# Luxury Resale - Value Chain Analysis
*2025-02-02*
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## Executive Summary
The luxury resale market encompasses all activities involved in the secondary circulation of luxury goods, from authentication to logistics to final sale. The chain is characterized by fragmentation at the sourcing step, high margin concentration at the platform/retail level, and significant friction in authentication and pricing. Global market estimated at €30-40B with 12-15% CAGR.
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## Value Chain Overview
┌──────────┐ ┌──────────┐ ┌──────────┐ ┌──────────┐ ┌──────────┐ ┌──────────┐
│ Sourcing │───▶│ Authen- │───▶│ Pricing │───▶│ Listing │───▶│ Fulfil- │───▶│ After- │
│ & Intake │ │ tication │ │ & Grading│ │ & Sale │ │ ment │ │ sales │
└──────────┘ └──────────┘ └──────────┘ └──────────┘ └──────────┘ └──────────┘
│ │ │ │ │ │
5% 8% 7% 45% 15% 20%
margin margin margin margin margin margin
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## Chain Summary
| Step | Primary Actors | Margin Share | Digitization |
|------|----------------|--------------|--------------|
| Sourcing | Individuals, estate sales | 5% | Low |
| Authentication | Entrupy, in-house teams | 8% | Medium |
| Pricing | Platforms, appraisers | 7% | Medium |
| Listing & Sale | Vestiaire, The RealReal | 45% | High |
| Fulfillment | 3PLs, white-glove services | 15% | Medium |
| After-sales | The Restory, repair shops | 20% | Low |
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## Step Analysis: Authentication
| Aspect | Detail |
|--------|--------|
| Key Players | Entrupy (AI), Real Authentication, platform in-house |
| Market Structure | Semi-consolidated around 3-4 tech providers |
| Margin Capture | 8% of total value |
| Entry Barriers | High - requires expertise and trust |
### Trends
- AI-powered authentication gaining traction
- Blockchain certificates for provenance (experimental)
- Brands exploring official authentication programs
### Frictions
- Speed vs accuracy tradeoff
- Cost per item ($5-30) limits lower-value goods
- Counterfeits becoming more sophisticated
### Opportunity Signals
- Real-time mobile authentication for C2C
- Authentication-as-a-service API
- Brand-certified pre-owned programs
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## Cross-Chain Dynamics
| From Step | To Step | Friction Level |
|-----------|---------|----------------|
| Sourcing | Authentication | Medium |
| Authentication | Pricing | Low |
| Pricing | Listing | Low |
| Listing | Fulfillment | Low |
| Fulfillment | After-sales | Medium |
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## Integration Patterns
| Pattern | Players | Rationale |
|---------|---------|-----------|
| Full vertical | The RealReal | Control quality, capture margins |
| Auth + pricing | Rebag (Clair) | Data advantage, instant buy |
| Brand direct | Gucci Vault | Control narrative, capture value |
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## Opportunity Matrix
| Step | Opportunity | Attractiveness |
|------|-------------|----------------|
| Sourcing | Automated valuation & instant offers | High |
| Authentication | Authentication-as-a-service API | High |
| Pricing | Universal grading standard | Medium |
| Listing | White-label resale for brands | Very High |
| After-sales | Tech-enabled repair marketplace | High |
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## Underserved Areas
| Area | Why Underserved | Size Estimate |
|------|-----------------|---------------|
| B2B resale | Platforms focus on C2C | €2B+ |
| Mid-market auth | Cost prohibitive | €500M |
| Cross-border compliance | Complexity | €300M |
| Repair booking | Fragmented supply | €400M |
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## Strategic Questions
1. Which step yields disproportionate returns if improved? Authentication
2. Where are incumbents unable to innovate? B2B sourcing
3. What adjacent players could reshape the chain? Brands
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## Sources
- Bain & Company: Personal Luxury Goods Study 2024
- ThredUp: Resale Report 2024
- The RealReal: SEC Filings
- BCG x Altagamma: True-Luxury Consumer Insight