'The second-hand market isn't going anywhere': Fashionphile founder Sarah Davis on the evolution of luxury resale

Luxury brands typically want little to do with the second-hand market, but resale companies like Fashionphile are slowly winning them over.

Founded in 1999 by Sarah Davis, the company invites customers to drop-off top-shelf accessories at one of its physical locations, where Fashionphile will buy them upfront. Trained Fashionphile employees verify the authenticity of the item before it's sold online, and the original owner gets a piece of the pie -- often a big one.

A 70-30 split is common, with Fashionphile taking the smaller cut, Davis said. "But if the velocity of sale will be quick or if it's a super high-dollar item, or it's very popular, we'll give you much more," Davis said on this week's episode of the Glossy Podcast.

Fashionphile limits its inventory to 51 luxury brands, many of which were once worried about resale tainting their brand image -- second-hand isn't exactly synonymous with luxury, after all. What's more, there's been concern from full-price retailers that the resale market will bite into their revenue.

In the last few years, Davis said, several luxury companies have come around.

"I think the brands have recognized [the resale market] isn't going anywhere. And so, more and more, they're thinking, 'What do we do about this?' It's led to some really amazing conversations we've been able to have with them. They're curious," Davis said.

One thing that helped Fashionphile's image: a recent minority stake investment by Neiman Marcus, which now hosts some of Fashionphile's drop-off locations.

More than 20 years after opening in Beverly Hills, Davis pointed to "a 50% growth rate year-over-year, consistently." The company's since opened locations elsewhere in California, as well as in New York and Texas.

Davis talked about the importance of shipping products in unboxing video-friendly packaging, the trick to selling used shoes and the teenage boys who covet Hermès belts.