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Fast Talk

Bye Bye, Baby Gap: Trading Children's Clothes With James Reinhart of ThredUP

Photograph by Gabriela Hasbun
Photograph by Gabriela Hasbun

JAMES REINHART
Cofounder and CEO, ThredUP
San Francisco

Reinhart, 31, is building a nationwide kids' clothing swap to save parents time and money.

"Parents spend nearly $1,000 a year to clothe just one child. A lot of people swap clothing offline, but there's a bigger marketplace to tap online. ThredUP helps them connect. Pick a box of clothing posted on the site by a ThredUP parent and for just $5 plus shipping — each box contains about 15 items — it's sent directly to your home. We just ask that you post and send a box for every one you receive. About 1,000 boxes are shipped each week; 92% are rated three or four stars out of four. Each box is unique, so if you want the one with Gymboree and Crewcuts, you better move fast. We launched in April, and we're already at 30,000 members, adding 1,000 a week. We want to reach tens of millions of moms. There was talk on our Facebook page about creating a ThredUPs Anonymous because our users are addicted; checking the site is the first thing they do in the morning. You can layer community on top of a straight commerce model, but with sharing, you get better interactions between folks."

 

-Online Extended Q&A-

Fast Company: ThredUP originally launched as a clothing swap for adults. How did you end up trading children’s clothing?

James Reinhart: There’s this massive inefficiency in the secondhand clothing market. The company was started by three guys, and we went to work with what we knew best—shirts. We got a lot of great press from the New York Times, even the Today Show, but we didn’t see the transaction volume, so we started looking at different markets and stumbled upon kids. Parents spend nearly $1,000 a year to clothe just one child. When we explain ThredUP to a parent, they immediately get it.

FC: Why do you think it didn’t connect with adults?

JR: Adults like new stuff. We don’t have to buy new clothes, but we choose to. Kids, on the other hand, need new clothes every three months, every year. That’s the difference.

FC: Can you talk me through the process of using the site?

JR: Parents post "boxes" of used clothing. Each contains about 15 items, and they’re explained by size, gender, style, brand. When you log onto the site, you can browse the boxes, pick one you like, and it’s sent directly to your home for just $5 plus shipping. We just ask that you post and send a box for every one you receive, and we even provide ten prepaid USPS boxes to make shipping easier.

FC: Do parents have to post pictures of the items they’re getting rid of?

JR: There are actually no pictures on the site, essentially because we think people take bad photos. There’s also an art to writing the descriptions. Aside from the facts about the pieces, parents add notes, like "This is a dress my daughter wore in the third grade," or "these are clothes my son wore to soccer practice."

FC: Are parents ever unhappy with what they receive?

JR: There’s always going to be some of that, but 92% of the boxes sent on ThredUP are rated three or four stars out of four, so quality has been great. And we’re sending about a thousand boxes a week.

FC: How many members do you have?

JR: We launched in April, and we’re already at 30,000 members, adding 1,000 a week. We’re starting to get that penetration from word of mouth where parents are telling other parents to check this thing out. We’re seeing very traditional middle class families taking advantage of this. It saves money and it’s sustainable—90 billion pounds of clothing end up in landfills each year.

FC: ThredUP is free to join with the option to buy a Pro Membership. What made you choose this model?

JR: We went freemium because people like transaction-based models, especially in this economy. People are hesitant to sign themselves up for subscription deals, especially if they’re not sure they’ll use the service frequently.

FC: Why do you think this sharing, swapping, and renting trend is growing so quickly?

JR: It’s a cultural shift. People are pulling out of that hyper-consumerism of the early 2000s. It’s just really expensive to own stuff. We lease and rent so many big-ticket items, and now this idea of doing it with smaller things is really resonating with people. I think the current state of the economy has provided an interesting lens in which to see this movement, but I do think it’s independent of the economy. It’s just making people more aware. I mean, the average drill, for example, gets used for something like eight minutes in its lifetime, and yet 50% of American homes own a drill. It doesn’t make sense.

FC: As an entrepreneur, why is trading more appealing than selling a product?

JR: It’s all about the community for us. As CEO, I think the thing that gives me the greatest joy is waking up every morning and checking out the conversation on our Facebook page. You can layer community on top of a straight commerce model, but with sharing, you get better interactions between folks. There was talk about creating a ThredUPs Anonymous because people are addicted to the site. It’s the first thing they do in the morning. Each box on ThredUP is so unique. When Gilt Groupe has a sale, they have maybe a thousand pairs of jeans to sell. But with us, if you want that one box of Gymboree and Crewcuts, you better move fast, because it’s the only one.

FC: Do you have any kids?

JR: I have a new daughter, and she is a ThredUP kid for sure. Head to toe. My wife received an amazing box yesterday and called me to say that whoever started this company came up with a really good idea. I’m just like, yeah, they did.

This interview has been condensed and edited.

A version of this article appeared in the December 2010/January 2010 issue of Fast Company magazine.