Major Brands Turn to In-House Resale Strategies for Extra Profit and Sustainability

By Patricia Anderson January 29, 2024

Recognizing the growing global value of resale apparel, major fashion companies are launching their own in-house resale programs. Aimed both at customers who want to declutter their wardrobes and those keen on owning quality brand items at lower prices, these programs present a win-win solution for brands and consumers alike.

More and more popular brands are urging their consumers to return gently used items in exchange for store credit or cash, hence driving profits and promoting sustainability. High quality, long-lasting products can often be sold multiple times by the companies, thereby decreasing waste production and keeping products in circulation longer.

Notable businesses have jumpstarted their own resale programs in the recent years including Swiss running company On, workout wear brand Lululemon, revered sustainable fashion pioneer Eileen Fisher, and J.Crew. This strategy not only attracts consumers who are looking to earn back some capital from their previous purchases, but also appeals to those seeking to purchase pre-owned products at a discount.

Simultaneously, brand-oriented resale programs are emerging alongside exclusive worn goods marketplaces like TheRealReal, ThredUp, and Poshmark. Trove, a re-commerce logistics company specializing in fashion and apparel, powers in-house resale programs for over 20 brands including outdoor apparel company Patagonia, technical clothing producer Arc'teryx, Lululemon, and On.

Companies venturing into resale see it as part of their sustainability commitments and the drive to reduce carbon emissions. As per Trove CEO Gayle Tait, businesses that have been engaged in resale for years are already observing positive financial returns. The Worn Wear program by Patagonia, established more than a decade ago, is an example of a resale program that is independently profitable.

She shares with CBS MoneyWatch, "Brands are starting to understand that making high quality items that are durable and have multiple owners over their lifetime is a way to build loyalty and brand relevance, as well as reducing carbon emissions in the supply chain. It feels like it's a win all around for the brand and customer."

As of 2022, the worldwide market value of secondhand and resale apparel stood at $177 billion. This figure is predicted to double by 2027. In the last quarter, Trove's own operations expanded by a record 50% compared to the same period in the previous year.

Online thrift and consignment store ThredUp is also seeing the value in resale, providing resale services to approximately 50 brands. Its CEO, James Reinhart, noted that although every brand is different, they primarily pay Thredup for processing and services. When the products sell on their sites, brands acquire a share of the revenue.

Regarding the impact of such programs on production, Reinhart indicated that they would need to become more substantial before they could significantly decrease the production of new products. Nonetheless, he believes that the prospect of making revenue from reselling items multiple times could eventually lead to a reduction in production rates.

Marketplaces like ThredUp, TheRealReal, and eBay can coexist with in-house resale services, according to Reinhart. He encourages consumers to prioritize their needs when choosing a resale platform.

One benefit of companies like ThredUp is the convenience. Customers can ship their items to the company with one of ThredUp's free "Clean Out" kits, earn cash when the items sell, or receive immediate shopping credit. When selling high-value items like a Canada Goose parka, going directly to the brands may be more rewarding as they offer gift cards equating to a percentage of the resale value without waiting for the item to sell.

Ultimately, consumers must weigh their options and decide whether they need quick value from the brand or if they are willing to undergo a potentially longer process to maximize their earnings.