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March 07, 2006
Bag Borrow or Steal
This time it's not my horrible pun in the headline-- that's the name of a Seattle startup wants to be the Netflix for ladies' luxury goods from Tiffany's jewelry to Chanel handbags. You pay a monthly fee, about $20, $50 or $100, and get to "rent" handbags or jewelry and keep them as long as you like. When you're sick of an item, you mail it back and get a new one. Investors aren't put off by the mouthful of a name: The company is announcing an $8.25 million round tomorrow. They’ve raised almost $12 million to date.
I think this is a very clever idea and ties into larger trends of sharing everything via the Web; not just amorphous things like digital music, but actual goods. What's more-- this is a new business idea that could only happen on any kind of large scale over the Web. It's not just an existing concept like content, classifieds or catalogs moving online. Every girlfriend I polled exclaimed things like, “I love this company!”
Then, thought about the economics and got less and less enthused.
How big can this market be? $100 every month is pretty steep for teens to rent handbags and more affluent ladies could easily afford their own Chanel number. (Or at least a NYC street corner knock off, shhhhh.) And keep in mind: Couture items carry a steeper add on price per month—$200 or more on the bags I liked. “Our customers don’t tend to be people who couldn’t afford the bag they’re carrying, they want selection,” countered Adam Dell, of Impact Venture Partners, one of the investors in the deal. “Imagine having a virtual closet with a wider selection than any one individual could ever buy.”
It’s a nice idea. I'm plenty clothes obsessed. And Lord knows my journalist salary doesn't allow for an endless supply of designer handbags. That’s to say nothing of getting it home: Before he would marry me my husband made me promise I’d never spend more than $400 on a pair of shoes. In his mind, I’m sure that extends to handbags. But even he’d probably opt for me to save up for one really nice bag I love and could pull out year-after-year over tossing away $100 per month on a rental. And with $1200 per year, you could buy a pretty nice one every year.
It’s the same thing with Netflix and its copycats. We’re paying the equivalent of $50 to rent a movie because we’re too busy to watch even one a month. That’s why we’re going to cancel our subscription…..eventually. Why eventually? Because we keep forgetting and at just $15 per month, that’s a little easier to stomach.
Dell guided me to the testimonials on the Web site and I have no doubt there are a subset of women who would use and love this service. A quick poll to my bag obsessed friends just couldn’t find any. And we all fit in the target demographic.
Bag Borrow or Steal says its service is like borrowing stuff from your girlfriends. One important distinction-- your friends don't charge you a $100 lending fee, plus shipping. This “borrow” means rent and “steal” means buy it if you decide not to send it back. Not quite the same…
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The economics suck as far as people who use one luxury bag a year. But if you already buy a new bag every month, it probably works out pretty well.
I think it's insane to spend that much money on anything you wear, but I guess I'm not in the target market!
Posted by: Chris Yeh at March 8, 2006 08:19 PM
$100-$200 a month seems too much... but the basic membership of $20 sounds like a pretty decent deal-- if you exchanged once a month, you could use 12 different bags in a year for only $240. Sounds like fun :)
Posted by: Dorothy at March 10, 2006 04:56 PM
I don't like the idea of having to pay for a monthly membership. the competition of Bag Borrow or Steal is frombagstoriches.com and they are much more customer friendly. You don't have to commit to a membership, so you can get a bag for a special occasion, send it back a week later, then rent again 4 months down the line. Since there is no commitment, you aren't throwing out $1200 (or more) a year for a bag you could have just purchased on your own.
Posted by: ellie at April 13, 2006 02:35 PM
Another customer just sent this link to me! Thank you for your kind comments Ellie! I'm glad you are enjoying our service. We really strive to be answer for not just the every day bag addict, but the occasional one as well. For us it's really about giving the customer the exact experience they desire.
Posted by: Erin at April 17, 2006 03:45 PM
Great idea!!i don't need waste my money now,who can tell me where is it?
Posted by: Joyce at June 20, 2006 10:11 PM
Well there are about 3 of them now, From bag to riches, Rentfame.com and bagborroworsteal.com.
Rentfame says they can help you make money with your bags, Is it a good idea to send them your bag?
Posted by: maryann at June 21, 2006 07:39 PM
I joined and paid 20 bucks for *3* months, not one, and I'm borrowing a bag for 20 bucks a month. So I think you exaggerated just a little. Plus, I get free shipping for 2 months, I'll have the bag for a little while and then give it back, cheaper than buying the bag. Go to the website and see.
Posted by: Kia at December 4, 2006 03:25 PM
Don't you have to pay a monthly membership fee, plus a daily or monthly rate, plus shipping? Sounds very steep to me...It ends up being a lot more than $1200 per year when you calculate all of those costs.
Posted by: Lara at December 6, 2006 09:14 PM