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Borrowed boxes of clothes, six hours
Starting with nothing
Fleek is a marketplace connecting secondhand clothing wholesalers, who receive tons of clothes in boxes from all over the world, with the secondhand shops that sell them. At the start it was three founders with an idea.
Selling boxes by hand
They walked into giant London warehouses, picked a box, and asked for it for free. In six hours they would bring it back, either with all the clothes or with a bunch of money. They sold the clothes by hand to shops around London and came back with $6,000 for the store, then repeated it with wholesaler after wholesaler until they were known as useful people in the wholesale community.
What they learned
That taught them what sells and what doesn't, the best time to bring clothing in, how to price it, and how elastic demand is. A marketplace web page and a pile of emails would have made all of that very hard to see. They carried cartons for about four months before moving buyers and sellers onto the website, since the founders can't be the ones moving every box.
Where do secondhand clothes in bulk come from?
Used clothing is collected by charities, textile recyclers, and donation programs in many countries. Sorters grade it by quality and type, then compress it into bales that wholesalers sell by weight. Much of it is exported, and the grading determines which market a bale ends up in.
How does price elasticity shape what a seller charges?
Price elasticity measures how much the quantity people buy changes when the price changes. When demand is elastic, a small price increase causes a large drop in sales. When it is inelastic, buyers keep purchasing despite higher prices. Sellers learn which case applies to each product by trying different prices and watching the results.
Why do marketplaces struggle to get started?
A marketplace needs sellers to attract buyers and buyers to attract sellers, a problem often called the chicken-and-egg problem. Economists Jean-Charles Rochet and Jean Tirole analyzed such two-sided markets in a widely cited 2003 paper. Many marketplaces begin by serving one side by hand until the other side shows up.
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