Business Plan:

Online second-hand market for luxury fashion

General description of the business:

Before, during and after the coronavirus pandemic, people do not necessarily always have the means to afford a high budget for luxury items that are sometimes priced much higher than their own salary or what is left in their wallet after having met the necessary needs in daily life. For example, according to Eurostat in 2020, the average monthly salary in the countries of the European Union varies between 312 and 2142 € while the price of a luxury brand answered can vary between 3000 and 7000 €. There are items that are cheaper as well as much more expensive.

That's why, I chose as a business, a second-hand boutique with only luxury products and specified in the fashion world. On this site you will find goods such as clothes, bags, shoes and jewelry for women also for a man. This could be vintage goods nowhere to be found in stores, products with limited stock and no longer available worldwide, and luxury goods at much lower prices and more accessible to all budgets.

It will be an online sharing site where people can sell their goods from home but also be able to buy those sold by other consumers on the site. I chose to create an online store for different reasons.

•The first would be the current pandemic which does not allow today to function properly and we are not aware of the finality of this pandemic, especially that even if one day it ends it will leave consequences on the world economy.

• Also, in connection with the pandemic, sales will not be affected by the closure of shops, companies, industries, it is a business that can even evolve in better condition since with the restrictions present people are forced to stay at home and the internet is an accessible medium for a large community, people sometimes do not even have to leave their homes if they want to buy a product, they can only receive it by a simple and inexpensive means which is the post.

•Another reason for this choice is the possibility of not being restricted to a single country, region or city which would be explained by a reduced clientele while online the world population can be reached and brings in more visits from cultures different and bring a variety of products on the site.

Competition:

One of the biggest obstacles to the proper functioning of the site is the non-popularity of the site. At the beginning when entering the market, the site will be unknown and will be lost among all the other sites already present on internet with an already loyal community. So before launching into this business, it is necessary to analyze the competitors already present:

- Vestiaire Collective:

•A French company, the first online consignment site dedicated to luxury and fashion, thus offering second-hand products, in Europe.

•From 2010, investors began to take an interest in this start up.

•The company achieved some 140 million turnovers in 2017, these are the latest figures unveiled by the company.

•The platform now boasts 8 million members worldwide, with 40,000 articles uploaded every week.

•The company is still in full development; their commercial actions are mainly located in Europe but want to start to expand the trade in Asia.

•One of their big advantage is that it promises authentication of products before sending them to buyers, currently 17 employees check parcels every day.

•A large choice of range, it diversifies for women, men and children. On their site we find clothes, shoes, jewelry, watches, accessories new goods as well as "vintage" second-hand goods.

- The RealReal:

•An American company, online site who sells consigned clothing, fine jewelry, watches, fine art and home decor.

• One of their big advantage is that it promises authentication of products before sending them to buyers

• Another of their advantage is that they pronounce the diverse global community in their teams, their employees are Black, Hispanic/Latinx, Asian, White and they are against the patriarchal system with more than half of the employees being women's.

• A large choice of range, it diversifies for women, men and children. On their site we find clothes, shoes, jewelry, watches, accessories new goods as well as "vintage" second-hand goods.

• The company achieved a turnover of 300 million in 2019.

• This company The RealReal collaborate with associations for the good of the environment, for saving liters of waters and fight against carbon gaz.

• Their opens a retails store in New York city, 5 retails location in Los Angeles, New York city, San Francisco, Chicago, and California.

•They did and still do a partnership with some luxurious fashion brand as Stella McCartney, Burberry and recently Gucci.

These are two sites which deal with the same trade as my business but one is from the European continent with a French company and the other is from the continent of North America with a company from the United States. This allows to compare strategies between different corners of the world and made them not easy competitors. There is a variety of sites and creating a big competition for our site.

Organization and Human Resources:

Now we have studied the competition already present in this market. We need to think about the structure of our site.

First of all, the name of our online site will be “Mode Éternelle”, which translates to eternal fashion it is a fragment of the famous french proverb “La mode est un éternel recommencement” which means “Fashion is an eternal reconstituation”. This proverb defines our site well, which allows the sharing of different products that are coming back in fashion or products that may come back in fashion. In all cases. This proverb defines our site well, which allows the sharing of different

products that are coming back in fashion or products that may come back in fashion.

I would like to guarantee to all the people ordering on this site, the authenticity of the luxury products sold on it. Each product before going online will need to be approved and verified by me and two other friends of mine who will help me with this project. They both study in a business school specializing in “haute couture” and luxury in Paris. To be able to sell a product on this second-hand online store, the sellers will have to send by post the product with the authentication, the invoice of the product in our apartment address in Paris. We on our side will check the prescribed information and the seams of the product to determine the product condition. In this way we will be able to guarantee our consumers the reliability and quality of the products put on sale.

