Dive Brief:
- With an open-source approach to tech, ThredUp is overhauling its resale-as-a-service offering with new features and a new fee structure, the recommerce platform announced last week.
- With the update, upfront and monthly fees for branded resale shops on ThredUp have been eliminated entirely, and the company is lowering the usage-based fees for its closet Clean Out and customer cash out programs. The resale company is also giving brands access to its cleaning and repair partners, connecting them with end-of-life service providers and integrating returns more deeply into branded shops.
- ThredUp will launch a peer-to-peer resale platform by the end of the year and now also allows brands to list menswear on their resale shops. The changes came as ThredUp reported a 10% jump in Q1 revenue, to $71.3 million. Active buyers grew 6% and net loss narrowed to $5.2 million, per a press release.
Dive Insight:
Describing its enhanced brand resale service as a “universal recommerce layer,” ThredUp envisions that it could change the way brands sell used items, much like Amazon Web Services reshaped cloud services or Shopify changed e-commerce for small businesses, the company said in a statement.
“ThredUp has decided to take an open-source approach and make our RaaS software layer available to our partners for free, knowing that their ability to launch scalable and profitable resale channels will serve our strategic goals for this sector in the long run,” ThredUp CEO James Reinhart said in a LinkedIn post.
“We believe the future of retail is circular, so we’re lowering the barriers for brands to not just participate, but to lead. This strategic evolution of RaaS will fundamentally change how apparel and accessory companies build truly impactful circular programs,” Reinhart said.
ThredUp is also touting the offering as a potential tariff defense, giving brands a supplemental revenue stream that relies on domestic goods. As trade policy continues to shift, ThredUp in a recent report forecast an increase in demand for secondhand goods and growing interest among executives in using resale to their advantage.
As it revamps its retail-as-a-service offering, ThredUp remains optimistic about the near future. For both the second quarter and the year, the company anticipates revenue will grow 10% at the midpoint, reaching between $281 million and $291 million for fiscal 2025.
Beyond introducing new recommerce features for brands, ThredUp also curated a vintage and vintage-inspired pop-up this month in collaboration with Beyond Retro. The online pop-up featured more than 17,000 womenswear items priced between $10 and $200.