Why secondhand-clothes giant ThredUp, dubbed the 'Amazon of resale,' has a key advantage over rivals Poshmark and Depop, according to a leading expert

• Demand for secondhand clothing is booming - but less people are selling their used items.
• One expert says ThredUp, dubbed the "Amazon" of resale, has an advantage on rivals Depop and Poshmark.
• ThredUp's easy selling process and partnerships with retailers could help get more sellers on its site, analyst Neil Saunders said.

The secondhand clothes market is booming, but as demand soars, fewer people are listing their old items for sale.

According to one expert, ThredUp - recently dubbed the "Amazon of resale" - may well stay ahead of its rivals for two reasons. First, its partnerships with leading retailers in the US, and second, the simplicity of its selling process - both of these should encourage more people to sell through its site, GlobalData's Neil Saunders said in a note to clients.

The note was on ThredUp's quarterly earnings results on Wednesday, the first since going public in March.

Read more: As ThredUp's stock pops in public debut, its CEO shares the resale platform's key advantages over Poshmark and other marketplaces

ThredUp's 'resale-as-a-service' program partners it with some of the biggest names in retail, including Gap, Macy's, J.Crew's Madewell, and most recently, Vera Bradley. Each retailer partners with ThredUp in different ways. For example, they might offer customers ThredUp bags to mail in used clothes in exchange for credit to spend at these stores.

This sets ThredUp apart from rivals such as Depop and Poshmark, which don't have similar partnerships with brands, Saunders said.

The model helps ThredUp to create "a solid resale ecosystem with a plentiful supply of secondhand product - something that could become more of a challenge for resale players as the space becomes more crowded," Saunders said.

In its recent IPO filing, ThredUp flagged supply as being a potential risk for the company in the future.

"Our success depends on our ability to cost-effectively attract high-quality secondhand items by attracting new sellers and retaining existing sellers, such that they choose ThredUP to list their items," it wrote in its S-1 filing.

According to Saunders, ThredUp's straightforward process for customers sending in and selling secondhand clothing is another way it can get more customers.

To sell an item, customers can request a "clear out kit" from its website, which includes a bag and a prepaid shipping label. ThredUp then assesses the items, and lists any suitable clothes online on the sellers' behalf. If an item is bought by a customer and they keep it - there is a 14 days return window - sellers are paid, or can get credit to spend at ThredUp.

This is a similar consignment model to luxury resale site The RealReal, but different from ThredUp's leading rivals Poshmark and Depop, which provide a marketplace for sellers but don't keep any inventory themselves. It is the seller's responsibility to photograph, list, and fulfill all orders. Depop charges a 10% commission on each order sold, while Poshmark takes a $2.95 commission for any orders under $15, and a 20% commission over $15.

"We believe that ThredUP's ability to obtain product is aided by its relatively simple process which allows shoppers to sell used apparel in bulk to the company rather than being responsible for listing, selling and fulfilling items via a peer-to-peer type model," Saunders said. "As consumers get busier and spend less time at home, this simplicity advantage could well grow."

There are downsides to this business model too. Acquiring inventory and selling it on a customer's behalf requires an expensive distribution infrastructure, and more capital as it continues to scale up.