6,000 garments and over $1M in sales: How to tell if a resale program is successful

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Brands tend to get lots of kudos and fanfare when they launch a resale program. For some, this is the completion of the goal — the box is checked and teams will move on to their next marketing strategy task. 

But for others brands that are implementing resale as a circularity tactic within their sustainability strategy, the real work is just beginning. 

With consumer adoption of secondhand on the rise, the sustainability narrative — and goals — of brand-led resale need to evolve to focus on achieving growth and scale. This is because resale programs aren’t actually generating sustainability benefits for the brands behind them until they’ve scaled to a level that results in brands replacing some revenue from the production of new things from the revenue generated by selling the same things multiple times. 

Here are the key milestones on a pathway to scaling a resale program that can generate brand, financial and environmental benefits:

1. Consistently grow resale sales and inventory supply year-over-year 
2. Achieve resale program profitability
3. Incrementally displace the production of new products with the revenue from resale without affecting overall net sales 

When the third milestone is accomplished, a brand can rightly claim that their resale program is generating the sustainability benefits of circularity because it’s disconnecting revenue creation from the consumption of finite resources and production of waste and pollution.

Designed to scale

For brands that are serious about leveraging resale to create growth and impact, three things need to be top of mind:

1. Program Design (branding, user experience, pricing and incentives, assortment and integration into existing sales channels and returns processes): Great resale program design creates a seamless and frictionless user experience that’s comparable to shopping new and that introduces and/or creates a deeper connection to the main brand. 

2. Operational Design (warehousing and fulfillment, transportation and shipping, integration into existing systems and processes): Margins are a critical output of the operational design of a resale program, and tradeoffs of vertically integrating a program versus the lighter lift of outsourcing operations should be deeply considered.

3. Investment to Scale (marketing and PR, innovation and experimentation): Brands need to be ready to leverage their marketing prowess and budgets to build resale awareness and invest in new channel experimentation and expansion. 

Every brand is different — and that uniqueness should carry into the design of its resale program. The point is to meet customers where they are in the resale ecosystem and then take them farther. An illustrative example of how this works is Hand-Me-DÔEN by fashion retailer DÔEN.

Hand-Me-DÔEN is a community-sourced resale program where customers join the resale community by selling their DÔEN garments directly to the brand via a trade-in platform and shipping them to the company’s warehouse near Los Angeles. 

Trade-in is offered daily, but resale drops are only offered quarterly for a few days. Trade-in participants earn early access to shop the pre-loved assortment before it opens to the public. For anyone who is a DÔEN fan, early access means a lot. Every quarter is a fresh start and people have to regain their early access through trade-in again. 

Reflecting on the list above, several factors can be credited with contributing to the success of DÔEN’s resale program:

Program Design: The program increases brand access by bringing new customers to DÔEN without brand dilution. The strategic cadence of resale drops mitigates potential inventory supply challenges. Trade-in is simple and transparent — pricing for trade-in is 50 percent of what the brand can resell the item for, which is presented in the customer’s virtual closet that shows all their past DÔEN purchases.

Operational Design: Vertically integrating Hand-Me-DÔEN’s operations in the retailer’s warehouse allows for total control of assortment and planning and flexible staffing that can ramp up and down as needed.

Investment to Scale: Building the resale program on DÔEN’s main website allows people to use the same e-commerce platform and shopping cart to purchase new and used items together — all in a familiar space. 

In the first year of the program, which started in 2022, over 6,000 preloved garments were sold and the brand accepted 98 percent of the nearly 9,000 garments received from customers through trade-in.

Also in year one, nearly 20 percent of resale purchases came from new customers and the program was financially profitable, with over $1 million in sales. Importantly, this was achieved without including the incremental income derived from customers using the gift cards they’re issued through trade-in in the resale P&L. In the second year, the program grew 11 percent. 

DÔEN has achieved resale growth and profitability — the first two milestones on the way to achieving sustainability benefits for the brand through circularity — but it has not yet displaced production of new products. For a brand that’s barely a decade old, resale inventory supply is relatively limited. “We want to have a robust re-commerce program in 10 to 15 years,” says president Holly Soroca. “We’re building up the groundwork now to set this up to be a long-term part of our business.”

Looking forward

Given current economic conditions and tariff chaos, there may be no better time for brands to harness the now-normalized consumer behavior of shopping secondhand and commit to building and scaling profitable resale programs. When organizations recognize the brand value of resale, they become intentional about program design and “their resale programs are not just on-brand, they are actually brand-accretive in that they embody the brand so well and speak to customers so completely, that they raise the brand up in the eyes of consumers,” notes Brendan Condit, Director of Circular Business Models at Anthesis. 

This is the type of resale program that has the ability to scale economically. What they avoid is a “set it and forget” approach, as characterized by Peter Whitcomb, CEO of Tersus Solutions, who adds: “To thrive, a branded resale program requires constant investment and nurturing. If done well, the most successful brands have seen many years of steady and profitable growth.” These years of steady growth aimed at resale revenue targets will enable brands to displace the production of new things with the revenue of selling used things — and make good on the sustainability promise of resale.