Recommerce Surges as Retailers, Brands Get in the Game

Recommerce –“resale trade” — is the practice of selling used products or surplus inventory to consumers or companies. The two Millennials (birth years early 1980s to late 90s) and Generation Z (late 90s to about 2012) are embracing the idea of buying secondhand goods. They’re over two times likely to participate with recommerce than older customers, based on GlobalData, an independent retail analytics company which conducted research for the”2019 Annual Resale Report” for recommerce apparel merchant thredUP.

While consumers have been purchasing used books, CDs, and DVDs for decades, people under 40 are scooping up clothes, jewelry, shoes, and purses. Gen Z is showing the maximum growth rate for”thrifting.”

Fifty-six million girls of all ages bought secondhand goods in 2018. Although most buyers use the secondhand items themselves, others buy goods for resale on web sites like eBay.

Recommerce merchants are growing 20-times quicker than the wider retail market and five-times quicker than off-price retailers, based on Coresight Research. The company forecasts that the overall U.S. apparel resale market will expand at a compound annual rate of 13 percent, reaching $33 billion in 2021. Clothing, shoes, and accessories now constitute 49 percent of their total U.S. recommerce marketplace. GlobalData estimates that the total worldwide apparel marketplace (resale and donation) will climb to $51 billion in 2023.

Leading recommerce businesses include thredUP, TheRealReal, and Poshmark.


ThredUP accepts only certain brands but doesn’t focus exclusively on luxury merchandise, even though the website contains a high-end”Luxe” branch that sells designer brands from invited sellers.

Individuals who would like to empty their closets can ask a postage-paid clean-out kit to send clothing, handbags, shoes, and jewelry for consideration. ThredUP is selective and takes only 40 percent of items shipped. All of Luxe items are authenticated by in-house specialists to make sure they’re not counterfeit. Goods that aren’t accepted or that don’t sell are recycled. Sellers can also request their clothes to be returned, but they need to pay a fee to do so.

The business employs an algorithm which looks at the brand, style, year, and current inventory to price things. The business also supplies donation bags for people who wish to dispose of things.

Earlier this month, thredUP announced partnerships with J.C. Penney, Macy’s, and Stage shops. Pilot projects for the 3 merchants are in about 100 stores using a larger rollout planned.

The retailers pay to construct thredUP distances in-store, and they’re stocked with thredUP’s inventory. Customers may also drop off their used clothes, which can be shipped to thredUP warehouses. Partner retailers wish to draw more shoppers to the stores, hoping some of them are going to buy the shop’s regular inventory.

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TheRealReal is an eight-year-old consignment company, which concentrates on luxury brands (clothes, jewelry, art, home decor), also provides sellers using a prepaid shipping package to send products. Like thredUP, TheRealReal authenticates items to be sure they’re not counterfeit. Products which have not sold after a year can be shipped back to vendors, at their cost. Otherwise, unsold inventory is given to charity.

Sellers are paid on a sliding scale. Once an item sells, the seller receives a percentage of the selling price (50 percent for items priced at $200 or less, and up to 70 percent for products that sell for at least $10,000.)

Kering, the Paris-based parent company of Gucci, Balenciaga, Saint Laurent, and other luxury brands, partners with TheRealReal, putting unsold inventory on the website. A partnership with style brand Stella McCartney lets sellers that consign pieces from this brand get a $100 Stella McCartney card.

TheRealReal also has brick-and-mortar shops in Los Angeles and New York.

In 2018, TheRealReal processed 1.6 million orders for its second-hand items, 42 percent more than in 2017, according to the firm. The website’s gross product value in 2018 was $710.8 million, up 44 percent over 2017, with total earnings of $207.4 million, up 55 percent. Nevertheless, the business isn’t yet profitable, with a net loss in 2018 of $75.8 million. In June, TheRealReal went public and raised $300 million, at $20 per share.



Poshmark is a market for used goods. It doesn’t utilize the consignment model. Sellers must handle their own listings, including photographs, descriptions, and pricing. Sellers send the sold merchandise to buyers with a prepaid shipping label provided by Poshmark. In exchange, sellers maintain more of the sales profits than they would through a conventional consignment shop. For items with a sale price lower than $15, Poshmark charges a flat fee of $2.95. More expensive items are subject to a 20-percent commission.

Poshmark provides Posh Parties, which are virtual purchasing and selling events inside the application. Individuals can browse, purchase, and record together with friends.

Other Sites

Yerdle provides a white label service for apparel retailers Arc’teryx, Eileen Fisher, Patagonia (Worn Wear tag ), REI, and Taylor Stitch, allowing customers return used goods for credit. When Yerdle receives the merchandise, it repairs and refurbishes them that the apparel companies can resell them refurbished under their own brands with guarantees.

Paris-based Vestiaire Collective enables consumers to record used luxury products themselves or utilize Vestiarie’s consignment services. Most sellers are located in Europe.

Environmental Impact

The equivalent of a single garbage truck of fabrics is delivered to a landfill or incinerated every second, according to The Ellen MacArthur Foundation, a U.K.-based charity which promotes the circular market. Consumers, especially younger ones, want the brands they purchase to be aware of the environmental effect of their practices. ThredUP, by way of instance, estimates that it’s upcycled 65 million posts in the last five years — 21 million in 2018 alone — saving these things from landfills.

In 2018 British luxury fashion brand Burberry received scathing criticism for burning about $38 million worth of new, unsold clothes, accessories, and perfume so that none of it might get to the gray market. The business has responded to the criticism by announcing it will no more destroy the goods.

Burberry isn’t unique; many brands ruin”deadstock” in precisely the identical way. Partnerships with recommerce merchants enable manufacturers to showcase their sensitivity to the environment and improve customer loyalty.

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