At the end of 2021, ThredUp had 28 resale-as-a-service clients. That number has grown by nearly 50% since then, ending 2022 with 40 customers, some of the latest include Torrid, Paxun, and Hot Topic. Earlier this month, it acquired J.J. Crew announced its latest partnership. ThredUp expects to add more retailers to its roster in 2023.
ThredUp charges its partners a usage-based fee to participate in the program. For resale stores, it takes a share of the revenue on items sold, and for clean out kits, it takes a fee attached to payments to retailers. While ThredUp’s earnings didn’t reveal how much revenue it generated from the program, its total revenue for the third quarter ending Sept. 30 was $67.9 million, up 7% year-over-year. Its net loss was $23.7 million, compared with $14.7 million a year earlier.
The demand for vintage clothing is on the rise worldwide, especially among Gen Z and Millennials. Sites like TheRealReal, Poshmark and Depop are continuing to gain traction, while several retailers like The North Face and Lululemon have launched in-house resale programs. With resale increasingly dominating the market, Modern Retail spoke with Jackie Borker, ThredUp’s senior director of marketing, about the process of getting brands on board.
This interview has been edited for length and clarity.
How are you communicating with retailers about the program to gain interest, and what does the relationship look like once you’ve decided to move forward with a company?
Resale is a really exciting space, and brands and retailers are looking for ways to be more circular and more sustainable. We’ve been having a lot of dialogue and conversations with brands and retailers about this, and that’s really the genesis of our relationship with them.
We offer a few different modules of our resale program as a service. There’s a… clean out kit. So that’s where we allow or enable brands and retailers to essentially ship their customers in any brand of clothing… ThredUp then really takes care of everything that happens behind the scenes from there. Provides strength. We will process whatever comes. We will hand over that inventory or ship those clothing items to be sold to another customer. And then based on the items sold, customers earn credits to spend with the brand sponsoring the program.
…we also run resale shops. So with resale shops… we’re essentially creating white-label resale shops that are completely powered by ThredUp, where these brands can host a resale shop that’s essentially their e-commerce website. living inside Therefore, customers can visit jcrew.com and then “J. crew always” [its line through ThredUp],
Can you elaborate more on how the logistics work on the back end?
Basically, we take the clean out kits to our distribution centers – we have several across the United States – and then we process the clothing that comes in, we photograph the clothing, we take measurements, we brand, We check sizes and all of that and we list items for sale online. The clothing will be listed on thredup.com and may also be listed on resale shop partner sites. We call that cross-listing…we’re actually looking at every item of clothing that comes in, which is a nontrivial operational process.
How long does it take to start a resale store?
We can launch very quickly for some programs, and then for others that are more custom, it can take months. But it really depends on the scope of the program.
What have you learned through this program about what works and what doesn’t in branded resale?
At the end of the day, it’s important for us to have an impact. And so we think the greatest potential for branded resale is when you can make apparel and accessories available in large quantities to broadcast to new customers.
One of the things that we really try to do is make sure that when we set up a resale shop, there’s an adequate amount of inventory in that resale shop. So imagine if you went shopping at a branded resale shop, and you filtered by your size, and you could really only find three pairs of pants, that’s probably not as interesting or as exciting or as obviously a positive experience. Will be, because… you might not find something that’s your style.
And so, one of the things that we’re focused on, and certainly not the only thing, is trying to make an impact and create loyalty to these programs at large … if every Every time you come back, there’s fresh new inventory that’s updated daily or even hourly, and you have so many things to look at that are in your size or your style, it’s something that That’s very exciting and we see resale growing higher and faster.
