According to Business Insider, Postmoda CEO Adarsh Alphons is tackling retail’s $25.1 billion returns problem by launching a marketplace for luxury returns this week. His company previously operated as Wardrobe, a peer-to-peer rental platform that raised $5.6 million from investors including Slow Ventures before pivoting. After testing the concept by selling millions of returned items on Poshmark and eBay, Alphons secured an additional $200,000 in January 2023 from existing backers like Opendoor’s JD Ross. The move addresses an industry where 20% of online purchases get returned, with over 8 billion pounds of returns ending up in landfills annually.
The scale of the returns nightmare
Here’s the thing about e-commerce returns that most people don’t realize: when you send something back, it’s probably not going back on the shelf. The logistics and labor costs of processing returns are so high that most retailers just dump them. We’re talking pallets sold to liquidators, shipped overseas, or straight to landfills. And brands absolutely hate talking about this – Alphons said nobody would even acknowledge it as a problem when he started digging. They just treat it as “the cost of doing business” while 8 billion pounds of returns clog landfills every year. That’s insane when you think about it.
From rental failure to returns solution
Postmoda’s pivot is actually a classic startup survival story. Alphons’ first attempt, Wardrobe, used dry cleaners as middlemen for clothing rentals but couldn’t scale. So he took a step back, looked at the market, and noticed this “huge slush” of returns growing because of e-commerce. Basically, he found a bigger problem to solve. The fact that he tested the concept by actually selling returned items himself shows he’s not just theorizing – he proved there’s demand before going back to investors. And his existing backers were apparently thrilled he found something “adjacent” that could actually generate revenue.
Why this might actually work
The timing here is pretty interesting. We’re seeing this perfect storm of high e-commerce return rates combined with growing consumer acceptance of secondhand luxury. People are more comfortable buying pre-owned designer goods than ever before. And retailers are getting increasingly desperate to find solutions that don’t involve eating massive losses or contributing to environmental waste. Postmoda is essentially creating a luxury outlet channel specifically for returns – which is smarter than trying to compete with the general secondhand market. They’re focusing on a specific pain point rather than trying to be everything to everyone.
The road ahead
Alphons is planning a Series A raise next year to scale up, which makes sense because building relationships with retailers and developing the tech platform isn’t cheap. But here’s the real question: can they actually get enough luxury brands on board? High-end retailers are notoriously protective of their brand image, and having their products show up in a returns marketplace might make them nervous. Still, the economics are compelling – $25 billion in processing costs is a massive incentive to try something new. If Postmoda can crack the brand partnership challenge, they might actually have a shot at solving a problem that’s been haunting retailers for years.
