Online Consignment Stores Flourishing In Bay Area

BRISBANE (CBS SF) – Racks and racks of used clothing fill the massive Bay Area warehouse of online consignment fashion startup ThredUp.

The company sells 30,000 items of clothing each day and is among the leaders in one of the hottest online ecommerce trends in the country – selling second hand clothing.

"We've got tons of items," said company executive James Reinhard. "It's the world's largest online thrift store."

ThredUp receives bags of used clothing sent in from people across the country. If the items are clean and in nearly new condition, they get listed on the company's website.

"The pricing on ThredUP is 80 percent off of what somebody would pay in a retail store," Reinhard said.

With so little profit, why would anyone ship their used clothes to ThredUp?

"Ultimately what they want is to get stuff out of their home," he said.

There's now a wide range of online consignment sites and the competition has never been tighter. "The Real Real" targets the market's high end.

As an example, the company's Graham Wetzbarger points to a Hermes Birkin Bag and says the pricetag online is "around $38,000."

CEO and founder Julie Wainwright says the San Francisco-based "The Real Real" receives about 150,000 items a month to re-sell.

"As a percent of our business, fashion apparel is bigger than handbags," Wainwright said.

USA Today's Charisse Jones says the explosive growth of the online consignment industry can be traced to eBay.

"eBay is definitely the granddaddy of these online consignment shops," she said. "I think it made it fashionable and cool to sell your things online And it also made it very cool and fashionable to buy things that other people had owned before, online."