While many in fashion are lamenting the problems that the Trump administration’s tariff policies are having on their business, one category is seeing a potential opportunity: resale and secondhand fashion.
On Monday, the publicly-traded resale company ThredUp provided Glossy with data from its upcoming 2025 Resale Report which, in part, surveyed customers and retailers about their feelings about the tariffs. On the consumer side, around 60% of customers said they expect tariffs to make apparel more expensive and that they would seek out more affordable options like secondhand, in response. On the retailer side, 80% said they expect the tariffs to disrupt their business this year, and 54% said they see resale as a “more stable source of clothing in the face of potential tariff fluctuations.”
Those figures present a golden opportunity for the resale sector, according to ThredUp CEO James Reinhart. Resale stands to benefit both from tariffs on low-cost goods and from proposed legislation favoring circularity. In response, resale companies are putting more investment into new tools like AI and seeing their profitability grow.
“The evolving landscape of tariffs and import regulations presents a fascinating dynamic for both the resale and broader apparel industries,” Reinhart told Glossy. “While these changes introduce potential challenges, particularly for brands reliant on rapid, low-cost imports, they also create significant opportunities for resale platforms. With consumers prioritizing value, especially amid economic uncertainty, secondhand apparel offers a compelling alternative.”
The idea is intuitive; when the prices of full-price goods go up, lower secondhand prices become more appealing. Fashion resale companies have for years positioned themselves as better alternatives to fast fashion companies like Shein and Temu, offering lower prices without the quality and ethical compromises that come from buying fast fashion.
Matt Kaness, CEO of the online thrift store GoodwillFinds, said that now is the right time for resale companies to seize market share of value-driven customers away from low-cost retailers like Shein or Temu.
“The biggest thing we [resale companies] have in common is we see fast fashion — generally low-price, low-quality items with a negative impact on the environment — as our competition,” Kaness said.
He added that other factors, like proposed legislation in the U.S. mirroring that in Europe, would give resale an even greater advantage than it’s had before. The Americas Act, introduced in Congress last spring, would potentially offer millions in tax credits and incentives for resale companies to do business in the U.S. The European Union’s impending Extended Producer Responsibility laws, which make companies responsible in part for what happens to their goods after they’re sold, is already being copied in places like California, where a similar law passed in October.
“If the U.S. adopts a model similar to Europe where there’s mandated collection of used apparel and goods, that would accelerate the resale of garments and goods back into the economy instead of going overseas,” Kaness said.
Both ThredUp and GoodwillFinds, along with other major fashion resale companies, are in growth periods. ThredUp’s revenue was up nearly 10% in the last quarter of 2024 to $67 million. GoodwillFinds has expanded from four to 18 regions of the U.S. and increased its general merchandise value to $25 million last year. Meanwhile, The RealReal reported earnings on February 20, showing 14% revenue growth in the last quarter of 2024. Both TheRealReal and ThredUp are profitable now and are focused on increasing profits in the coming quarters.
The RealReal’s optimistic view on future quarters highlights another bright spot for resale: AI. The RealReal, GoodwillFinds and ThredUp are all making use of AI behind the scenes to sort through products. The RealReal’s svp of finance, Caitlin Howe, said on the company’s earnings call that this year that The RealReal will focus on implementing Athena, its new AI tech, to manage product processing. Athena uses visual recognition to automatically populate product information, which is then checked by a human.
“More accurate item attribution results in improved search, higher customer satisfaction, lower returns, better pricing accuracy and quicker time to launch, and we are just getting started,” Howe said. “By the end of the year, we expect Athena to touch almost half of the items coming into our authentication centers.”
GoodwillFinds uses AI to generate production information, plus it has an in-house AI tool called Gem, which now fields around 70% of GoodwillFinds’ customer interactions. ThredUp, meanwhile, uses AI for image generation and visual search, and offers an AI chat-style assistant for shoppers. A ThredUp representative said the company will share more about its AI efforts in its upcoming earnings call in March.
