Fifth Avenue Freeze-Out

Two UVic MBA students want to outfit their customers like Manhattan fashionistas for — literally — pennies on the dollar.
Jessica Kerr and Casey Rollins run, a penny auction site for handbags and designer fashion accessories made by the likes of Louis Vuitton and Gucci and sold at flagship boutique shops in New York, Paris, Toronto, and other global fashion capitals.
“I’ve loved fashion, particularly handbags, for as long as I can remember,” says Kerr, 24, a McGill graduate who co-founded the business along with her boyfriend David Gustavson. “But with a student budget and past bad experiences with eBay knockoffs, it seemed impossible to buy an authentic Hermes, Chanel, or Dior at a great price.”
Unlike eBay, Riffington (Kerr, who moved here from Ottawa, says the name is inspired by her favourite house in the Uplands) operates on a pay-to-play basis. Instead of bidding directly for an item, users purchase bids (at 99 cents apiece) which they expend in a timed auction. Each bid increases the price of the item by 1 cent and shortens the countdown clock by 30 seconds; when time is up, the highest bidder gets the item. But like eBay, the site offers a “buy it now” feature, allowing bidders to purchase the item at full retail price less the amount already bid.
There’s no reserve price, so items usually sell at ridiculously low prices. Kerr says $11 has been the highest winning bid since the site launched in May. Because Riffington’s revenue depends on the number of bids sold, and not the price items sell for, she admits the site’s long-term viability is uncertain at best.
{advertisement} “We win some [auctions], we lose some. It’s really hard to predict,” says Kerr, who makes regular trips to Vancouver to purchase stock, for which she pays retail. The glamorous brands of Fifth Avenue are highly protective of their images and refuse to deal in wholesale, she says.
The key to turning a profit, Kerr says, will be attracting enough users. She and Collins have spent very little on marketing, so far, although /A Channel did a piece on Riffington that brought in a crop of new users. Kerr believes plenty more are out there, as women are an untapped market for penny auction sites.
Ironically, Gustavson “was instrumental in coming up with the idea for this women’s wear site,” she recalls.
“He was reading an article in Time about the new pay-to-play platform and how the market was saturated with products geared toward men, like electronics. I guess you could say the light bulb went off and, soon after, Riffington was born.”