Are resellers getting rich from selling secondhand clothing?
9 out of 10 TikTok commenters hate me for this.
Are resellers getting rich from selling secondhand clothing?
Ummmm....definitely not. Making reselling a sole source of income that pays all of your bills can happen, but not without a ton of work. It’s actually really challenging for resellers to pay themselves a living wage. In this week’s episode of the podcast, Valeria of ThryftShip and I talked about the true economics of selling secondhand clothing online.
Yes, it is massive industry that is making some people really rich. The resellers inarguably do the bulk of the labor: sourcing, laundering, mending, measuring, photographing, listing, shipping and so on. But they tend to be left with the smallest portion of the money made from a sale. DOES THIS REMIND YOU OF YOUR JOB?!
In order to make a living from resale, sellers have to price things to cover all of their expenses and work. This naturally drives prices higher than thrift stores. I think that criticism of this necessary decision stems from three issues:
★ We devalue secondhand clothing. It seems as if the common belief is that secondhand clothes should cost 10-25% of their original, new retail price. That math doesn’t always make sense because if something in good condition, we can get years of wear out of it, despite it being preowned.
★ We are super confused about price and value, thanks to the fast fashion industry. If we think it makes sense for a new dress to cost $20, naturally we think a used dress should be a tiny fraction of that. Rather than asking why something is “so expensive,” we need to get into the habit of asking why something is “so cheap.” Resale prices do make sense when you dig into them.
★We forget that we are buying more than just an item from resellers, we’re also getting the service of curation, expertise, and convenience.
Are there people jacking up prices on secondhand clothing? For sure! People with bad intentions can be found in every industry. But the vast majority of secondhand resellers are just barely getting by.
P.S. As are reminder, I am not a reseller, just someone who is really passionate about our planet and its people. And a better future means most people shopping secondhand, most of the time.
Who are the people selling secondhand clothing?
The simplest answer: people just like you and me!
Some are just looking to make enough money to make ends meet because they are not paid enough at their regular jobs.
Others need to work around complex schedules. They may be students, parents, or caring for other family members.
Some people opt for reselling because they have health issues or other circumstances that are barriers for employment elsewhere.
The most important thing: just about everyone selling secondhand is just looking for a way to survive financially in a world that is increasingly more expensive, where the cost of living has far outpaced wages. And yes, there are probably some sketchy, rude people selling secondhand out there, but there are rude, sketchy people in every industry and community. Some humans are just rude and sketchy!
There is an entire industry getting rich from resale…
Spoiler alert: it’s not the resellers themselves, even though they are doing the vast majority of the labor involved in each transaction.
The platforms take a cut of each sale, and it can range from 10-30%. Vinted charges no commission for sellers, but makes its money selling “buyer protection” to customers.
Financial service providers like Venmo, Paypal, and Square take a small percentage of all transactions using their app.
Shipping services like Pirate Ship offer discounted shipping rates to sellers. They make their money by negotiating an even lower rate with USPS/UPS, and then pocketing the difference.
Also: apps used for photo editing/graphic design, companies offering business credit cards, website hosting platforms, packaging/label companies, even the companies making thermal printers
Dispelling another myth
Resellers aren’t taking all the “good stuff” at the thrift stores because they have been priced out of most thrift stores, too. It’s kinda impossible to make a living selling shirts that cost $6 at the Goodwill for $20 on Poshmark. Let’s do the math here...
For sales of $15 or more, Poshmark takes a 20% cut.
So if the shirt sells for $20, the seller is left with $16. Sounds great right?
But if that shirt cost $6 at the Goodwill, the seller is left with $10.That “profit” doesn’t include any of the labor or other expenses listed on a later slide.
But let’s say that the customer asked for free shipping (that is very common). Poshmark shipping is about $8.
That leaves the seller with...a whopping $2, before deducting other expenses. Imagine how many shirts have to be sold to pay a seller’s rent, groceries, health care, etc!
It’s difficult to make money as a secondhand reseller...
Resellers face a quandary: how do they keep prices reasonable for customers, while also making a living?
You can’t make a living sourcing from the Goodwill, selling on these platforms, and charging only $20-30 per item...while giving customers the oft-demanded free shipping.
It’s no wonder then, that the majority of resellers don’t source from thrift stores. It doesn’t make good financial sense. Many find their inventory at the “bins.” These are the Goodwill outlet where items are sold by the pound, and it’s often the last stop before the landfill. Also: estate sales, yard sales, raghouses, auctions, and via companies selling by the “lot.”
Even still, it is difficult to keep prices low when so many other companies are taking a cut.
And oh yeah, resellers have other expenses, too.
The gas used on sourcing trips, along with the reseller’s time spent sourcing.
Any laundry or mending, including the time and materials needed to do that.
The time spent listing, measuring, and photographing an item, along with any listing fees.
All the tech and apps involved in running a small business, from subscriptions for photo editing, website hosting, and creating social media content, to computer, phone, internet access, printer, paper, ELECTRICITY!
Taxes and free shipping (if included). After all, only three things in life are certain: death, taxes, and shipping is never actually free.
Packaging, shipping labels, trips to the post office.
Ultimately, it’s ridiculous to expect reseller prices to be as low as those at the thrift store.
When you buy something secondhand from a reseller, you getting more than just an item, you’re getting a service. That service is actually pretty luxurious when you think about it:
You get access to things you might not find on your own. For me, this is my favorite part of being able to shop secondhand online. I get to browse wayyyy more items than I would ever find in a full day of thrifting!
You don’t have to do the work of tracking it down yourself. <---priceless!
It arrives at your front door, clean, mended, and ready to wear. Someone else did the work of removing stains and replacing lost buttons.
Here’s the truth (in a world filled with misinformation about secondhand):
There are so many secondhand clothes in this world, way more than we can ever rewear. And they are ending up in landfills all over the world, in the oceans, in the Atacama desert, on beaches in Ghana, and many other places far away from the nearest thrift store. Forgotten by us, but still leaving their mark on the planet and its people.
Rather than raging against resellers, be glad we are removing the stigma of secondhand shopping and more people are adopting it as a normal part of daily life.
Acknowledge that it is harder than ever to make a living wage and be happy that people are making a living reselling online. Shopping secondhand isn’t easy for many people. It takes a lot of time, access to a car, laundry machines, mending materials and all of the other services that resellers are providing by allowing customers to acquire secondhand clothing with a click or tap. Resellers are providing a valuable service. They are doing hard work. I am glad to pay them for that.
Maybe this post has changed your mind about the secondhand economy or just reinforced what you already know. Or maybe you agree with “Katty.”
I love resellers. They save me so much time. I don’t have to spend hours digging through thrift store bins or traipsing around charity shops. I can just search for exactly what I want on Vinted.
People love to hate on resellers. They're making money from stuff someone else didn’t want—and couldn’t be bothered to sell themselves—so they donated it instead. What’s the problem?
I don’t mind paying a bit more when buying from a reseller. Chances are the item’s in better condition, it’s been cleaned, and any flaws are clearly listed. But when it comes to secondhand fast fashion, I won’t pay more than 50% of the original retail price. Most clothes aren’t worth their full RRP to begin with, and if something’s been worn—even just once—that should be reflected in the price.