Sustainability E-Commerce Opportunity

A look into a successful e-commerce company that secure millions in funding and is growing extremely well.

Hello, I hope everyone is doing well! In this newsletter edition, I am trying out a new format, concentrating on business opportunities. I have posted at length various examples of failed attempts as a business that eventually lead to success because of the founder's drive and motivation on not giving up. 

How can we move onwards to identify opportunities that other founders or companies capitalized on—perhaps, mimicking or learning something new from their experiences. I decided to research and post this case study email today. 

TDLR; Vinted is an online E-commerce marketplace founded in Vilnius, Lithuania, in 2008. 

  1. The idea for this business occurred when founder Milda Mitkute needed to offload excess clothing during moving house.

  2. Vinted does not charge its users for listing or even selling their unwanted items. Instead, their revenue generation is dependent on buyers who must pay all of the transaction and shipping costs.

  3. Vinted also makes money with its Wardrobe Spotlight service, Bumping Listed Items and Buyers Protection Service Fees. Users can pay to have their listings made more visible in the news feeds or buyers' search results with the application for a relatively small fee. 

  4. Opportunity - Mimic Vinted and niche down or explore other categories altogether. 

Let's Dive in 🤿


Climate Change

As the world was dealing with Covid and many parts of the world still are, a theme emerged at the beginning of the pandemic. Climate change. Noticeably, the carbon emissions began to decline, the first time in years. 

As some countries begin to ease restrictions, carbon levels have seen apparent signs of regression to anti pandemic levels in some areas. This sparked some thoughts about how we can care for our climate while using the opportunities to create a business that surrounds that very mission. 

Opportunity Sustainable Used Clothing

I stumbled upon a company called Vinted who is doing precisely that. Their mission is to help consumers sell used clothes they no longer need or use. Opportunities to purchase clothes at a fractional price point and saving that piece of clothing from being disposed of has attracted many to its e-commerce platform.

Growth in this company has exploded. What started with two founders Milda Mitkute & Justas Janauskas) Now employs 700+ people globally. The community has also flourished to over 45 million members. 

How it works?

  1. List your item with a description and photographs

  2. Ship your item within five days following their instructions

  3. No seller fees. Once the buyer is confirmed, funds are yours to keep

  4. Great refund policy

  5. Sellers take all monetary proceeds without any fees

Financials

The older financial model was to charge seller fees upon any successful transaction. The company has moved away from that business model and now makes money in a variety of ways listed below:  

  • Buyer Protection Service Fee is an option that sellers can opt-in for, providing customer support, insurance, and shipping tracking information. The fee is 0.5% of the item price and an additional $0.70 fixed amount on top. 

  • Sellers are responsible for paying shipping costs, and that varies based on weight and size. 

  • Depending on which region you use Vinted in, a Wardrobe Spotlight section can be purchased to showcase your item in various locations, increasing views, costing £6.95.

  • Bumping Listed Items - sellers can purchase this feature to have their items listed in certain members' search results. This means more eyes on items for sale. The bumping feature is for three days at $0.70 per bump! 

Raising Capital

  • Vinted has completed six rounds of funding, totalling $562 million

  • The latest funding round raised €250,000,000 / Series F from 6 other investors.

  • Vinted has also acquired two companies to date 'United Wardrobe' & 'chicfy'. 

Opportunity

The idea of Vinted has garnered tons of attention and funding from several investors. Market validation is already complete here. There is always a need to purge once in a while to remove unused clothing. I moved recently and can't tell you how many trips to the donation box I took.

There is an opportunity to niche down to particular items around your home. It could be concentrating on dressy attire, accessories, or perhaps a different field altogether, i.e. books or technology (think old laptops etc.). The point is there is a need for sustainability, and Vinted confirms others have that same issue. 

The distinction here is, I am not sure everyone on the platform cares about climate change. I am sure some users want to sell, make a profit and move on. However, incorporating some charitable donations can help alleviate that concern. 


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Thanks for tuning in this week. I hope you found the content helpful!

Enjoy the rest of the week and stay safe.

Cheers,

Paolo

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