Selling your old clothes is now a billion-dollar industry
Popular consignment clothing chains like Buffalo Exchange, Crossroads Trading Co., and Second Time Around have opened a number of incredibly successful locations across the United States.
Reselling clothing has exploded into a $16 billion industry, according to Racked.
While the stores' policies vary, they all tend to offer shoppers cash or store credit in exchange for their used clothing.
Crossroads Trading Co. pays sellers 35% of the price they will sell the item for in the store, and the franchise offers sellers a trading option as well. Clothes can be traded in exchange for 50% of the price the item will sell for in the store.
Second Time Around offers sellers 40% of the final selling price of each item, with different rates for luxury apparel. Buffalo Exchange offers sellers 50% of the sale in store credit or 30% in cash, according to Racked.
The stores say many customers believe their clothing is worth more than it is.
"It's hard for people to understand the value of their own stuff. A lot of times, people think their items are worth more than they actually are," Justin Goellner, a manager at Buffalo Exchange in Chelsea, told Racked.
The success of consignment culture shows that shoppers are getting more frugal and fleeing traditional luxury brands.
"The top 10 luxury brands, including Prada, Gucci, and Cartier, lost 6% in combined brand value, or about $7 billion, from 2014 to 2015," according to Quartz.