Resale Welcomes a Wave of ‘Tariff-ied’ New Customers

Resale platforms are grappling with the best sort of problem to have: how to manage a surge in new shoppers.

While US trade policies roil the fashion industry at large, resale is welcoming a flood of “tariff-ied” new customers. On Monday, resale marketplace ThredUp reported that the number of new buyers on its platform in the first quarter rose 95 percent compared to last year, marking the largest quarterly increase in new customers in the company’s history. ThredUp’s stock is up more than 40 percent after its first quarter beat Wall Street expectations, with revenue rising 10 percent year over year to $71.3 million. On the other end of the spectrum, luxury resale is also faring well with TheRealReal reporting revenue up 11 percent year over year to $160 million on Thursday.

The jump in new shoppers aligns with data from marketing intelligence firm Sensor Tower, which found downloads of resale apps in the US rose during the first quarter of 2025, with Depop, Vestiaire Collective, Poshmark and eBay among those seeing the most significant growth. While resale has other tailwinds, like more consumers trading down and looking for deals after a long period of inflation, the anticipation of higher costs on new apparel from tariffs appears to be driving more interest in secondhand shopping.

“As we look ahead, we’re cautiously optimistic that resale and our business could benefit,” ThredUp chief executive and co-founder James Reinhart told The Business of Fashion.

The closing of the de-minimis loophole last week has simultaneously eroded the value proposition once held by ultra fast-fashion labels such as Shein and Temu, which have already seen sales decline with their introduction of higher prices. Poshmark CEO Manish Chandra believes as those products become more expensive, shoppers will naturally gravitate towards resale.

“The great thing about this inventory is most of it already exists in the country,” Chandra said of resale’s offering.

Secondhand platforms are generally less reliant on products from overseas sources like China, meaning tariffs aren’t a major concern. Ebay said in its earnings call last month that only 5 percent of its global merchandise value goes from Greater China to the US. Depop‘s parent company, Etsy, shared on its recent earnings call that just over 1 percent of gross merchandise sales were attributed to US imports of items from sellers in China.

But with new growth comes new problems to solve. Resale businesses are competing against each other to attract sellers, whose inventory they need, and as platforms scale and fill up with more users and products, it can become harder for buyers to find exactly what they’re looking for or diminish the sense of curation that may have attracted early users. The user experience can suffer as a result, turning off customers old and new.

For sellers, changes to selling fees and commission or even where they can list items can create gripes that may push them to sell inventory to other platforms. Last week, Modern Retail reported that sellers on Poshmark were suspended after they were accused of “excessively” deleting and relisting items to bump up their visibility to shoppers.

“It’s not a supply problem,” said Andy Ruben, a senior advisor for Boston Consulting Group who previously founded the branded resale platform Trove, “we have a trust challenge, we have a model challenge and we have a visibility challenge.”

The Innovation Flywheel

Companies can dodge some of these issues by carving out a niche within the market, as ThredUp has according to Dylan Carden, a consumer research analyst for William Blair. Where many other marketplaces are focused on either peer-to-peer resale or luxury fashion, ThredUp has found a lane for itself by focusing on women’s and kid’s clothing collected through a consignment model that specialises in mainstream high-street brands such as J. Crew, Lululemon and Theory, which also grants ThredUp a higher take rate because sellers have lower expectations for an item’s value — and their cut of it — than in luxury.

Many resale businesses have also been looking to technology for help as the secondhand market has grown rapidly in recent years. Ebay uses AI to make it easier for sellers to list items and on Tuesday unveiled a shopping agent that helps shoppers discover listings through uploading a photo or speaking with an AI chatbot about an item they’re searching for. Poshmark introduced an AI-powered listing tool in January that it claims cuts the time for sellers to post listings by 48 percent. On ThredUp’s earnings call on Monday, Reinhart said customers who used an AI-powered “shop similar” search tool during a session had a 64 percent higher conversion rate.

Reinhart told BoF that ThredUp began a “really aggressive AI-development process” at the beginning of 2024 and has launched new AI-assisted tools nearly every quarter to improve ThredUp’s product experience, which in turn increases its conversion rates and customer acquisition.

“The final piece is that it gives you the flexibility and the incentive to then process lots of great products that are in season and on-trend,” said Reinhart. “That combined with an ever-improving, AI-based product experience is what’s driving the flywheel in the business.”

Platforms such as eBay allow shoppers to save searches to make browsing easier, but the difficulties for consumers aren’t just limited to scouring one site. Finding the product you’re looking for or comparing deals can often require searching on numerous sites. The app Phia, which was co-founded by Bill Gates’ daughter Phoebe, aims to tackle part of the problem by offering price comparisons of products across sites. Another app, Gem, tries to make it possible to search a variety of resale marketplaces in one search bar.

Founder Liisa Jokinen created Gem in 2019 to address how hard it had already become to sift through the number of secondhand platforms available. Jokinen is acutely aware of how saturated these marketplaces can become, with Gem currently presenting searchers 125 million listings as of this week.

“Some old shoppers or users might feel that if there are more secondhand shoppers, there will be more demand and more competition, so they might feel like they can’t find the good items and good deals anymore,” said Jokinen.

The Branded Resale Opportunity

Dedicated resale businesses aren’t the only ones eyeing the surge in secondhand shoppers. More brands and retailers in the primary market have been looking for a share of resale in recent years, and now there’s only more incentive to get in on the action.

“Yes, marketplaces are going to be advantaged, but brands are also now moving up the priority of resale,” said BCG’s Ruben. “The risk and the headwind that these marketplaces will now face is when brands and retailers get serious about the space.”

By relying on customers domestically to provide used inventory, brands would be able to avoid tariffs on those items and soften the blow from tariffs on the new goods they’re importing.

Branded resale as a service is already offered by both Poshmark and Thredup, which have forged partnerships with brands such as Reformation to help their customers easily resell used goods. ThredUp’s Reinhart also singled out branded resale as a larger opportunity on the company’s earnings call Tuesday, announcing that ThredUp plans to open-source its technology and logistics to help brands build resale businesses through free branded shops and simplified clean-out programmes.

“Given volatility in global trade, it’s probably more relevant than ever for a brand to think about how to get back products or recycle them into their supply chain to not pay tariffs on stuff it’s already made,” said Reinhart.

Of course, brands themselves could instead choose to build out their own branded resale programmes independently and challenge these marketplaces.

“The [customer] pipeline has never looked like this,” Ruben said. “Brands and retailers getting serious is a long term competitive challenge for them.”

In the meantime, they’ll be doing what they can to attract — and keep — all the new shoppers that tariffs are sending their way.