Young Gen Z friends enjoy shopping and buying in a secondhand clothing shop.
Both Millennials and Gen Z are driving several trends, one of which is tied to sustainability and that is the secondhand anything marketplace. Not only are these items more affordable but the entire ideal of utilizing a product completely lines up with these two growing populations. With companies like Patagonia and its ‘worn wear’ initiative, wearing secondhand clothes never felt and looked so cool. And it’s a big marketplace getting bigger.
E-commerce sites and apps such as Depop, Poshmark and the RealReal are seeing growing demand as the online resale market in the U.S. is expected to top $69.2 billion this year, up from $55.9 billion in 2020. And this is just clothing. High end watch brands like Rolex, Patek Philippe, Audemars Piguet and Richard Mille have not increased their production runs ensuring that the luxury used watch marketplace continues to thrive. According to McKinsey, a U.S.based consulting firm, the pre-owned luxury watch market was worth $18 billion in 2018; it is poised to grow to $30 billion by 2025.
For startups, you can create new niche marketplaces where slightly used items are actually valuable. You might say, but it has all been done before, there are already companies out there selling all the used goods. And there is that big used ‘mall in the sky’ eBay. But you would be wrong. Most of these used items are sold by individuals and might not convey a reputable brand. Think Carvana. Did you ever imagine that a ‘used car online marketplace’ would seriously challenge Ford, GM and the rest of the car companies? Not only has Carvana survived, they have thrived. They quickly built a good brand, a clean online interface, the ability to look nationally at all vehicles and delivery to your house.
The same can still be done for the items listed below. As you see the list, does a national brand come to mind?
– Electronics: If you love your MacBook 11 inch, why settle when Apple no longer makes it. Get one online from a new startup specializing and warrantying only used Mac laptops.
– Jewelry: Some people wear jewelry like a fashion item. When it goes out of fashion, they want to sell it and buy something else. What brand should they go to?
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– Furniture: People might not donate their furniture to Goodwill as they believe it is still in good shape and too expensive to donate. What brand can they sell their furniture to?
– Exercise equipment: Every year, people make New Year’s resolutions that involve getting more fit. They rush out, join a gym, subscribe to Peloton and buy equipment. Sadly, less than one in five people will actually achieve their goals. What to do with all that equipment?
– Tools: Remember when you moved to that neighborhood with all the trees and you bought the best chainsaw money could buy? Now, it’s sitting in your garage. Someone wants it, how will you find them?
– Children’s toys: Kids grow up. Their toys were amazing, some pretty valuable. If the former Toys R Us was a major brand, who is the used toy’s marketplace leading brand?
– Musical instruments: Music equipment is expensive. A guitar, a clarinet, or perhaps even a piano. If you wanted a great used musical instrument, where would you go?
– Camping gear: Ah youth. In their 20’s, they go camping everywhere. Then they get serious about their career and have kids. Their camping gear needs a new home.
– Bicycles: The current trend growing rapidly are ebikes. The battery distances, speed and price are all improving. This will ultimately lead to a glut of traditional mountain bikes and first generation ebikes. What brand do you trust to buy one from?
The secondhand marketplace is not only going to grow in the next few years, it is here to stay for the next 20 years. Pick a large category, figure out an operational business model, focus on a niche (especially valuable items people want) and create a startup. Perhaps you will be the next Carvana of your industry.
