How fast-fashion backlash gave ThredUp a marketing edge: ‘It’s easy to have a boogeyman’

This week on the Modern Retail Podcast, ThredUp CEO and co-founder James Reinhart spoke about rising demand for resale and how the platform has expanded its offerings. Not only does ThredUp have its own marketplace business, but the company has been building out its resale-as-a-service offering, allowing brands to use its infrastructure to create their own consignment programs.

“In some ways, I describe us as really the infrastructure and backbone of how resale works on the internet,” Reinhart said.

Compared to some of the recent fast-fashion upstarts, ThredUp is an older player. The company was founded in 2009, and went public in 2021. Still, ThredUp has been able to stay current with recent business movements. The rise of Shein and Temu — as well as the backlash to their fast-fashion value-focused offerings — has given ThredUp some helpful tailwinds, for example.

“It’s easy to have a boogeyman,” Reinhart said.

Reinhart also said that resale as an industry should be treated like other nascent technologies contributing to a greater good, like electric vehicles and solar energy. As such, he’s calling for more government assistance as companies try to figure out ways to build new sustainability-focused technology.

“I’m a big believer that government has a role to play in bridging the economic and innovation gap that it takes to develop some of these new technologies,” he said.

Here are a few highlights from the conversation, which have been lightly edited for clarity.

How ThredUp has scaled its business
“We’ve built a lot of software, a lot of technology, we’ve put a lot of steel in the ground, [all] around the infrastructure for resale on the internet. In some ways, I describe us as really the infrastructure and backbone of how resale works on the internet. And so what I mean by that is: We have been innovating for more than a decade around, how do you take 400,000, 500,000 photos a day of clothing coming in? How can you move product around on carousels and conveyors to keep the cost down? How can you use photography to do image recognition? How can you use automated Bluetooth to do measurements and tagging? And so there are so many things. We’ve made an enormous amount of mistakes [on] over the past 10 years getting this right. But I think what we’ve built now is this incredible engine that can ingest anything at any time across these four distribution centers, and magically turn it into an online listing that makes a lot of sense for a buyer.”

Why resale should be treated like EVs and solar energy
“I think it’s a very privileged person who can say, ‘I don’t care about the price, as long as it’s sustainable.’ And, look, that is the way a lot of these things get started. Remember the the first computers… were super expensive. And so, I think, [with] any sort of big innovation around this, it does cater to people who have much higher willingness to pay. And I think that has been true in sustainability for a long time. So I think that in order to get mass adoption of these things, actually the government plays a big role. When government wanted to drive more adoption of solar panels, for example, tax credits were a big part of that. The upfront cost to install solar is very expensive. And so you could only make it work if the tax credits worked. The same thing for electric vehicles — electric vehicles are very expensive. Tax credits help bridge the gap. And I still think you’re in a world where if you really want to make government help drive adoption of EVs and solar, credits are going to continue to have to be a part of that. And so from where we sit on the resale side, we just think that there’s an opportunity for government to make similar investments to get either brands that produce more sustainably to fund fiber-to-fiber recycling, to incentivize companies like ThredUp or others to build better take-back and recycling programs. So I’m a big believer that government has a role to play in bridging the economic and innovation gap that it takes to develop some of these new technologies.

ThredUp’s stance on the rise of Shein and Temu
“It’s easy to have a boogeyman. And so it can be effective to find somebody to juxtapose what we’re trying to do against. And I don’t think we’re malicious about it. But, look, I do think the fight is real. And, despite what you think about Shein or Temu, they are taking advantage of a tax loophole in the U.S. And for many, maybe that’s good business, but we just can’t pretend it’s not a loophole. And so it just doesn’t seem fair for companies that produce in similar fashions overseas to be paying hundreds of millions of dollars in taxes. And so either the loophole needs to be closed where nobody pays it, or everyone pays it.”