ThredUp (the online thrift store your closet clean-out gets mailed to) has the best gross margin in resale and still can't make a dollar. Time to shut down the warehouse model and sell the parts.

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here 😉.

ThredUp (the 17-year-old online thrift store where you make a buck to shop with them cleaning out your closet) is slowing down while their competitors lap them and the Resale market explodes.

They’re growing too slowly. Guiding to $346M Rev this year to hit the breakeven scale ($408M in rev), just to stop bleeding money.

Link to ThredUp's FY 2025 earnings (10-K, filed 3/2/26, SEC EDGAR)

(GAAP, FY2025 each)

(1) ThredUp doesn't disclose GMV or AOV in dollars. ~$51 is revenue per order (net of seller payouts), so it understates the cart. RealReal figure is AOV on GMV. Only The RealReal runs the same managed-consignment model. Sources: ThredUp FY25 10-K, The RealReal FY25 10-K.

Vinted isn’t a public company but just passed $1B in Rev at an $8B and is scaling past both players with an asset light model. Consumers buy and sell directly with each other. Not taking on an inventory or inspections.

You can’t spend $1.09 to run the business to make $1 in Gross profits.

The unit economics are completely broken. To pay for customers to ship you product (Closet clean outs), Return + Clean + Restock them to then pay to ship those products out to new customers is a losing game. Especially at a $51 selling price.

Founded:

Aha Moment:

Growth:

Model:

Where We Are Now:

Here are the 3 ways we save any value in this biz to return some money to our shareholders.

ThredUp already built their best offering than gave it away.

Resale-as-a-Service launched in 2019. Gap, J.Crew, Madewell, Abercrombie, Steve Madden, Lands' End and Reformation all run their trade-in programs on ThredUp. 60+ brands are on it today.

Brands get ThredUp's tech + warehouses for free. And ThredUp eats the cost of shipping every $20 Gap tee. Back and Forth.

Meanwhile the brands are the ones winning. 

Reformation customers spent 6x their trade-in credit back at Reformation. ~$1.2M of new sales.

You're never going to make good profits shipping clothes back and forth for under $100. 

The RealReal has a $594 AOV and still runs a -3% operating margin on $693M of rev.

The move: The Brand Closet. 

They still have their branded resale program on site. + 1 resale marketplace owned by the brands, powered by ThredUp. 

Gap, J.Crew, Abercrombie and Lands' End list their used stuff in one place. One cart across 60 brands.

Brands pay a platform fee + a per-item processing fee. They keep the customer and the credit. ThredUp stops being the store and becomes the plumbing.

Software doesn't need $408M of rev to break even. Hypothetical math: 60 brands x $250K a year = $15M of near-pure margin before a single item ships.

Takeaway: Sell the thrift store in a box.

ThredUp operates 4 warehouses inArizona, Georgia, Pennsylvania, Texas. 

They process 100K+ unique items/day. They photographed, priced and shelved 21M items last year.

ThredUp’s problem: it runs this massive machine on $311M of rev. The breakeven point is running away from them. They aren’t at the scale or scaling fast enough to grow into the facilities at this scale.

Margins on cheap clothes are thin no matter who owns them. So the buyer has to bring the volume. Spread the warehouse cost across a giant store base and the math flips.

The buyers:

Same lesson as Rent the Runway. A great reverse-logistics engine is a feature for a giant retailer. Not a standalone biz.

Takeaway: The warehouse is worth more inside someone else's store.

Vinted rocketed past ThredUp to $1.1B in rev last year (+38%) $62M of profit with a $8B valuation in April.

ThredUp is worth ~$289M.

Vinted won by doing running the opposite playbook. Sellers snap, sell and ship what they’re selling. Vinted never touches the product. 

ThredUp launched Direct Listing in June to copy it, but it’s too little too late.

Vinted's CEO is "testing" the US. ThredUp is the shortcut to dominating the market:

And the price tag is already set. eBay paid ~$1.4B for Depop this year. At ⅕ the price Vinted can quick enter and scale the market.

Pay a 50% premium for ThredUp and it's ~$430M. Under 5% of Vinted's valuation for an instant US biz.

Vinted moves the buyers to peer-to-peer, keeps the brands and sells the warehouses to enter the largest resale market in the world.

Takeaway: There’s no growth play that catches up to Vinted at this point.

This is another great idea I’d love to see in the world and a terrible biz model to execute the vision.

They’re a decade old biz so I’ll cut them an ounce of slack, but HOW IN TF have they not realized yet that there is no money in shipping a <$100 product from Customer -> Warehouse -> Cleaning restocking -> Selling it again.

Even in Fashion.

It’s hard to say that the Real Real even works. They aren’t making any money at scale because this isn’t a business model that benefits from economies of scale.

If the company is going to take responsibility for quality checks and authenticity, every single item needs to be inspected. It’s counterintuitive but that’s a biz that gets more, not less, expensive over time.

More Complexity, More Storage. More Marketing costs. Less talent density.

Vinted will eliminate this market because they are moving bottom up and are outsourcing all of the costs to customers.

But there’s so little margin in most categories you have to make it frictionless.

And the sleeping giant at the bottom of this market is Facebook marketplace waiting to Zuck a great idea.