The news: ThredUp posted its strongest revenue growth in nearly four years in Q3 as rising price sensitivity fuels interest in online resale.

• Active buyers surged 26% YoY as ThredUp touted its “best quarter for new buyer acquisition” in company history.
• The strong performance led the company to boost its Q4 outlook: It now expects revenues between $76 million and $78 million, up from its prior forecast of $73 million to $75 million.

The trend: Resale is having a moment. The end of de minimis import exemptions and new tariffs on apparel are making buying secondhand more appealing to price-sensitive consumers, while younger generations are embracing resale for its affordability and creative possibilities.

• Tariffs are a “structural tailwind” for ThredUp, CEO James Reinhart said, as higher prices across the apparel industry enhance the resale platform’s value proposition.
• For competitor Depop, the greater opportunity lies in engaging Gen Z and millennial consumers, who are drawn to the app’s social features as well as the ease of buying and selling. US GMS on the platform jumped nearly 60% YoY in Q3 and is expected to keep growing as the company continues its largest marketing push to date.
• Fashion resale was a “notable” contributor to eBay’s GMV growth in Q3, thanks to interest in secondhand luxury, streetwear, and apparel, CEO Jamie Iannone said during the earnings call.

Our take: Surging resale demand is a major opportunity for emerging platforms like ThredUp and Depop, which remain relatively small players in ecommerce. We expect fashion online resale platform sales to expand 10.4% this year, nearly double the rate of online apparel, footwear, and accessories sales.

• At the same time, operational challenges to online resale, such as the cost of inventory processing and authentication, are challenging marketplaces’ ability to turn a profit.
• However, those hurdles will ease due to the growing sophistication of AI tools as well as the shift toward a peer-to-peer marketplace model—which Depop has fully embraced and ThredUp is currently testing.