm curious about the site's design, though. Why did you choose to organize the auction the way you did, scrolling down one item at a time? It seems a bit disorganized; are you planning on adding more categorization?

I notice you only accept three brands. Is there a legal or a verification bottleneck that prevents you from covering others?

Hi, thanks for your thoughts.

Authentication is a skill, and that's why other sites who decide to take on all secondhand designers at once usually have counterfeits leak through.

My company sells fine jewelry on amazon, eBay, buy.com marketplace, Newegg marketplace, shop.com and more. We connect to all of them automatically through Channel Advisor, as do many large fashion companies. If you connect to CA, you will have a world of sellers you can select from who wouldn't bother with your small site otherwise. We all pay $10000 or more a year to use it so it's serious businesses.

Thanks for the pointer! We'll definitely look into Channel Advisor as we start taking on more power sellers.

TechCrunch yesterday: "If you think 10% is a good transaction fee for your marketplace, then you will struggle" http://techcrunch.com/2013/03/16/marketplaces-businesses-are... TechCrunch today: Check out this startup taking on an encumbent with a sub-10% (7%) transaction fee.

:) Yep. We read this too, and we loved this comment:

Steven Cox 22 hours ago- The amount of margin a company can extract from the marketplace depends on a couple factors: (1) Amount of competition within the category, (2) the amount of value the company is providing that market participants are willing to pay for (example: a listing site vs. a listing site plus scheduling and billing tools), (3) the virality of the business (lower CAC = ability to charge lower fees), and (4) the presence of a recurring revenue stream (allows for lower margin per transaction).

No matter what margin the business decides on, the strategic decision each company must ask is how much adoption is needed today vs. the expeted margin. The higher the growth needed, the lower the fees need to be.

Once, I heard an early eBay Executive explain how eBay's initial low fees allowed them to run away from other early auction sites. They were priced low enough to where no one could undercut them and priced where the market contributors deemed the fees reasonable. The other sites had two options: charge less and go out of business or charge more per transaction to get the same revenue output - which caused the market contributors to seek out a lower cost solution (eBay). Game over.

Part art, part science... and a tank load of work.

I definitely agree it's part art and part science.

"The higher the growth needed, the lower the fees need to be."

I don't think that's strictly true. If you had two companies and one had three times the margin of the other, this gives them three times the revenue of the other to acquire and service new customers.

Without the margin you need to go the massive VC route, which is what eBay pursued. Depends on how you want to build the business I guess.

I run a marketplace too, good luck! :)

To some extent, they are right...if only by accident. Marketplaces are terribly tough businesses to start quickly. They either need a TON of venture capital to be able to build a userbase quickly...or they need none at all and build their userbase slowly (and profitably).

Lollipuff can do it, but it is an uphill battle with dim revenue prospects in the short and mid term.

Cool idea. One question: why focus on Chanel? Since Chanel has been using holograms for years, isn't there more opportunity in focusing on brands that aren't as easy to authenticate (e.g. LV which does insane volume on eBay)?

Chanel is still very difficult to authenticate for most Chanel admirers. We wanted to start off with the hottest most recognizable bags, shoes and dresses.

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