Posted in GreenBiz
April 1, 2022

It’s time for resale to grow up


This article originally appeared in our Circularity Weekly newsletter. Subscribe here.

When I was reporting for my piece in the 2022 State of Green Business report, focused on the 2.0 of resale, I was blown away by the numbers:

  • In the United States alone, the secondhand goods market is expected to grow to $77 billion in 2025 from $36 billion in 2021.
  • And last year, a lot of money was invested in the fashion recommerce space. For example, Trove, which partnered with Patagonia, REI and Eileen Fisher on recommerce programs, raised $77.5 million; French luxury resale company Vestiaire Collective raised $209 million; and Etsy acquired peer-to-peer e-commerce site Depop for $1.62 billion.

As Closed Loop Partners Managing Director Caroline Brown told me, “Right now, resale is the belle of the ball,” among a room full of other dancers trying to make the fashion industry more sustainable. (If that is even possible.)

I recently learned about Treet, a San Francisco-based recommerce venture that partners with fashion brands to help their customers buy and sell used items directly from one another in exchange for cash or credit back to the brand. It has launched resale sites with nearly 30 brands, with footwear company Bryr, children’s clothing brand Firebird, and swimwear maker Maaji among them. In May, Treet raised $2.8 million in a seed round with nine backers including Matchstick Ventures, Techstars and BAM Ventures.

For Treet co-founder and CEO Jake Disraeli, starting the company started with this question: “How can we open up access for any brand to be more sustainable and circular through resale, very easily and affordably?”

Before Treet, Disraeli actually was exploring a different business idea that he’d left a previous job to pursue. It would have been a men’s apparel company that would incorporate circularity — takeback and resale — from the onset.

The secondhand goods market is expected to grow to $77 billion in 2025 from $36 billion in 2021.

“At the time, I couldn’t find any solutions that would help me,” Disraeli told me recently.

That was in March 2020. When I think back to that time, a handful of resale turnkey-type companies, such as ThredUp and The Renewal Workshop (recently acquired by supply chain management company Bleckmann), come to mind. But Disraeli had something different in mind when he later launched Treet in January 2021.

Here’s how Treet differentiates itself from its competitors: The core of its platform is a peer-to-peer resale. Customers list items on the Treet resale sites, which are created to look similar to the fashion brands’ original websites, and when an item is sold, they send it directly to another customer. The brands are also able to list used items on their Treet sites. And they earn a commission on each sale — whether it’s their own listing or those of their customers.

“One of the first things that we learned from brands when we launched last year was that brands also wanted to use this as a place to sell returned inventory, production units, sample sale stuff, all these items that they don’t have a path to resell as new,” Disraeli said.

Before a sale occurs, Treet reviews listings before they go live, making sure the items are what they say they are and that the right image is loaded into the site. The company can verify if the person listing the item actually purchased it. “Through our integration with our brands’ main site, we’re able to pull up their customers’ order history,” Disraeli explained. “Customers can list items in a few clicks from their order history and our team reviews each listing before going live.”

Once someone buys an item, Treet sends the seller a prepaid shipping label that is used to deliver it to the buyer. When the buyer receives the order, they verify it and then the seller is able to redeem their funds — in the form of cash or credit. When sellers opt to redeem their funds as credit, the brands receive 90 percent of the sale, according to Treet.

“We have all these checks and balances in place to make sure it’s a safe place to transact, and the best place to buy,” Disraeli said.

So, let’s say you, dear reader, work at a fashion company that wants to explore the possibility of resale and don’t want to do it yourself. How would you get on board with Treet?

First, you’d have a conversation with the company’s team so that they understand what resale means to you and what your goals are, which would inform how they need to build out the program. From there, you’d download Treet’s Shopify app, fill out an onboarding questionnaire, and give them access to some digital photos. From there, its team builds the site, and it’s ready to launch. This all happens in about a week, according to Treet.

That feels easy enough. So what are Treet’s goals?

“Overproduction is one of the biggest problems in the fashion industry. It’s just like we’re just producing so much,” Disraeli told me. “Our goal is to make resale so viable and so interesting for brands that they can reliably count on the resale of their clothes when they’re thinking about how much to produce the first time around. I will say that resale, in this way, is still in its infancy.”

Overproduction is one of the biggest problems in the fashion industry. It’s just like we’re just producing so much.

ThredUp recently published The Recommerce 100, an independent review of brands and retailers that have launched resale programs and their potential environmental impact. According to the review, there are about 40 companies with branded resale programs, and 43 more with take-back only programs, which the review described as “evergreen apparel collection programs intended for clothing donation, recycling or resale.” In a disclaimer, ThredUp acknowledged that it cannot “guarantee that the Recommerce 100 includes every fashion brand selling its own pre-owned products online to U.S. shoppers.” And it plans to add more brands to the list on a monthly basis.

The review also noted that on average, resale makes up 0.01 percent of the top brands’ total revenue.

Those numbers and Treet’s goal got me thinking: What will it take for more fashion brands to partner with services such as Treet, fellow peer-to-peer resale company Recurate and others? And once they do team up with these resale companies, and prove that it’s a viable part of their business models, will brands start to make less new stuff?

[Continue the dialogue on how to build a circular economy with forward-thinking leaders at Circularity 22, taking place in Atlanta, GA, May 17-19.]

 

April 1, 2022 at 02:03PM

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