At the beginning of the site, I would then be accompanied by two of my friends to manage this project, we will start without hiring other employees and work alone on the management of the packages received, on the design of the site, the management of social networks and the advertisement.

We hope over time for a real development of our site, that is to say that the number of members on our site will increase and that sales will grow. So, we will be looking for investors who would be ready to invest in our second-hand luxury online store, so we can rent real premises and hire several employees who will work on the development of the design of the site and management of social networks, but also employees who will manage sales and orders and hire luxury specialists to authenticate 100% of the products sold.

According to many second-hand market studies, luxury market has exploded in recent years. Buying second-hand luxury clothing or leather goods is no longer taboo. This market is growing by 12% per year and already represents 25 billion Euros. “ IntoTheMinds specializes in market studies”. And represent 25 billion € for the second-hand luxury market worldwide (source Boston Consulting Group). Also 36 billion € for the value of the second-hand luxury market in 2021 (source Boston Consulting Group).

Marketing Strategy:

We are new to this market so to make ourselves known and make a place for ourselves in this trade we are betting everything on marketing.

First of all, the community that can be reached with this site is mixed as much of students with reduced budgets, adults passionate about fashion and looking for new unique pieces and elderly people who care about the environment and who is looking for goods from their old days that cannot be found today.

Today our company is run by different social networks such as Facebook, Instagram, YouTube etc ... It's a free and easy way to promote our site and gain new customers.

We are going to create an Instagram account where we will be very active, we will be able to promote the store and its values, but also be able to communicate with our customers on their opinion and the improvements that can be made in the future. We would also ask the influencers present on the networks which are in the field of fashion if they would like to promote our brand-new site by sharing our Instagram account on their networks which touch a big community and a potential clientele for us.

And always to attract customers we are going to set up promotional codes and cheaper delivery conditions from a certain threshold of money consumed on the site changing every month or every week.

We will also create a YouTube channel where we will post podcasts on the advantages of buying second hand products such as:

- The price which is much more affordable for everyone but with just as much a good quality of product.

- The fight against overconsumption, protect the planet and reduce the emission of greenhouse gases is used by the clothing industry which is designated as the second biggest polluting source on our planet.

- Let's avoid counterfeiting, why enrich people who do not respect the work and the history behind a luxury clothing or accessory, often also created

from very polluting materials and sometimes more expensive than vintage luxury products.

- Buy pieces that are unique or unavailable worldwide because of exhausted stocks, our customers would be the only ones to acquire these pieces and which gain in value over time.

We will be very active on social networks by showing our working conditions, especially during the covid-19 pandemic we will highlight the security measures such as we will take with regard to the items received so that customers are reassured and can trust us.

Financial:

With this system to generate income for us. Our system is when we receive the products that they are in good quality, we suggest a price for the bag based on the current market but it is the seller who sets the price in the end. During the sale, we send the final package to the buyer who pays him the delivery and we pay the seller taking 12% at 15% commission of the sell product, it depends of price of the product. Sellers can be paid by Wallet, PayPal or bank account.

We study the market we noticed that the amount of the commission is often 15% at 25%, to attract more customers and retain them to our system we have lowered our commission system by 3%.

Delivery is sometimes but not always free in France and at different cost in Europe and other continents, because it’s the buyer who pay the delivery.

To create an account there is no additional cost, only you have to give your first name, last name, email address and RIB.

The cost fixed for bank charges for a small business in France are 20 € (excluding taxes) per month, and is added to its social charges and taxes.

The turnover will depend on whether the demands will develop and which price range will be the most prominent during the sales of the site.

For example a product with coast 1429 €, the shipping costs to ship this product are 10 €. Our customer will pay a total of € 1439 to purchase our product and our turnover will be 12% of € 1439. So our final gain of this sale will be 171,48€.

And if we do 200 sales during this month our turnover will be approximatively 34200€. 171,48 x 200 = 34200

Our charges and taxes will be: 34200 x (12% + 1%) = 7524 € If our customer pays us by PayPal, we will have to add the commission: 34200 x 3.4% + 0.25 = 11628.25€. We will therefore be left with: 34200 - 1000 - 10 - 7524 – 1163.05 = 24502.95 €, is a percentage of profit of 19% from which we must still deduct part of our fixed costs as rent or our wages because we work alone, and pay the bank loan and keep money for future investments.

We give the company a year to see if it is developing properly as we have demonstrated above or that sales do not increase and that the networks still do not attract either customers or investors that we end up in financial deficit because we spend more money in the business than earning profits.

If that does not work it will be necessary to reinforce the publicity and to seek investors if after these measures taken nothing changes, the only solution which remains is to abandon the project because of the lack of profits.