How ReUp’s William Lewis Is Using Computer Vision to Transform Luxury Resale
The Transparent Collective alum on luxury resale and the value of non-dilutive accelerators.
By Jessen O’Brien
If you’re in the market for a secondhand shirt or vintage platter, you’re in luck. From eBay to TheRealReal, there are dozens of brands that let users buy and sell secondhand goods online.
But what if you’re looking for luxury goods, like a watch or fine jewelry? Authentication becomes critical, percentage-based platform fees can quickly become exorbitant, and you might think twice about handing an item worth tens of thousands of dollars over to FedEx.
These are exactly the kinds of problems ReUp aims to solve. Cofounded by high school best friends William Lewis and Groesbeck Parham, ReUp is a resale platform designed specifically for luxury watches and jewelry.
“There really isn’t a great marketplace for trading, buying, and selling jewelry,” says Lewis. So he and Parham set out to build one leveraging Parham’s knowledge of the industry and Lewis’ background in business and data science. (Parham is a graduate of the Gemological Institute of America; Lewis holds an MBA from Wharton.)
Last September, Lewis and Parham joined the Transparent Collective’s Batch 6 to learn from experienced entrepreneurs, make connections, and prepare for fundraising. “We looked into a few [accelerators]; we only decided to pursue Transparent Collective,” says Lewis, who notes that “the Black founder experience is just different. It’s important to have a space that’s dedicated to talking about issues that are germane to that experience. And that’s exactly what I see the Transparent Collective as.”
We talked with Lewis to learn more about his experience with the Transparent Collective, what sets ReUp apart, and the role cryptocurrency plays on the platform.
Tell us about ReUp. What inspired you to co-found the company?
I was working on a masters in data science [when Parham] told me about this watch company that he was running. The margins were particularly big, but was really interesting was the idea that you could programmatically authenticate watches using some tech that I could develop.
What does programmatic authentication entail?
It’s basically computer vision. Essentially, we’re using a multi-stage CNN [Convolutional Neural Network] model.
The first CNN takes the score of a particular part of the watch — call it the dial — and it might also take the score of the movement. And then we have a second model that might take the score of the case as well as the clasp of the model. You’ll have a third model that might take the score of the engraving of the serial number. Those scores are combined to give us a total accuracy score of the authenticity of the watch.
What else sets ReUp apart from other resale platforms?
We built ReUp from the ground up for watches and jewelry. Our average selling point is around $5,000. If you’re buying a $5,000 watch on eBay, it’s going to cost you about $645 in fees. If you buy it on our platform, it’s going to cost you anywhere from $100 to $345 — and that’s primarily because of our payment stack, which is kind of like ACH.
Focusing on jewelry allows you to do a lot of other things. Our authenticity process is very different — we’re authenticating down to the movement level of a watch, for instance, which isn’t done on any [other] marketplace. And there are things like shipping; if you’re selling a $2,000 to $20,000 watch and you need to ship it from your local FedEx, that might cause some anxiety. We actually pick up the item, if you opt for that.
What was being a part of Transparent Collective’s Batch 6 like?
The experience was awesome. It was great to get advice from seasoned entrepreneurs who had raised capital and were building great products, like James Norman and Aaron Samuels, product people like Rohini Pandhi, and angel investors like Decarlos Love.
I got advice from one entrepreneur around evaluation. We were talking about a number that we’d been steered towards by some VCs. And he clearly — without standing on form — let us know that’s too low, it’s below market. Without having that experience, we would have been raising money at a much lower evaluation than we should have. That kind of advice is just invaluable.
What’s your favorite luxury watch at the moment, and why?
My favorite watch is a Milgauss. The name has become a bit of a misnomer. It literally translates into 1,000 gauss — just like the measurement of magnetic field that it used to protect watches from when it was originally created in the 1950s for engineers and scientists.
It had this case, if you can imagine, on the back of the watch made out of soft iron that acted like a Faraday cage. But now, magnets are everywhere and they’re even more powerful. They’re in our hard drives, our speakers, our iPads. So what Rolex did is essentially make the parts out of non-ferrous metals that aren’t affected by magnetic fields.
So now, I can wear my Milgauss forever and not worry about it losing time.
How has the pandemic affected the resale market for luxury goods?
[We agree with] the consensus that the pandemic basically forced consumers to become more comfortable buying items online.
We think, however, that this is particularly important for big-ticket items. We see online becoming the preferred way that young people and people of color shop for luxury.
No offense to sales people, but I don’t think my generation finds them particularly useful. You go into luxury stores that are super snobby and it just kind of puts you on the defensive. The pandemic coupled with these kinds of dynamics made it clear that online shopping was the way to go not just for random things that you’re getting from Amazon, but also for luxury items.
I understand you plan to launch a premium subscription service.
That’s something we’re really excited about. You see lots of people looking for alternatives to the bigger marketplaces that are out there.
When those big marketplaces first launched in the ’90s, they could get away with charging 10% for toys and 10% for a luxury watch. But that’s no longer the case. A 10% fee, coupled with a 2.99% payment processing fee for a $5,000 item or a $2,000 item, is just exorbitant. Particularly for power users — the people that you’ve established a relationship with who are buying or selling regularly on your platform.
Power sellers and buyers make up the majority of the revenue on eBay. The only way that you can get to a 300, five-star reputation on eBay — which is what you need to make people comfortable buying from you — is if you’ve sold or bought a ton of items. If you’ve done that you’ve already created some trust with the platform, so it shouldn’t charge you as much.
In fact, I’d say charge [you] shouldn’t be a percentage-based fee at all. Percentage-based fees are created to address the risk associated with a high-priced item. We think that doesn’t make sense for repeat buyers or sellers. It’s actually kind of ridiculous that they’ve been able to get away with it for so long.
Our subscription service is essentially a product built with that frequent seller, collector, or flipper in mind. We think that a subscription model better serves them and us in the long run. A user would essentially pay a flat recurring fee, which in many cases would be a lot less expensive than paying a 10% VAT fee plus a 2.9% payment processing fee every time they do a transaction.
What else does ReUp have in the works?
We are using crypto to empower brands with residuals from secondhand jewelry sales. We think it makes sense to cut brands in on the secondhand market sales for a lot of reasons. They can play a valuable role, particularly when you’re dealing with high-priced luxury items. That’s kind of our vision for using NFTs, if you will.
Imagine a digital twin in the form of a card being issued for every luxury item that’s sold on our platform. That digital twin has information — the image metadata, service records, and ownership changes — all stored on a chip. [That information] is published to the blockchain ledger. You can use certain coins or tokens that are created particularly for royalties. In our case, whenever a brand item is sold on our platform, not only would we get paid a certain percentage but that brand would get paid a certain percentage as well.
What advice would you give to other entrepreneurs?
Apply to TC.
Dilutive accelerators can work for businesses that have a very clear proposition, that are easily marketable, or that stand up in a demo day. If you’re not that, then that dilutive accelerator may not be the best choice for you.
[A dilutive] accelerator will take equity. They’ll give you advice in exchange for 7% of your company. That’s a lot of value assuming the company is going to go on to be worth a decent amount of money, right?
If you can find a non-dilutive accelerator that still gives you kind of awesome advice, that’s what I’d recommend. TC depends on [corporate sponsorship]. That’s a more palatable value proposition for 80% of entrepreneurs out there. And when you don’t have to pay for the program initially, it creates a different kind of bond [with the program].
You’re invested in paying it forward.
Yes, exactly.
