Resale market is tiny but growing quickly
NEW YORK — Jenna Broems shops for clothes the same way she hunts for a new car: She considers resale value.
Broems, who lives in Stamford, Conn., only buys brands like Abercrombie & Fitch and 7 For All Mankind because she believes they will fetch the highest prices when she’s ready to move on.
“I’m now walking in like ‘What’s the return of this? Am I going to be able to resell?”’ said Broems, 38, a teacher who has gotten $2,500 from stuff she’s resold on ThredUP, an online resale site for clothes.
Americans increasingly are considering the resale value when they shop for everything from jeans to handbags.
It’s the latest reflection of the tough economy. Buying used goods at consignment shops became popular during the recession when Americans were hurting for extra cash.
But the habit has stuck as people got used to being able to wear the latest fashions without paying top dollar: Just as people lease a new car every couple of years so they’re always riding in style, reselling clothes is a way for Americans to update their wardrobes without spending a lot of additional cash.
The trend also is a consequence of the escalating cost of luxury. Rising prices of designer merchandise in recent years have tested the willingness of even affluent shoppers to pay full price. The price of a Chanel handbag, for example, is now $4,900 this year, up from $2,250 in 2007.
The resale market is tiny: about 10 percent of overall luxury goods — including clothing, handbags, accessories and home furnishings, are sold in the aftermarket — with about one percent of preworn goods sold online, estimates Forrester Research’s Sucharita Mulpuru.
But data suggests it’s a fast growing area of retail: Shoppers seem to have resale value in mind. According to a survey conducted last year by market research firm The Intelligence Group’s Cassandra Report, 44 percent of 900 shoppers between the ages of 14 and 34 think of resale value when they purchase things like electronics, furniture and clothing.
Shannon Dolan, who lives in San Francisco, said she’ll buy a Louis Vuitton handbag over a Gucci one based on how much she believes it will command if she resells it.
“It absolutely changed the way I shop,” said Dolan, who has made $10,000 on online resale marketplace TheRealReal by selling clothes. “I’m really thinking of the value and investment of some of the things I’m buying.”
Resale sites have taken note. The sites marry the discounts found on resale online king eBay with tighter controls: They have staff to make sure designer goods are authentic.
“This is a broad narrative on how people are buying things and using things,” said James Reinhart, co-founder and CEO of ThredUP, which launched as an online children’s swapping business in 2009 and morphed into a resale site two years ago.
