I woke up the other day and went into my living room to watch morning TV. Shortly after sitting down on my couch, I noticed something was different about the room. As I scanned my surroundings, I found a rather large turquoise and white plastic bag sitting next to my front door. Perplexed, I asked my wife what the bag was. I learned that the bag was associated with an online consignment store called thredUP and that my wife had been filling this turquoise and white bag with old clothing off and on for about 3 years. I was immediately interested in the concept and how a company took a traditionally offline model and turned it into a growing digital business. I figured the best way to learn about the ins and outs of the online consignment business was through a long time customer, my wife, Sydney. The following conversation outlines what makes thredUP and online consignment unique in the eyes of the customer.
Q: How exactly does thredUP work?
Sydney: It’s pretty easy. All you need to do is order a bag from their website and they mail it to your house. Once you have filled the bag, you put it outside and FedEx will come pick it up for you. ThredUP will then email you to confirm they have received the bag and give you an estimate for processing time. It typically takes them around 30 days to go through all of the clothes that you have sent and anything they don’t accept they will recycle or donate. One thing to note is that thredUP is picky about the quality of clothes and typically accepts less than 50% of what is sent to them. If thredUP approves an item, they place it into one of two categories, upfront or consignment. If it’s an upfront item, it means that it’s in-season and you’ll receive a payout as soon as they receive the bag. A consignment item is typically offseason and therefore you won’t get paid until it sells.
Q: What makes thredUP better than alternatives?
Sydney: I would consider threadUP’s two main competitors to be Poshmark and eBay. With both of those websites, you have to take a picture of all of your items, write up a description, and post it yourself. However, threadUP has really simplified and improved the customer experience from the seller’s side by doing all of the leg work for you. ThreadUP also often pays the seller before items actually sell furthering the trust and relationship between the brand and the seller.
Another competitor that’s non-digital is the traditional consignment shop. I’ve gone that route before, but they won’t pay you until your clothes sell, and if they don’t sell, they make you take it back. I’ve had a couple of dresses that I’ve worn to weddings that thredUP has marked as consignment, and even though I didn’t get paid right away, I knew I would eventually receive something because thredUP’s online presence allows for a larger audience of potential buyers than traditional consignment.
Q: Do you shop at thredUP as well or just sell your clothes?
Sydney: When cashing out, you have the option to take your profits in cash or receive a higher amount in thredUP credit. The only turnoff I have with the site, is that the clothes look like they were just taken out of the bag when the picture was taken. That being said, they do have over 25,000 brands, and the price points are really good. Additionally, all of the clothes are organized by type of clothing and brand, which definitely makes the thredUP online experience much better than eBay and traditional consignment.
While thredUP has yet to turn a profit, they’re growing in popularity and brand awareness. This growth is largely in part to the improved customer experience for both buyers and sellers that can only be provided by a business that operates on a digital platform. With the growth of the sharing economy, there has also been growth in the digital consignment industry, as shoppers look at consignment as a way to rent or lease clothing for a shorter period of time. Beyond their digital business presence, thredUP also has a large presence on social media. ThredUP relies heavily on user generated content on their social channels, which act like visual reviews of their products helping to build trust in their brand. ThredUP has leveraged everything from unboxing campaigns to pictures of customers wearing thredUP outfits with the brand hashtag #secondhandfirst. ThredUP wasn’t the first to bring the resale of clothing items to an online platform, but they are the first to perfect the online customer experience aspects of digital consignment. It will be interesting to see if thredUP can continue to capitalize on the growing preference to online consignment.