Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use Secondhand Marketplaces to Acquire Customers
Transcript
- Lucas: If you're a DTC marketer, the secondhand market is probably not your first thought when you think about customer acquisition. But in the last eighteen months, some pretty sharp brands have started treating resale platforms like ThredUp and Depop as acquisition funnels, not just end of life channels. Luna: And not just for sustainability messaging. I've seen data that suggests these buyers convert at higher repeat rates than brand-new customers. Lucas: Exactly. So let's start with a specific case — Outerknown. That's the menswear brand founded by surfer Kelly Slater, built on sustainability. In early 2025, they launched a partnership with ThredUp called 'Outerknown Again.' The idea is straightforward: customers send back used Outerknown gear, get store credit, and ThredUp handles the listing, photography, and fulfillment. Outerknown gets a cut of each resale. Luna: So it's a revenue share model, not a fixed fee. Lucas: Yes. And here's where it gets interesting for acquisition. ThredUp has over 120 million registered users. Outerknown's email list is probably in the low six figures. By putting their product on ThredUp, they get in front of millions of shoppers who are actively looking for secondhand deals, many of whom have never heard of Outerknown. That's a huge top of funnel play. Luna: But those shoppers are looking for a discount. How does the brand maintain its premium positioning? Lucas: That's the clever part. Outerknown doesn't dump past-season inventory at fifty percent off. They create a dedicated 'Again' section with its own branding — the photography is still high-end, the descriptions are curated, and the pricing is maybe forty to sixty percent of retail, not rock-bottom. The message is: 'This product has lived a life, and that gives it character.' It's a premium take on used. Luna: So it's almost like a sub-brand. Lucas: Right. And the early numbers support the strategy. Outerknown shared that customers who first purchased through ThredUp have a forty percent higher repeat purchase rate than customers acquired through paid social. That's a huge difference. The average order value is about twelve percent lower than their direct to consumer average, but the customer acquisition cost is effectively zero — they're not paying for ads on ThredUp. They're just sharing revenue on each sale. Luna: Zero CAC on that first transaction is almost unheard of in DTC. Typical acquisition costs for apparel brands are pushing sixty to eighty dollars on Meta. Lucas: It's a massive arbitrage. And it's not just Outerknown. I've seen Patagonia's Worn Wear program — that's more of a trade-in model, but they also partner with third-party platforms. And some smaller brands are using Depop's brand store feature to list directly. Depop's user base skews Gen Z and young millennials, which is exactly who many DTC brands are trying to reach. Luna: Let's talk about the stigma angle. For years, secondhand was associated with cheap or thrifty. How do brands overcome that when their whole identity is built on being premium? Lucas: I think the stigma has mostly flipped in the last five years. Especially with younger consumers, buying secondhand is a signal of savvy and environmental awareness. But brands still have to be careful. If you list a $200 shirt for $30, you train customers to wait for the secondhand version. That hurts full-price sales. So the key is to price the secondhand items at a level that feels like a deal but doesn't cannibalize full-price demand. Outerknown's forty to sixty percent range seems to work. Luna: And you also need to control the narrative. If you just dump inventory on ThredUp without any brand framing, it looks like clearance. Lucas: Exactly. That's why Outerknown calls it 'Again' and creates a distinct experience. Another brand that's doing this well is Rothy's — they have a dedicated resale platform called Rothy's Re:New, but they also list on Poshmark through a partnership. On Poshmark, they tag the listings with 'Authenticated by Rothy's' to signal that the product is verified. That builds trust. Luna: Does this work for categories beyond apparel? I'm thinking about DTC furniture or electronics. Lucas: It's trickier. Furniture is big and shipping-heavy. Electronics have rapid depreciation and data privacy concerns. But there are examples. Burrow, the DTC sofa brand, has a trade-in program where they refurbish and resell returned sofas. They sell them on their own site under a 'Open Box' section. That's more of a direct channel, but the principle is the same — turning returns into a new revenue stream and an acquisition touchpoint. Luna: Let's zoom out. What are the key metrics a brand should track if they're considering a secondhand marketplace? Lucas: First, you want to track the repeat purchase rate of secondhand customers versus other channels. That's the number that tells you if you're acquiring quality customers. Second, the average order value comparison — if it's too low, you're just training bargain hunters. Third, the return rate. Outerknown's return rate on ThredUp is actually lower than their direct channel, because the buyer knows exactly what they're getting and has lower expectations. And fourth, the cannibalization rate — how many of those secondhand buyers would have bought full price otherwise. Luna: And how do you measure cannibalization? Lucas: It's tough. You can run matched cohort studies. Compare customers who saw a secondhand listing versus a similar control group that only saw full-price options. Or you can look at the share of secondhand buyers who are new to the brand — if it's high, cannibalization is probably low. Outerknown's data showed that over seventy percent of their ThredUp customers were new to the brand. That's a strong signal. Luna: So the math works. Lower CAC, decent AOV, higher retention. Lucas: If you execute it right. Look, this isn't a silver bullet. If you're a brand with a weak brand identity, secondhand just becomes a race to the bottom. But if you have a strong brand and a product that holds its value, secondhand marketplaces can be a surprisingly efficient acquisition channel. It's worth testing. Luna: And the sustainability angle is a nice bonus, but the unit economics need to stand on their own. Lucas: Absolutely. If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. Acknowledge it warmly, then we'll keep going. Luna: Yeah, it's a small way to keep the conversations going. And we appreciate it. Lucas: Alright, so let's talk about one more thing — how brands can optimize their listings on these platforms. Most brands just export their product feed and let the marketplace handle it. But the ones that see the best results treat it like a separate creative channel. They write new descriptions that emphasize the product's history, they use lifestyle photos, and they include sizing tips to reduce returns. Luna: And they should probably test different price points. Outerknown started at sixty percent of retail and gradually moved to fifty percent based on conversion data. Lucas: Right. And one thing that surprises me: the sell-through rate on ThredUp for Outerknown is over eighty percent within thirty days. That's faster than their own site for full-price items. Partly because ThredUp's audience is in a buying mindset — they're there to purchase, not browse. Luna: So the platform itself is a conversion machine. Lucas: Exactly. And that's the real insight. DTC brands spend so much time trying to drive traffic to their own site, but these secondhand marketplaces already have the traffic. The question is whether you can capture it profitably. For Outerknown, the answer seems to be yes. Luna: I'm curious — what about cross-border? Do these platforms work in different countries? Lucas: It's mostly us centric for now. ThredUp only operates in the US. Depop is global but has stronger penetration in the UK and US. Vinted is huge in Europe but mostly peer to peer, not brand-friendly yet. So for a European DTC brand, the options are more limited. But it's evolving. I'd expect ThredUp to expand internationally in the next couple of years. Luna: So the takeaway: if you have a durable product and a strong brand, secondhand marketplaces are worth a serious test. Lucas: Start small. Put a hundred units on ThredUp or Depop, track the customer journey, and look at repeat purchase behavior. The data will tell you if it's worth scaling. And if it works, you've found a channel that pays for itself. Luna: And that's a rare thing in DTC these days.