Retail data came out Thursday showing a 0.4% increase in sales for the month of September. And, out of all that purchasing, odds are that a sizable chunk of it was clothing. But that’s not to say that all the clothes Americans are buying are new.

Last year, the U.S. market for used clothing grew seven times faster than that for new clothing, presenting an obvious business opportunity. There are numerous platforms for buying secondhand clothing, including Depop, ThredUp, Poshmark, and The RealReal, that are poised and ready to capitalize.

And yet, those platforms aren’t consistently profitable.

Amanda Mull is a reporter for Bloomberg Businessweek. She joined Marketplace’s Amy Scott to talk about why the business of used clothes is so challenging. An edited transcript of their conversation is below.

Amy Scott: Okay, so I just went to a big pop-up vintage market here in Baltimore, Vintagepalooza it’s called, and the place was packed. I mean, it really seems like the demand for used clothes is there. So why aren’t these sites making money?

Amanda Mull: Yes, used clothes have never been in as much demand as they are now, especially among buyers under 40. I think that people are a little bit bored with what’s available new now. There’s a huge abundance of new clothes, but a lot of it looks sort of the same. So like, used clothes are a great way to find something that looks like a little bit more interesting and might be better quality. So like, clearly, there is a business case for opening these types of really high-scale, far-reaching marketplaces online. But the problem is that the business of used clothing is just like a really fiddly, high-touch, labor-intensive, at times, gross business, and trying to do that at a really, really huge scale and across, like, a really complicated logistics setup costs a lot of money in a way that the prices of used clothing can’t necessarily offset.

Scott: You also write that it’s hard to compete against fast fashion because you could buy a dress on Shein, you know, for $5, where a vintage item, partly because of the work that goes into finding, cleaning, selling, marketing it, is going to be more. What is the role of fast fashion in this dynamic?

Mull: Fast fashion is a big problem on a couple levels for resale. The biggest thing that it does, I think, is that it just depresses the amount of money that people perceive as appropriate to pay for particular types of clothing. If you are a fast fashion consumer, and then you want to get some cool like secondhand stuff, and the secondhand sellers have priced things at like $30, $50. The stuff that they’re selling may be higher quality. It may be perfectly reasonable to command those prices, even as secondhand items. But because you’re so used to being able to get whatever you want for impossibly cheap prices, it might feel like those people are trying to rip you off. And then if nobody is willing to pay, then fewer people are willing to list. So it’s a real inventory acquisition problem for platforms, and then it also just creates a problem of, like, the inventory you do acquire might not be very good. The more fast fashion flows into people’s closets, the more people are going to end up eventually listing that fast fashion on these platforms. And if a new user logs onto a platform and wants to find, you know, a beautiful vintage dress, or, you know, an old leather jacket or something like that, and when they search for a leather jacket, all they come up with are a bunch of faux-leather Shein pieces or something from Forever 21 that’s pleather, it looks to buyers like, actually, I’m not doing myself any favors by doing this the hard way. It’s all fast fashion. I could just buy fast fashion. So you’ve got a bunch of different problems that that industry creates.

Scott: We do know that younger shoppers are more interested in sustainability and more concerned about the impact of their buying. Is that not enough of an incentive for consumers if the prices are just, the math doesn’t work?

Mull: It’s really hard to overcome the math not working. Especially among younger consumers, people who really, really want to buy secondhand. A lot of those same shoppers are people who grew up in a consumer market where you could have anything you wanted at your door in one to two days with free shipping, and, you know, a minimal outlay of cash. And when you have been sort of socialized into that understanding of how shopping works, anything that doesn’t work like that, or anything that has more friction or costs more, is really difficult to convince yourself to buy into. So personal values in the consumer market have a real hard time winning the battle against math.

Scott: Well, do you or the people you talk to see a path to profitability for these platforms? They just have to figure it out?

Mull: Right now, the market is pretty crowded. I spoke to several people who thought that there was going to be sort of a shakeout in this group of companies, and, eventually, a winner that has better, more efficient processes, and that is able to acquire scale from some of these other companies. And then there’s always eBay. EBay probably sells more secondhand clothing than any of these platforms, honestly.

Scott: The original, right? I mean, people have been buying and selling used clothes on eBay forever.

Mull: Yeah, eBay has the benefit of selling a lot of stuff that isn’t clothing, a lot of stuff that has much higher price point and that can generate much higher fees for them, which can then offset and subsidize some of the really, like, low-dollar sales that you see in the sort of mass market resale arena.

Scott: Okay, so what about you? Do you shop on any of these platforms?

Mull: I shop constantly on these platforms. I am wearing a dress right now that I bought on Poshmark. I would say probably about half of the things that I wear regularly are secondhand in some respect because you do just find, like, more interesting things. The things that I get compliments on the most consistently are almost all secondhand finds.

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