Launched in 2011, Closet Rich has gained perhaps more publicity than its founder, Elizabeth Kott, ever intended. Making use of her clients’ bulging wardrobes, Kott repurposes their pieces online.
Starting an online retail business doesn’t mean spending millions on buying stock and implementing the most complex software systems in order to be profitable. Rather, some lateral thinking and playing to one’s own strengths is all a person needs to get going, as demonstrated by Elizabeth Kott’s specialist start-up concept, Closet Rich.
Kott cut her teeth in the world of digital branding, online fashion and editorial support when working for designer fashion label Rachael Zoe. However, this was just the first stepping stone on the path to creating her own unique offering online.
“I was part of the team that launched Rachael Zoe’s online newsletter, The Zoe Report,” says Kott. “Being in an editorial space, you’re constantly being approached by various brands that want you to try their products. My coworkers and other peers were all in this editorial and stylist space – there was a constant influx of items coming in and I saw a need for an outlet of those items.”
In 2010, Kott found herself between jobs and wasn’t keen to take on another role unless she truly loved it. One day, she was helping her grandmother to move, sorting through all the odds-and-ends that a person tends to collect in their home, when she realised the core motivation for Closet Rich.
“My grandmother had all of these things and not enough space to hold the things, and all of a sudden her stuff was owning her instead of the other way around,” Kott recalls. “That’s how Closet Rich was born.”
Kott realised that the issue of closet space, and the problem of what to do with all the extra ‘things’ people tend to collect, is a common problem. She also wanted to be able to employ all her hard-earned experience in fashion, digital branding and social media.
“I wanted a really seamless, upscale way to get rid of these excess items, with a real focus on customer service,” Kott explains. “I wanted a trusted source, and I thought, ‘Wouldn’t it be cool if there was a place where everyone who worked in the fashion industry could sell their items?’ It wouldn’t necessarily be talked about. It would be anonymous – but the people who are in the know, the ‘dialled-in’ shopper would know that, ‘OK, this is where the girls who work in fashion are selling their items.”
It was at this point that Kott began to discuss her idea with a few of her old colleagues and friends working in the fashion industry. To her delight, many of these liked the idea, and these people became her first ‘clients’, offering up their excess pieces to donate or sell to Kott for her store’s launch. She also began going through the motions of setting up the website itself.
“Aside from buying the URL, I also spoke with an intellectual property lawyer. The name ‘Closet Rich’ so perfectly identified the concept that I wanted to make sure all the legal mumbo-jumbo was out of the way from the get-go,” she says. “I also consulted with a business manager. For an entrepreneur, I think it’s really important to understand where your strengths and weaknesses lie, and for me, handling other people’s money isn’t a strength – it’s just not something I should be doing. So I ended up hiring this business manager to help me figure out how I was going to handle payments and how those processes would be as seamless as possible on my end.”
In appraising various content management systems (CMS), Kott arrived at Goodsie as a result. She had some experience with the platform previously and loved how customisable the product is without having to handle any coding herself. It also helped her to capture the visual aspect of what she wanted in a webstore while also providing adequate tools from its back-end.
“From the point of filing the business paperwork, designing and setting up the site took me from May to August, working on it daily,” she says. “That included getting everything from making sure the site’s verbiage was correct to making sure the photos were the best they could be.”
Closet Rich was launched on August 8th 2011, with around 50 products available for sale. Now, Kott is able to feature closer to 300 items at any given time.
“The entire inventory is kept in my home,” she explains. “I’m lucky enough to have a live/work space. The SEO for the site is something that I had a good handle on already, so that hasn’t been too difficult. I also recognise the fact that I could be doing more work in digital marketing if I wanted to increase Closet Rich’s traffic, but that was never the point of the store in the first place. I like it to be this little. hidden secret – this little gem on the internet.”
Kott now manages clients in Los Angeles and New York city, who all approach her for advice on what excess items they should sell to her, and what is best to hold onto. However, Closet Rich can potentially supply those pieces to customers anywhere in the world – and she doesn’t see demand for what she calls “peer-to-peer consignment” shrinking.
“I see a really strong trend emerging, which has occurred as a result of online flash sales. I think flash sales really took over some people’s avenues of consumption. People might have actually ‘over-consumed’ because of that, and now they’re looking to get rid of items,” Kott explains. “I think Closet Rich is a very conscientious way of doing things, because you’re repurposing – you’re reselling – and you can also purchase things at great prices.”
Kott has garnered some notoriety with her online retail concept, and now there are some competitors emerging in the field. However, the style and size of her operation means Kott doesn’t really need to worry about them.
“I have access to luminaries within the fashion industry who are my friends and my counterparts. These people come to me to sell their items, and I go into their homes to help consult with them about what they should keep, what they should sell and what they should donate,” Kott says. “So it’s more of a white-glove, personal service that I provide and I think what comes away from that is a really beautiful, curated selection of items.”
Seeking more information on how to get an online retail venture off to a flying start? See our complete A-Z guide, Power Up: The Online Retail Entrepreneur’s Guide.