Why This Luxury Goods Marketplace Startup Thinks It's Popping Up at the Right Time

Ecommerce has seen a slew of companies like Everlane and Cuyana promise luxury goods at an affordable price. A $100 cashmere sweater that’s sustainably made? Everlane’s got it covered. A used luxury handbag that’s still fashionable? That’s what Rebag is for. Even bespoke companies like Constorium are betting on luxury, dedicating 15 stores across the country to test and see how well custom (and pricey) products can sell. Enter Italic, a luxury goods marketplace where consumers can buy high-end products directly from the manufacturers that also make items for Prada and La Mer. It’s the inevitable next stage of where luxury meets ecommerce. To shop on the platform, consumers need to pay an annual membership of $120 and can only buy two items per month. More than 100,000 people are on the waitlist, with about 60 items for sale now (and reaching 100 this week). “For our manufacturing partners, we essentially provide them with the speed of tools that allows them to sell directly to consumers without having to take on the overhead themselves," said Jeremy Cai, founder and CEO of Italic. “Everything that brands do, we provide for our manufacturers.” Cai said while it’s beneficial for consumers, as they theoretically spend less on a product because they aren’t paying for a brand name, the manufacturers earn more margin and are able to set the price of their products. For example, Italic will design a handbag for a manufacturer that normally creates $500 Prada bags, but this handbag will retail as a label-less item on Italic in the low $100s. Cai declined to share the commission Italic makes on each sale. “You’ll notice that we’re not aiming to be the cheapest product in the market, we’ll consistently focus on providing the best value,” Cai said. “You will not find better quality at our price point in the market.” Part of keeping that value involves the membership model and unique designs. Cai said the reason Italic has a membership is to control the demand of items and list items based on what a factory actually charges, rather than taking on mass inventory and asking for lower prices. Because Italic doesn’t buy inventory, the company can invest those resources into design and merchandising. And unlike brands like Fashion Nova, Italic is creating new designs for these manufacturers to create so that it is a one-of-a-kind item and doesn’t necessarily just resemble a Gucci bag. Cai said the membership model means they can reach out to their customers and see what they like so that they “have a hand in development.” Italic is focusing on the classic direct to consumer audience of a 20- to 35-year-old, urban, well-educated consumer as well as the suburban middle class. And though Italic's business model is devoted to selling unbranded products, Cai doesn't believe people will only buy from non-brands. Instead, Cai sees commerce being half private label and the other to branded products. “We’re not trying to replace or even make the claim that brands are going away,” Cai said. It’s not, seeing as companies like Shoprunner, a two-day delivery company that works with retailers like Neiman Marcus, just debuted a new app dubbed District that brings together luxury brands like Cole Hann and Kate Spade into one checkout and cart. Chris Milone, CMO at Shoprunner, said an app like district wants to keep that “brand identity” and instead curate the experience for luxury shoppers. “Nobody’s really cracked discovery and that’s one of the things we’re really trying to do with District,” Milone said. “The District population [wants] a branded item and in some ways, [a] consumer is not just getting a great product but a status symbol with the product that they’re purchasing. It’s as much about displaying the product as much as it was about owning.” However, Milone agrees that the luxury ecommerce landscape will be a “seesaw,” in which a portion of consumers will care about how the product is made and others will want the trusted brands. “It’s building that consumer trust that the product is really going to be that quality and that’s the difference between where you sort of sit in the seesaw,” Milone said. “Some people are going to want this item because they trust it. For new challenger direct to consumer brands—that’s a trust you have to build.” Italic has more than 100 items in different categories from bags to clothes and isn’t focusing on “drops” for new items. Cai acknowledges that building this business isn’t easy and won’t be, but he’s hopeful the changing tide around how consumers think about their money will make Italic a success. “I think a lot of people have started to become very smart about their dollars,” Cai said. “We’re offering them legitimately luxury quality products. Our customers, our members are able to get close to factory price points. And because of the Italic infrastructure, they can get it at the same deliver time, purchase experience as if they were buying it from a high-end retailer.” Get access to more stories like this—sign up for Adweek’s ecommerce newsletter today.