With the rise of online shopping platforms and social media influencers, investing in used brand clothing for resale has become a lucrative business. Key players like The RealReal and Vestiaire Collective have built billion-dollar businesses by targeting high-end fashion items from luxury houses. Other sites take a more mass market approach, accepting all kinds of used clothing. Overall, the second-hand clothing market has exploded to over $30 billion annually and continues rapid growth. This article explores strategies and business models in clothing investments and resale.
Luxury resale sites streamline selling with high commissions
The RealReal and Vestiaire Collective focus exclusively on high-end designer items like Chanel bags and Gucci shoes. They simplify the selling process by sending couriers to collect items from sellers, but carefully inspect items and reject those that don’t meet their criteria. In return, they charge commissions of 20-60% on sales. By standing between buyers and sellers, they can ensure authenticity and fair pricing.
Mass market sites offer less friction with lower margins
Sites like ThredUp take a more mass market approach, accepting all types of clothing brands for resale. They also collect used items upfront but accept nearly everything, only rejecting damaged or stained clothes. These sites charge lower commissions of 5-20%, but also do less vetting and authentication of items.
Rising resale market outpaces fast fashion retail
The overall resale clothing market already totals over $30 billion annually, more than fast fashion giant Zara. And growth is skyrocketing – the market is expected to double by 2025, leaving fast fashion chains struggling to catch up.
Clothing resale complements growth of sharing economy
The growth in clothing resale mirrors the rise of sites like Airbnb and Uber creating markets for unused assets. An increasing number of consumers now see used clothing as an investment category similar to real estate and antiques. This generates income from wardrobes and closets in the same way vacant homes and cars can produce side earnings.
In summary, investing in pre-owned fashion items for resale online has become a major market generating tens of billions in sales annually. Specialized sites streamline the selling process for high-end luxury goods while mass marketplaces offer lower barriers to entry for vintage and fast fashion wares. Overall, tech innovations continue to build investing opportunities in used clothing and accessories.