While pursuing an MBA at UCLA in 2006, Ben Hemminger joined his sister-in-law, Sara, to expand her business of buying and selling Louis Vuitton bags on eBay. Running Fashionphile LLC from his home at night, Hemminger turned the company into the undisputed authority for making luxury handbags accessible. Realizing his business was the ultimate education, Hemminger left school after the first year. He focused on developing the Fashionphile brand, building a sales channel that includes a custom e-commerce site and aggregating a staff of experts to handle dozens more luxury brands. With Hemminger at the helm, this tightly run family company has organically grown to different locations within California.
By buying luxury purses from shoppers and reselling them to other shoppers on the secondary market, Fashionphile is able to offer lower prices, more payment options and a greater diversity of inventory than the luxury brands themselves ever could. Luxury purses are expensive, so one of Fashionphile’s main challenges has been to obtain funding. Hemminger developed a perpetual inventory fund concept, where individuals invested money, and the company promised an annual return, using inventory as collateral. The money was strictly dedicated to buying inventory. In so doing, Fashionphile had enough capital to sustain operations without granting ownership to individuals outside of the core group of founders. As the company expanded, Hemminger opted to skip the venture capital route and grow the company organically. Today, Fashionphile does not have any debt outstanding to third parties.
Quality and trust are essential in the luxury market. Fashionphile spends months training individuals to learn the art of authenticating luxury purses to ensure they only sell the real thing. Their staff is predominantly female. By offering flexibility, it helps retain them. Through the company’s innovative technology, employees can start or finish work at home, making it easier for parents to cater to their children’s schedule.
Since auctioning handbags is part of Fashionphile’s heritage, they’ve used that aspect as a way of giving back by donating coveted purses, which fetch high prices, for charity auctions.
Fashionphile clearly has fashion in the bag! Watch them expand into other luxury markets such as timepieces and jewelry in the future.