Resale platforms are currently navigating a remarkable influx of new shoppers, largely driven by altering trade policies and shifts in consumer behaviour. Amidst ongoing turbulence in US trade regulations, these platforms are capitalising on a surge of what are being termed “tariff-ied” customers. In a recent report, resale marketplace ThredUp noted that its new buyer count soared by 95 percent in the first quarter compared to the prior year, marking the most significant quarterly growth in the company’s history. Following the announcement, ThredUp’s shares surged over 40 percent, with revenue climbing 10 percent year-over-year to $71.3 million—a strong reflection of the resilience of the resale segment in a tumultuous retail environment.
This increase in interest isn’t isolated to ThredUp; TheRealReal also reported an 11 percent growth in year-over-year revenue, reaching $160 million. Such figures align with findings from marketing intelligence firm Sensor Tower, which observed a marked rise in downloads of resale apps, including popular platforms like Depop, Vestiaire Collective, Poshmark, and eBay during the same timeframe. While a portion of this uptick is attributed to a general trend of consumers seeking cost-effective alternatives amid prolonged inflation, it appears the anticipated increases in prices for new apparel due to tariffs are motivating many to explore secondhand options.
The recent closing of the de-minimis loophole—previously exploited by ultra fast-fashion brands like Shein and Temu—has been a particularly significant factor in reshaping the landscape. As these brands face rising prices, Poshmark’s CEO Manish Chandra remarked that the natural response will likely lead shoppers to explore resale avenues instead. The appeal of resale is strengthened by the reality that a considerable portion of its inventory is already present within the market, insulating these platforms from fluctuations in overseas sourcing.
Moreover, while the growing number of new shoppers presents an opportunity, it also introduces certain challenges for these companies. Resale platforms are engaged in fierce competition to attract sellers, who are essential for maintaining diverse inventory. As user bases swell, the user experience risks becoming diluted; buyers may struggle to locate specific items among an expanding array of choices, challenging the curated experience that initially drew many users to these platforms. Fluctuations in selling fees, commissions, and item listing protocols can also lead to dissatisfaction among sellers, prompting them to consider alternative platforms.
Industry experts underscore that the challenges facing the resale sector extend beyond supply chain issues to encompass trust and visibility concerns. Andy Ruben, a senior advisor for the Boston Consulting Group and a former founder of the resale platform Trove, emphasised that the burgeoning market faces a trust challenge—where customers need assurance regarding product quality and authentic representation.
As companies seek to mitigate these complexities, focusing on niche segments can provide a competitive advantage. ThredUp, for instance, has carved a distinctive path by specialising in women’s and children’s clothing through a consignment model centred on mainstream high-street brands. This approach allows for a more moderate expectation of item value from sellers, resulting in higher take rates for the platform.
Furthermore, technology plays an increasingly vital role in facilitating growth within the secondhand market. eBay has integrated artificial intelligence to streamline the listing process for sellers and introduced AI-driven tools that help consumers discover products through photo uploads or chatbots. ThredUp’s CEO, James Reinhart, elaborated that the company’s aggressive push towards AI development has significantly improved user experience and conversion rates.
Yet, the complexity of browsing multiple resale platforms poses another hurdle for consumers. Addressing this issue, innovative apps like Gem aim to streamline the search process by enabling users to compare listings across various marketplaces, ultimately enhancing the shopping experience.
The surge in secondhand shoppers is not solely the domain of established resale platforms, as brands and retailers are increasingly keen to tap into this growing market. Senior advisors highlight that as the demand for branded resale services escalates, competing in this space will become essential for these marketplaces. Resale platforms are proactively forming partnerships with brands to facilitate easier resale of used goods, a strategy which may simultaneously alleviate tariff pressures on new products.
With forecasts suggesting that the US secondhand apparel market could reach $73 billion by 2028, the stakes are high. Brands eliminating tariffs on used inventory could forge a more sustainable path forward. Nonetheless, there exists a double-edged sword—as these brands establish their independent resale channels, they may present a long-term competitive challenge to established marketplace players.
In this dynamically shifting landscape, resale platforms must adeptly navigate both opportunities and hurdles as they seek to retain the new customers drawn in by rising tariff costs. The growing consumer base presents a pivotal moment, and how these platforms respond in the evolving market will be critical for their sustained success.
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Source: Noah Wire Services
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