Fashion Project Hopes to Be Next Big Thing in Boston Re-Commerce

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On the fashion front, there’s been a boom over the last six months or so in websites for reselling used clothing, notes Anna Palmer, co-founder and CEO of Fashion Project, based in Boston’s Leather District.

“Boston has somehow created this little niche in the world of creating really successful re-commerce sites that are innovative and doing it on a big scale—and we hope to be the third peg of that,” Palmer says.

The other two “re-commerce” pegs are Gazelle.com, the Boston-based site for recycling electronic gadgets, and thredUP, the Cambridge, MA-founded and now San Francisco-based platform for shopping and selling used children’s clothing.

Fashion Project (previously called Swapfish) is taking a different approach. Palmer and co-founder Christine Rizk got the idea in a tax class at Harvard Law School (yup, you read that right), when they learned that $52 billion worth of non-cash goods are donated each year in the U.S.

Both had startup- and non-profit-world experience and had seen the struggles that charities face in collecting cash donations. They wanted to create a platform where consumers could send in their unwanted clothing items. It’s the concept of a charity thrift store without the overhead costs of the brick-and-mortar versions.

Palmer and Rizk started plugging away on the startup in spring 2011 (opting for entrepreneurship over full-time law careers) and have just begun to open their online store up to shoppers. They’re focusing on Boston right now, particularly with this week’s Boston Charity Fashion Week, encouraging consumers to donate clothing to the online site and select offline sites in exchange for rewards at local retailers. It’s also curating a handful of items each day for a daily flash-sale-style sale.

The startup—which now consists of five full-timers, two interns, and two part-timers in Chicago—has raised $200,000 in seed funding and is hoping to close another $500,000 in the next few weeks. It is eyeing New York, Dallas (big charity event market there), LA, Chicago, and DC as other potential cities to focus on.

Fashion Project advises donors to send in something from retailers like J.Crew and Banana Republic and up (though it’s been getting many items from high-fashion brands, the pair says) and that could resell for at least $40. The company provides a pre-paid shipping package, and it takes a 40 percent cut on the goods sold while donating the other 60 percent to charity. (Shoppers can select which one it goes to.).

Have donors understood the message of what items qualify? For the most part, though the very first box they received contained “t-shirts, Christmas ornaments, and porcelain figurines,” Palmers says. They’ve since been more explicit about what they’re looking for

As for the goods that aren’t up to par, Fashion Project passes those along to partners like the Big Brothers Big Sisters. Other charities they’re focusing on right now include the March of Dimes, Build, and Dress for Success. The site also allows shoppers to suggest the charities they’d like their donation to go to; it takes about a week for that charity to get activated on the platform, as Fashion Project needs to verify that it is in fact a 501 (c)(3).

“Our goal is to have every charity up there,” Rizk says.

For marketing and customer acquisition, Fashion Project looks to its charity partners to attract donors. “They’re really creative,” Rizk says. ”It’s great to see how they already work with their donor base.”

The charities are also getting the word out about shopping on Fashion Project’s site. Palmer says the incentive for consumers to help a charity of their choice is the potential to buy a clothing item they otherwise wouldn’t have. “It’s a really cool way of people experimenting with brands and luxury fashion items,” she says.

“You can open up your closet and look at all the charities out there and say ‘I want to support this one,’’’ Palmer says. An item originally purchased for about $400 could feed a family of four for a couple of months when resold through the Fashion Project, Palmer says. “The impact is gigantic—that’s the part of it that makes us really excited.”

Sites like Rue La La and Gilt Groupe have opened up those types of brands to consumers who may not have bought them without the steep discounts, and now the clothing market is starting to see the effects of that, Palmer says.

“We see us fitting into that puzzle of once people buy that, what do they with it?,” she says.

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