Chic discount sites allow users to find designer goods for less

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Owner Corri McFadden looks over clothes and shoes dropped off at her store, eDrop-Off, 2117 N. Halsted, which lets women sell items worth $50 or more in online consignment. | Keith Hale~Sun-Times

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Updated: April 13, 2012 6:18PM

Two websites with local roots are helping shoppers find bargains on everything from shoes to furniture by leveraging the latest in social networking — friends talking to friends and women taking each other’s advice on great finds.

In Chicago, fashion design entrepreneur Corri McFadden has set up a combination online-and-in-person consignment shop that is growing by word-of-mouth as a reliable place to sell otherwise too-expensive-to-get-rid-of fashions from labels like Chanel, Gucci, Prada, St. John and Diane von Furstenberg.

“Women will say, ‘I can’t get my arm into this Chanel jacket but I paid so much for it,’” McFadden said. “This gives them an outlet to turn that jacket into $1,000 and clear out valuable space.”

The company, eDrop-Off, lets busy women drop off certain categories of fashions, shoes, jewelry and related accessories at a newly built, 3,000-square-foot location at 2117 N. Halsted. It is also operating a temporary “pop-up” drop-off site at 1155 N. State St. for a year.

The company also offers free, nationwide UPS pick-up and free closet consultations.

The merchandise must have at least a $50 sales potential and be brand-name and desired by people who search online for clothing sales. Vintage brand names, such as a Chanel handbag that’s discontinued, sell well.

EDrop-Off authenticates the merchandise and sells it online, taking care of eBay listing fees, closing fees, PayPal fees and other business details. The company takes 40 percent as its commission, but boasts a 25 percent higher sales price than an average eBay seller, based on its reputation and the amount of traffic its offers generate.

“We sell more than 1,000 designer items a week,” McFadden said.

McFadden has worked 80 hours a week for the past seven years to build her niche in online consignment.

“My passion is fashion,” she said. “I love this.”

The second site, home-décor
merchant One Kings Lane (One
KingsLane.com), is a members-only site aiming to do for furniture and housewares what Gilt Groupe has done for haute couture, offering exclusive finds from interior designers and specialty retailers for only a few hours or days. The goal is to create a feel of scarcity and urgency that preserves the products’ luxury image while offering the goods at up to 70 percent off retail.

The site, whose name is meant to evoke a local boutique in a quaint downtown, is the brainchild of veteran Warnaco apparel executive and strategic acquisitions adviser Susan Feldman and Alison Pincus, a digital-business development specialist and the wife of Mark Pincus, a native Chicagoan and billionaire founder of social-games company Zynga.

“We are giving people the opportunity to buy into the world of interior designers and taste makers,” Pincus said. “It’s a magical opportunity for fans of these big designers.”

The site also offers deals on gifts, food and accessories, all from more than 700 vendor partners. Recent deals include an Agraria candle for $35 that would have retailed for $75 and a silver-beaded picture frame for $69 that would have sold at retail for $120.

The concept is proving popular, as One Kings Lane’s revenues skyrocketed 500 percent in 2010 from 2009, with 80 percent of sales coming from repeat customers. The business’ success helped it raise $27 million in venture capital.

Overseeing the San Francisco-based venture is CEO Doug Mack, a Lake Forest native who co-founded a home-design Web visualization company and transformed it into a rich-media technology platform for the e-commerce industry.

Mack, who most recently ran the Flash and Photoshop businesses at Adobe, sees One Kings Lane as leading a “second wave” of e-commerce that gives buyers insights into how popular an item is by how quickly it is selling in real time.

“Most of the items sell out before their 72-hour ‘flash sale’ deadline expires,” Mack said.

One Kings Lane also offers “tag sales” on Saturday mornings and Tuesday evenings featuring unique pieces from interior designers’ private stashes of inventory.

Other retailers are jumping on the social-networking “flash” sales bandwagon: Nordstrom has acquired members-only flash-sale site HauteLook; Facebook plans to launch a daily-deal site focusing on social experiences that people do as a group, and Gilt Groupe has gotten into the home-décor business by acquiring website Decorati.

A compulsive-shopping expert warns that such websites can be tempting. “Before shoppers hit the ‘buy’ button, they should ask themselves: How do I feel? Do I need this? What if I wait? How will I pay for this? and Will I want to return it?” said April Lane Benson, author of To Buy or Not to Buy: Why We Overshop and How to Stop.