Parents Swap Kids' Stuff on Web-based ThredUP

James Reinhart in November 2008 found himself staring at a closet filled with clothes he didn’t want to wear. Sensing that his sartorial dilemma wasn’t unique, the then-Harvard Business School student began contemplating ways to solve the problem. Ten months later, he and two friends, Oliver Lubin and Chris Homer, launched ThredUP, a Web-based company to facilitate adult clothes swapping. That approach fizzled. The real potential, they realized, was in kids’ gear, where the forced obsolescence of goods drives demand. “Once you start dipping into the data, it turns out to be a $6 billion-a-year market,” says Reinhart.

By age 17, the average American has shelled out roughly $14,300 on clothes and outgrown about 1,300 items, according to U.S. Agriculture Dept. data and a ThredUP survey of 412 mothers. ThredUP, which in April 2010 relaunched as a kid-to-kid service, taps into the resulting secondhand market. Members bundle roughly 15 “new to you” items in a box, then log the contents online by size, brand, gender, and style. Other “thredders” can then purchase the box for $5, plus the cost of shipping, and must eventually contribute packages of their own. For $30 a year they can also become premium members with advanced access to newly posted boxes. Reinhart estimates that users save $50 per box by swapping rather than buying secondhand.