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Here is something you may not know about me: my first job was as a musician.

I played in the pit orchestra for the Iroquois Amphitheatre’s production of Cinderella in the summer of 2007. I earned a little over $6 an hour and somehow even accrued retirement benefits. What a time to be alive.

Louisville’s summer humidity sticks to your skin like a bad habit, and the symphony of cicadas prevents you from ever having a quiet moment. But down in the air-conditioned pit, tucked beneath the stage, I had the time of my life hearing the audience “ooh” and “aah” whenever the live horse was brought on stage for Cinderella’s entrance in her grand carriage.

I bought my violin through a reseller. My teacher contacted a violinist who curated a small selection of instruments. She played each one for me behind a screen so I would not be influenced by how it looked. I narrowed it down to two, then played them myself before choosing the one that felt right.

As the holidays approach and shopping ramps up, that experience has been on my mind.

Before I get into why, a quick note on this corner of the internet. The year is winding down, but it has never been busier here. We have officially surpassed 500 subscribers (woo!) and are well on our way to 600. My goal is to reach 1,000 by the end of February, and I would love your help getting there by sharing this newsletter. So many of you have already championed it by adding me to your referred newsletters, and I am genuinely grateful.

Help me grow this corner of the internet. Refer this newsletter to three founders, and I will select one for a complimentary deck review

Now onto today’s topic: what the rise and retrenchment of recommerce can teach us about where ecommerce innovation actually works, and where it quietly breaks down.

Holidays mean shopping and ecommerce.

It is one of the most visible categories in tech, and paradoxically one of the most unloved by venture capital. Despite accounting for roughly 15% of total US retail sales, ecommerce marketplaces receive a disproportionately small share of late-stage venture dollars relative to fintech, AI, or SaaS infrastructure. The category is familiar, competitive, margin-constrained, and rarely rewarded for incremental innovation.

That tension makes the quiet decline of resale startups especially instructive.

The rise of resale was once framed as inevitable: ✅ Sustainability tailwinds. ✅ Gen Z behavior shifts. ✅ Asset-light inventory models. ✅ Brands eager to capture secondary market value. Between 2019 and 2022, venture capital poured hundreds of millions into resale infrastructure and marketplaces, betting that recommerce would become a core retail primitive.

Today, the landscape looks very different.

Archive is one of the few scaled players still standing, and notably, it operates almost entirely in luxury. Its focus is not resale discovery or price arbitrage, but brand-owned resale infrastructure that protects margins, customer data, and brand equity.

Meanwhile, a wave of once-promising platforms has either shut down, been acquired quietly, or faded into irrelevance.

Treet.shop positioned itself as turnkey resale for brands. Recurate raised significant capital to power peer-to-peer resale across fashion labels before being acquired by Trove. Both shared a similar thesis. If brands want resale and consumers want sustainability, the platform in the middle should win.

So what can we learn from this recent decline of resellers, and what can it teach us about defensibility in marketplaces?

1️⃣ First, supply is not loyalty.

Resale platforms relied on sellers who were price-sensitive, opportunistic, and multi-homing by default. The same inventory could appear on five platforms simultaneously. There was no natural exclusivity, no switching cost, and no reason for sellers to anchor to a single ecosystem unless pricing or liquidity temporarily improved.

Marketplaces built on arbitrage rather than workflow are inherently fragile.

2️⃣ Second, brands do not actually want platforms. They want control.

The platforms that struggled assumed brands would outsource resale indefinitely. In reality, resale data is too valuable. It reveals pricing elasticity, product durability, lifecycle value, and customer behavior across years. Once resale demand was validated, the rational move for brands was to bring it in-house or partner with infrastructure providers that stayed invisible.

This is why Archive works and others did not. It sells tooling, not traffic. Control, not discovery.

3️⃣ Third, sustainability is not a business model.

Consumers say they care about sustainability, but they rarely pay more or behave differently at scale. Resale platforms learned the hard way that values do not offset friction. Shipping delays, condition uncertainty, inconsistent sizing, and returns all compound quickly in secondhand commerce.

The platforms that survived focused on high-AOV categories where friction is tolerated and margins can absorb complexity. Think: luxury, watches, handbags. Not mass apparel.

Finally, venture scale and retail reality often mismatch.

Resale works best as a margin enhancer or customer retention lever, not a standalone unicorn. That makes it strategically valuable but venture-challenging. A great business for a brand. A difficult business for a fund.

The broader lesson here is not about resale.

It is about any marketplace built between two parties that already have alternatives. If you do not own demand, workflow, or differentiated infrastructure, you are renting growth. When capital tightens, rented growth disappears.

As we head into another holiday season filled with promotions, returns, and razor-thin margins, ecommerce quietly reminds us of an old truth.

Not every visible market is venture-backable. And not every good business needs to be a platform.

Sometimes the most durable companies are the ones that know exactly what they are not trying to be.

Next week, I will share a list of early-stage companies that I do think are taking a genuinely different approach to ecommerce. Stay tuned! Special thanks to Liesl Chang of Comeback Goods for the inspiration for this post.

🖊️ This week I’ll be sharing my roundup of the top fintech trends that shaped venture capital in 2025, and what to look out for in 2026. I’m excited to share a quote from my good friend Benedikt Langer, founder of the incredible Embracing Emergence newsletter and platform.

👉 Read on Forbes

🎧 The latest Money Memories episode featuring Grant Gallagher of Affinity Credit Union is now live. We talk about what it really means to build trust-driven financial institutions, how member-first thinking scales, and why credit unions still matter in a fintech-dominated landscape. And coming up next: one of my biggest guests of the year. Hint: it is related to 🍪 cookies.
👉 Listen on NPR, Apple, Spotify, or wherever you listen to podcasts

Event scheduling is on pause for the holidays, but I do plan on being in San Francisco in early January. If you’re around - let’s meet!

JP Morgan Health | San Francisco | January 11 - 14

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Till next week,
Ilona

“AI will make affiliate marketing irrelevant.”

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