July 11, 2013, 11:50 AM

Newcomers to the Second 500 are growing the fastest

With 42.5% sales growth in 2012, the 59 e-retailers new to the Second 500 Guide this year far outgrew the veterans, which grew their combined web sales 13.1% in 2012.

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The 59 online retailers new to this year’s Second 500 Guide entered with a bang. Collectively, they grew web sales 42.5% to $434.7 million in 2012 from $305.0 million in 2011, driving nearly one-fourth of the Second 500’s overall growth.

The 441 remaining merchants, including 25 e-retailers that dropped down from the Top 500 Guide, grew sales 13.1% to $3.70 billion from $3.27 billion.

This group of fast-growing merchants is overwhelmingly of the web-only variety—more than 64% of them sell exclusively online. Many are also relatively new to e-commerce; Nearly half of them began selling online in 2007 or later.

The newcomers tend to focus on offering one-of-a-kind merchandise, compelling content and a personal touch. One such merchant is The RealReal Inc., No. 554 in the Second 500 Guide. The web-only retailer of used luxury goods, which launched in June 2011, brought in an estimated $15.1 million in 2012, and projects generating around four or five times that revenue in 2013, says founder Julie Wainwright.

TheRealReal emphasizes to shoppers its careful selection of high-quality products in order to keep them coming back, she says. “Because our focus is on luxury items, it’s important that we curate the items and authenticate each one,” she says. “We only take things that are 10 years or younger so they are current and shoppers can wear them today.”

To speed the authentication process, TheRealReal developed its own mobile app in-house, Wainwright says. With the app, a consumer that wishes to sell, for example, a Gucci handbag on RealReal.com can take a picture of the bag and upload a short description. She then prints out a bar code and shipping label, and mails the item to the retailer’s warehouse. There, TheRealReal staffers verify the bag’s authenticity before listing it on the site. Once sold, TheRealReal ships it to the buyer from one of its warehouses in New York or San Francisco, and the seller receives 60% to 70% of the sale, depending on how many items she has listed in the past, the company says.

If a seller lives in a major city, the mobile app also allows her to see whether one of TheRealReal’s full-time merchandise managers is located in her area at any given time. If so, she can request “white glove service,” wherein the manager will go her home, pick up the item and ship it to a company warehouse for free. “It’s kind of like the Uber taxi service, but for luxury goods” Wainwright says.

The 2013 Second 500 Guide is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the brand-new 2013 Second 500 Guide is available here.

To see all past Insider stories click here.

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