The way secondhand retailers have traditionally resold items online often went something like this: take a photo of a product, list it on a website, suggest a price and wait for a customer to show up.
But a new D.C.-based startup called Upright Labs is changing all that with technology that exposes secondhand goods to more potential customers by listing them on several online marketplaces, like OfferUp, Facebook, Goodwill and eBay. Using the software, secondhand retailers can realize the true value of an item by selling it to the shopper willing to pay the highest price, whether online or in store.
The company, led David Engle and Jackson Geller, has been in growth mode since its founding in 2017 and now ships and lists tens of thousands of secondhand items per month through its software for customers like Goodwill and Salvation Army.
Along the way, Upright Labs’ customers are streamlining their supply chains, making their in-store operations more efficient and cutting down the time it takes to list, describe and photograph items online.
“Now in one software, they can manage everything from photography to listing to relisting to financial reporting and in-store management,” said Engle, 25. “It’s a tool that the buyer never knows is there, only the seller knows it’s there.”
Engle declined to disclose revenue, but said that by the end of 2019, gross merchandise volume will exceed $20 million for items sold through Upright Labs’ software.
Upright Labs is capitalizing on the exploding secondhand goods market, as consumers increasingly buy and sell used clothing and items on platforms such as ThredUP and Poshmark.
According to a 2019 ThredUP resale report, the total secondhand apparel market is expected to double to $51 billion over the next five years. The study also found that, to be successful, resellers must be efficient with photographing, listing and inventory management.
Engle sees no signs of the market slowing down, as Upright Labs brings on new customers, especially mom-and-pop retailers that haven’t yet transitioned to e-commerce operations.
“It’s bringing them into the next generation,” Engle said. “For a lot of secondhand retailers, their focus has always been retail stores.”
Hitting on an idea
The idea for Upright Labs came about when Engle and Geller were running their previous software company, Masquerade, which bought secondhand goods from wholesalers and then resold them online for a significantly higher price.
“If you had a pair of Birkenstock sandals, we’ve seen a lot of stores try to sell them in store for $4 or $5,” he said. “If you sell them online secondhand, you are going to sell them for five to six times that price.”
Once Engle and Geller identified that the inventory was coming from the likes of Goodwill and Salvation Army across the U.S., they knew there was room for a business.
“It was really the ‘aha’ moment of being able to understand what the value potential was that these vendors were missing,” he said.
The pair sold Masquerade to a venture-backed firm in 2017 and invested an undisclosed sum to start Upright Labs that year.
The company currently has five employees including Engle, CEO, and Geller, CTO. They plan to grow its headcount by 50 percent for business development, outreach and content creation teams by the end of 2020.
How it works
Upright Labs offers products to market secondhand goods to potential customers, along with a live chat feature that allows clients to communicate with the company.
The first is “Upright Local,” a web-based app that allows store employees to take pictures of items ranging from apparel and footwear to couches, desks and dressers, and add descriptions, prices and pickup locations.
As these companies continuously list and sell items on the app, Upright Labs analyzes how many views each piece of merchandise is getting from consumers. Based off that, the firm provides suggestions for new pricing and product descriptions to help clients realize the highest value for the merchandise.
The second product is “Upright Lister,” a web-based application that handles everything from finding an item that a client wants to list online to shipping merchandise out to the end consumer.
Both products are subscription-based, ranging from a few hundred to a few thousand dollars per month.
“We understand that if you are a mom-and-pop with only 200 items in inventory, you can’t afford thousands of dollars,” Engle said. “We do our best to bring them on at an affordable price.”
Separately, “Upright Services” is a consulting service designed to help companies that run warehouse operations and retailers with at least three store locations.
These services help retailers optimize their e-commerce operations and ascertain how much warehouse space they need, what items should be sold online, what should be sold in stores and what inventory to purge.
Born an entrepreneur
Building businesses has been in Engle’s blood since childhood.
With help from his father around age 5, he started running carnivals to raise funds for his synagogue in northern New Jersey. By age 14, Engle founded a nonprofit called Carnivals for Children on Wheels that brought free carnivals to children with disabilities or from economically disadvantaged backgrounds.
The entrepreneurial bug stuck, and Engle has since run a slew of businesses including a quesadilla food truck at the University of Maryland, where he graduated in 2015, as well as Startup Village, an affordable housing concept for UMD student and alumni entrepreneurs.
He met Geller at Startup Shell, a student-run incubator at UMD. Geller was equally as business-minded in childhood — he built his first computer at age 12 and began coding at age 15. The two men kept in touch over the years, and co-founded Masquerade in 2017.
Engle said he’s applied the lessons he’s learned from each of his businesses to the growth of Upright Labs.
“They teach you a tremendous amount, to make sure you can learn from the failures – and gain insights from the successes,” he said.
