ThredUP is an online consignment and thrift store ("fashion resale marketplace") founded in 2009 in Cambridge, MA. Consumers can buy like-new, carefully vetted brand-name clothing from thredUP’s online store at discounts of up to 90% off of the original retail prices. One of the original operational procedures was as follows (its payout process is more complicated now): Consumers can send in their unwanted clothing articles for ThredUP to resell. ThredUP’s professional buyers go through the articles of clothing sent in and assess the salability of those items. ThredUP only accepts certain brand names of clothing, including brands like Adidas, Ann Taylor, Kate Spade New York, and Lululemon Athletica. Items must also be in new or like-new condition. When ThredUP accepts an article of clothing to list on its online store, one of two things will happen: If the clothing article will be listed on the ThredUP website for under $60, the original owner (seller) will receive an immediate payout from thredUP (via store credit or cash through PayPal.) If the item will be listed on the ThredUP website for more than $60, the item is accepted on consignment and the payout to the original owner will occur once the item sells. A consigned item can be reclaimed by the owner after it is listed on thredUP’s website. After 98 days on the website, if the item has not sold and has not been reclaimed by the original owner, the item becomes the property of thredUP. If clothing articles do not measure up to thredUP’s standards, the items are returned to the original owner if he/she has indicated that he/she wants to have the items returned. Otherwise, thredUP will either sell the unaccepted items to third party sellers or pass them onto textile recyclers to be upcycled.

Question

Have you ever used thredUP or a similar consignment service? If you have, would you do it again? If you haven't, why not?

Consider the following situations:

Assume that a J. Crew long sleeve button-down shirt that originally cost $88 is sent into thredUP. This shirt is examined by a professional buyer for thredUP, who determines that the item should be listed on thredUP’s website at a selling price of $21.99 and that the original owner (the seller) should receive $3.50 for the item. Once thredUP accepts the J. Crew shirt, who owns it – thredUP or the original owner? Whose balance sheet should that J. Crew shirt be shown on and at what dollar value?

Assume that a Saks Fifth Avenue trench coat that originally cost $340 is sent into thredUP. This trench coat is examined by a professional buyer for thredUP, who determines that the item should be listed on thredUP’s website at a selling price of $92.99 and that the original owner (the seller) should receive $15.99 for the item when it sells. Once thredUP lists the Saks Fifth Avenue trenchcoat on its website, who owns it – thredUP or the original owner? Whose balance sheet should that trenchcoat be shown on and at what dollar value? When, if ever, does ownership of that trenchcoat transfer to thredUP?

Answer rating: 100% (QA)

Have you ever used thredUP or a similar consignment service If you have would you do it again If you ... View the full answer