Is The Second-Hand Market Really Sustainable?
There are only a few industries that are as wasteful as the fashion business, mainly because its core message to consumers revolves around buying new stuff all of the time. In the United States, approximately 11.3 million tons of textile waste - which accounts for 85% of all textiles - end up in landfills each year, as reported by Earth.org. The decline in the number of times a garment is worn has dropped by almost 40% since 2007 in the US and 36% in the last 15 years for the UK alone.
An effective solution that resonates with both brands and consumers is selling used clothing instead of discarding it. Second-hand markets have always been part of our history, from affluent individuals donating clothes to those in need to the allure of discovering unique vintage pieces through thrifting. This market has thrived exponentially in recent years.
For brands, selling second-hand items helps reduce the pressure to adopt more sustainable practices in manufacturing and marketing apparel. For consumers, it’s about factoring ecological and social considerations into their purchasing decisions, and supporting brands and retailers that claim to operate ethically. Consumers view buying used items as environmentally friendly, while brands promote their resale programs as essential components of their sustainability objectives.
The Environmental Aspect
If fashion retailers were to reduce production by one item for every used item sold, it could decrease apparel production by nearly 8% by 2027. However, this scenario is highly hypothetical and time-consuming, possibly exceeding the planet's available time. While the resale industry has been hailed for its environmental benefits in the fashion sector, its actual impact on driving textile circularity is actually very limited.
Online and offline marketplaces dealing with resale items have fallen short of expectations, with only a small fraction of used clothing being resold, contrary to the initial projections. In fact, according to BBC, Vinted posted a loss of €47.1m in 2022, while Depop of £59m in 2023. Many people sell their clothes to these platforms hoping they will find new owners, but in reality, most of the donated items are of insufficient quality for resale as they’re all cheap imports from China, Bangladesh, Cambodia, Vietnam, etc. Even when resold, the profit margins for these marketplaces are often not sustainable. For instance, ReCircled, a US-based resale platform, focuses on repurposing the majority of the used garments it receives. These clothes are repurposed for various purposes, including manufacturing yarns and producing composites used in construction and home goods. While upcycling old clothes into something new is good for the environment, there need to be way more businesses doing this in order for the upcycled second-hand market to thrive. We recently attended Stuart Trevor collaboration’s launch with London based vintage shop Beyond Retro. Together, they’re putting together some wonderful reworked vintage pieces that are to die for. The other business doing great things altering existing second-hand fashion is The Alterist, and we would love to hear from you if you know of any other amazing businesses like these ones!
The Financial Aspect
The financial viability of the resale segment remains uncertain due to profitability challenges. From local thrift shops to large online second-hand retailers, it's challenging to find pre-owned clothing businesses that are profitable.
These online retailers have been shipping out second-hand clothes for years, focusing on growth rather than profits, making substantial capital investments, and, in some cases, going public. Despite these efforts, profits have not been as expected, even for major players like ThredUp, Vinted, and The RealReal.
Processing second-hand items is labour-intensive and costly for businesses. Higher costs can lead to increased prices, which can surprise consumers looking for deals. Labour costs sometimes push the price of second-hand clothing above that of new items of similar quality. A recent investigation by The Telegraph labelled thrift shopping in the UK as a "rip-off" highlighting instances where used Primark sweaters were priced higher than new ones.
Despite being seen as an eco-friendly alternative to fast fashion, the resale industry's hidden reality is that second-hand fashion is often supported by sales of new clothes, just like many of the fast fashion brands. For instance, 80% of products on eBay, known for its second-hand offerings, are actually new. The expansion and technological advancements of the Swedish resale site Sellpy were funded by a strategic partnership with H&M, a company that primarily profits from selling large quantities of new fast fashion. If that’s the reality of the second-hand market, how sustainable can this industry be? We’d love to hear your thoughts on the topic. Feel free to comment below or get in touch to let us know your views!
[information sourced on bbc.com and retaildive.com
All images sourced on canva.com]