- Former Snap chief strategy officer Imran Khan’s e-commerce startup Verishop said it would start letting third-party sellers sell directly on its platform starting in September.
- The idea behind the self-service option is to let Verishop expand to new product categories without spending more on inventory.
- The company has raised an additional $20 million for a total of $50 million, he said.
- Visit Business Insider’s homepage for more stories.
Former Snap chief strategy officer Imran Khan’s e-commerce startup Verishop is opening the floodgates to third-party sellers.
The year-old e-commerce marketplace said it would launch a self-service option called Verified Shops that will let third-party sellers to sell directly on its platform starting in September. The company said this move would let it expand to new product categories like wellness and kids and grow sales without spending more on inventory.
“Our first year, we were focused on building a lifestyle shopping platform that has best-in-class convenience and customer care, because that’s table stakes for e-commerce companies,” Khan said. “Verified Shops gives companies like direct-to-consumer brands and small businesses another way to reach new customers on a platform where their brands will be safe and appreciated.”
Verified Shops allows Verishop to scale while managing costs
Khan has pitched Verishop as a higher-end alternative to Amazon by focusing on specific categories like fashion, beauty and wellness and buying products wholesale from brands it vets. It has differentiated itself with an emphasis on quality, by buying products wholesale from vetted brands, warehousing them, and reselling them itself.
It’s expanded to more than 600 brands from 180 at launch, including home goods and electronics and lables like Diane von Furstenberg’s DVF, Finders Keepers, and Ursa Major. Verishop said it would take an unspecified cut of purchases made through Verified Shops.
But by opening itself to third party sellers, Verishop may expose itself to problems that brands face on other open e-commerce platforms, such as discovery challenges, counterfeit goods, and unverified sellers.
Khan said Verishop would continue to use a mix of tech and people to help products get discovered, and that it would vet sellers to keep out counterfeit goods and unverified third-party sellers, similar to how Apple does with its App Store. Sellers will be authorized to sell the products they list.
“We have and will always be committed to keeping counterfeit products or illicit goods off our site,” he said. “All Verified Shops partners will also need to uphold the standards we have with fast free shipping and free returns.”
Verified Shops is also aimed at direct-to-consumer brands, which Khan said prefer a low-touch, self-service option. Verishop has been offering marketing and other support to DTC companies like Material Kitchen, Gravity Blankets and Public Goods.
Verishop has raised an additional $20 million
The pandemic has accelerated e-commerce adoption, with 7.4 million new people expected to shop online in 2020, according to a new report from eMarketer. Verishop’s revenue grew 30% and 33% month-over-month in April and May 2020, Khan said.
The company has also raised an additional $20 million for a total of $50 million, Khan said, without identifying the investors. The company raised $12.5 million in October from Rakuten Ventures, Lightspeed Venture Partners, Madrona Venture Group, and the real-estate company Simon Property Group.
A self-service marketplace will help Verishop compete with other e-commerce companies including Amazon, Alibaba and Etsy, but success will depend on how well it picks and vets sellers, said Forrester analyst Sucharita Kodali.
“The bigger question is, do they have a shot at success?” Kodali said. “How do they differentiate? With good product, with quality production, with something that resonates with customers who are interested in the category, and with something new.”