From thrift stores to flipping goods online, there’s a rich tradition of people making a living from selling ‘pre-loved’ goods. Now, as the physical retail market gets increasingly squeezed by ecommerce, a growing number of mainstream stores are looking to resale as a means of diversifying their revenue streams.

It’s a strategy that has been especially successful in the fashion and clothing sector. In the US, the number of apparel outlets with second-hand sections has increased by 7% in the past two years. The overall pre-owned clothing market grew 11% in 2023, reaching $43bn in sales with a gross merchandise value of $20bn – up $3bn from the previous year.

Forecasts suggest the market for second-hand apparel could reach $73bn by 2028.

The growth of the pre-loved fashion market can be explained by the inflationary pressures put on household budgets over the past few years. Cost-conscious consumers have always seen buying second-hand as a thrifty option. Now, more and more people are looking for value in what they purchase – including those who wouldn’t normally frequent thrift stores or buy from online marketplaces.

It’s this new audience that is driving the resale opportunity in mainstream fashion stores and boutiques. They get an alternative affordable option in the places they are used to purchasing clothes. And there’s a level of trust there that the items available will be of a quality that reflects the retailer’s brand.

There are other resale success stories, including consumer gadgets. The market for refurbished smartphones is seeing double-digit growth year on year. Many major cell phone retailers are selling refurbished devices alongside new, including Apple and Samsung in their own stores.

Other categories such as jewelry, furniture and luxury goods are also well-positioned to cash in on the trend.

Resale essentials

So what do you need to know about expanding your in-store offer to include resale?

The main requirement for getting started in the resale trade is a source of pre-owned goods. There are three main options:

1. Ask for donations from the public. A good example is phone vendors taking old handsets for parts and refurbishment. Another is Lululemon’s ‘Like New’ trade-in scheme, where customers earn store credit for old clothes. This is generally the cheapest way to get resale stock and can result in excellent margins, though quality will vary and the sorting and assessment process can be laborious.
2. Partner with a used goods wholesaler. Buying stock from a second-hand wholesaler will cost more than from private sellers but they will do the quality assessments for you and you can generally source better quality items.
3. Partner with an online resale platform. This has become a big trend in the fashion industry, with online vendors like ThredUp making a big play to partner with bricks-and-mortar retailers. Online resellers are finding that having an in-store presence drives sales volumes because consumers like to browse and handle pre-owned goods in person rather than relying on photos and grading descriptions. For retailers, meanwhile, online vendors represent the most reliable source of quality pre-owned stock, although prices tend to be higher.

There are pros, cons and different implications to consider with each option, including how you manage adding pre-owned stock to your inventory, pricing and more. Again, partnering with an online resale site is the easiest choice. Via an API, you can sync your POS to their commerce platform to easily share product, price and sales data.

With the other two, the set up is more manual. Working with a second-hand goods wholesaler is much like working with any supplier. Depending on your local state laws, you may need to issue a resale certificate to your wholesaler. This is a declaration for tax purposes that you intend to resell the pre-owned goods.

When taking goods from public donations, you will need a means of creating new stock listings from scratch (rather than importing them from online retailer or wholesaler systems). This can be done through your POS system so items can be turned around quickly for resale on the store floor, though staff will need to be trained and appropriate protocols (including for pricing) put in place.

Another consideration is how to pay donors. Lululemon’s Like New scheme makes for a great case study in this regard, too, as it shows how you can repurpose a loyalty programme to swap pre-owned stock for rewards/credit.