Until now, figuring out how much a Chanel or Goyard bag would fetch on the secondhand market would require a lot of online sleuthing—and even then, you might not get an accurate price. But that’s about to change.
Rebag, a startup that buys and sells luxury goods, has just launched a free app called Clair AI that allows you to take a photo of a handbag—whether in your own closet, at a store, or even online—and instantly get its resale value. If you happen to own the bag in question and want to sell it, Rebag guarantees it will pay you the price quoted in the app. Clair AI is a big step forward not just for Rebag but for the entire resale industry because it helps standardize the price of secondhand bags, much as the Kelley Blue Book does for cars.
Charles Gorra, founder and CEO of Rebag, has been working on Clair since he launched the company in 2014. As he studied the resale marketplace, which was quickly growing thanks to players such as TheRealReal and Tradesy, he realized that it was hard for consumers to figure out exactly how much a secondhand product was worth. “It was like the wild west,” Gorra says. “It was strange to me, because luxury bags cost thousands of dollars; some cost more than cars. And yet you would never buy a car without understanding its resale value.”
Rebag is different from other resale platforms because it actually owns inventory rather than keeping things on consignment. Rebag buys luxury handbags, accessories, and watches directly from individuals, focusing on around 60 top brands with products in top condition. It then sells the products on its own website, with prices ranging from around $500 to thousands of dollars. Rebag doesn’t disclose its margins, but they’re on par with the rest of the industry, which takes a cut of between 10% and 30% of the resale price. (It’s also worth noting that the resale price Rebag quotes might be less than you could get on the open market, as Rebag marks the bag up in order to make a profit.) Last year, Rebag landed $15 million in Series D funding, bringing its total investment to $68 million. It has seven retail stores in New York, Los Angeles, and Miami, where customers can both buy and sell products.
For the past six years, as Rebag has bought and sold thousands of luxury handbags, it has also been gathering data about the pricing of each bag based on the brand, model, age, and condition. Last year, it released an early version of Clair that didn’t have image recognition technology but let people assess a bag’s value by putting in its details. This new version of the app makes the experience a lot faster. It can currently recognize more than 15,000 bags and prices them with 91% accuracy. “You can assess the value of a bag in seconds,” Gorra says. “We made it free for anyone to use because we hope that lots of people will use it, whether or not they eventually choose to use Rebag. All of this data helps us to improve the app and also see what bags people are interested in.”
Of course, the app is also designed to drive business to Rebag. (The image recognition technology currently only works with handbags, but consumers can manually input details about accessories and watches to get quotes.) The app might prompt customers to go through their closets and snap pictures of their bags to see what they could get for them. The curiosity could turn them into Rebag customers. When the first iteration of Clair launched, tens of thousands of consumers used it, which led to a spike in Rebag’s revenue.
But Gorra says that establishing the value of secondhand bags isn’t just valuable to customers. He believes luxury resale is still in its infancy and tools such as Clair will give consumers more confidence in their purchases as they know what the products are worth. “The secondhand car market is worth more than the new car market,” says Gorra. “And yet the secondhand market for luxury bags is just a fraction of the size of the firsthand market. The industry has a lot of room to grow.”
Right now, Clair AI isn’t designed to identify fake luxury bags. If the bag doesn’t correspond closely with a real bag on the market, the app will reject the image and decline to value it. However, it is possible that a very good counterfeit might dupe the technology. That said, if you tried to sell it to Rebag and sent it in, the company’s experts would recognize the fake and send it back. (While Rebag guarantees the price it quotes, it makes exceptions if the bag is a fake or if there are major flaws that weren’t disclosed.)
For luxury-bag lovers such as me, an app like this is a game changer. The next time I’m tempted to drop a lot of money on a Gucci or Chanel bag, I can figure out if it’s a good investment. Of course, that means I’ll be the annoying customer at the store snapping pictures of handbags. But if Clair AI is a success, I won’t be the only one.