Profitability vs. Impact in the Online Resale Market

One of the reasons I started Second Serve Resale is because the explosion of the online resale business caught my attention. People were investing in online resale marketplaces, betting on big payoffs. 

I thought nonprofits should get in on this. Why should a commodity that is bursting from all of our closets benefit the capitalist crowd alone? There are a few nonprofits that have taken their wares online, like Goodwill, to support their own programs. But I thought there should be a way to convert resale clothing to cash to benefit any nonprofit.

Second Serve Resale is a nonprofit organization whose sole purpose is to lower the consumption of new clothing. We celebrate all the reasons to shop resale, which include the benefits to the environment, an affordable way to shop for fashionable items, and— this what makes Second Serve different—85% of the purchase price goes to a nonprofit of the buyer’s choice. No one else does this last bit!

I wrote about why I started Second Serve Resale in my Resale Manifesto, so called as I wanted it to be the spark that starts the nonprofit resale revolution. The revolution is not in full swing, but laying groundwork takes time. 

And making a profit in the for-profit online resale world takes time too. I wonder how long it will take, if it happens at all.

One of the websites I have been following since Second Serve Resale was just a flicker in my eye is The RealReal. It is an online luxury website with clothing for adults and kids, as well as home goods and beauty products. It was founded in 2011 and went public in 2019.

It has yet to make a profit. 

The founder left the company last year, and two new people are in there trying to figure it out. A couple of in-person stores closed, and a bunch of people were laid off at the beginning of 2023. I’ve noticed that handbags can no longer be returned, and that certain brands are not offered anymore, probably in an effort to cultivate higher priced items to get more bang for the company buck. 

Over the years, I have noticed changes to The RealReal listings. In the early days, each product had multiple photos with the listing, and everything was measured and included in the description. Now, there are more and more listings without any measurements at all. The statement that so-and-so brand is “true to size” (whatever that means) is often the only indicator of fit. Every now and again I see the wrong picture with a listing, a dress when it's supposed to be shorts, for example. I have also noticed that many of the handbags are displayed as pictures, superimposed on a picture of a human model, rather than having a real person model the real handbag. The site has fallen off from what it was, maybe the result of fewer staff to run a sprawling site, or maybe a lack of process to address incoming inventory. The site has deteriorated. 

There is serious negative feedback about The RealReal and the authentication of their handbags flying around. Authentication is a challenge for all resale sellers, and deserving of its own article, but suffice to say, many of the “experts” getting paid to pass out certificates of authenticity do not know what they are doing. I was watching a cautionary YouTube channel on buying luxury handbags at The RealReal, and I saw a former RealReal employee in the comment section concur with the host, saying, basically, that people were just looking at bags and guessing whether they were legit. The RealReal has, however, invested in AI to take over a lot of the authentication, and maybe this will bring back faith in their product, as well as save them some costs. 

I have always liked the RealReal website, and I still shop there even though the changes bum me out. I have not had a bad experience with authentication. My purchasing experience has been positive as well, although I am careful about what I buy, and I always look the items up on other sites to verify measurements and price. And without a doubt, The RealReal deserves props for pushing resale into the mainstream. 

And I feel for them, sort of. They have two different groups of customers—sellers and buyers—and they are trying to maximize what the first group can give them and what the second group will pay for. In addition, processing costs are real. Each individual item is a unique inventory entry and needs to be photographed and described on the site. It’s time and people intensive. And they have to store all the stuff and send it all out and handle the returns and drum up consignors with good inventory and run a business.

But everyone, for now, is getting paid to make it work. I wonder how much more of a leash they have to produce a profit.


The struggles of The RealReal bring me back to the possibilities of a nonprofit online resale marketplace. What if we saw the market in terms of how each individual sale of clothing could benefit the most people, and have the most impact? 

Consider Second Serve Resale. As an online resale market store, we have similar challenges as The RealReal. As tiny as we are, we have the same processing costs (per item), as does any online resale store that is not peer to peer (like eBay or Poshmark). Second Serve also has to secure great items people want, and we spend a lot of time cultivating donors as well as buyers (and have faith they will be the same person, eventually). We have authentication challenges as well, but we usually know the background of our inventory because we know our donors. That, coupled with the lack of money to be gained (by the donor and by Second Serve), gives our model a solid foundation for authentic products. It’s not a perfect system, but we strive each day to make it better as we know our model only works with a quality product. 

Our similarities end with our values, and the definition of success. Our resale model is based on impact and believing that people will change traditional consumerism habits when they see what can be achieved by an impact efficient resale market. 

With our model, customers are satisfied not just because of what they get when they make a purchase; the transaction actually gives them power to impact their world. Yes, they get a cool item and have a fun shopping experience, and this is important. And they purchase guilt-free knowing they are getting a product already in existence, and they don’t have to worry about the resources used or the waste produced to make that product (among other things like the treatment of clothing makers and the conditions of their work). But they also are psyched that 85% of the purchase price goes to a nonprofit that they select. They have the power to fund the causes that they care about. More than anything else, Second Serve gives agency to the customer to experience the power of what can be done with their purchase. 

The model also maximizes the donor experience. The donor is not dumping off a bag of stuff and wondering whether it will end up in a landfill in Ghana. They can see their donations on our website, often with their stories and history included in the item descriptions. We make an effort to connect the donor and buyer, to show the stories, and demonstrate there is meaning in clothing. It is a good feeling to know that your clothing will be used and enjoyed again. And making an impact feels good! The donor may not receive money like a consignor, but the feeling that comes from knowing the sale of their donated clothing will support a nonprofit organization is worth something. 

Finally, and this is the piece de resistance, the Second Serve Resale model supports nonprofits by giving them cash. Converting clothes to cash gives nonprofits a funding source that they otherwise do not have, a source that seemingly, with the amount of excess in our world, will never run dry. Eighty-five percent (go ahead and insert “whopping”) of each purchase goes to a nonprofit, and we have a growing list. There are food banks and environmental nonprofits, animal rescues, domestic violence organizations, and sustainable fashion organizations. Most of our nonprofit beneficiaries are located in Rhode Island but we have beneficiaries in California, Washington State, Georgia, Connecticut, as well as one global organization. 

There are three of us volunteering at Second Serve Resale, one of us volunteers full-time and the two others are part-time. We gave $10,000 to nonprofits last year; our first year in operation. That may sound like a small amount. Give us ten years.


We need to look to the nonprofit world for a better online resale model, one that can have the most impact on people, our communities, and our environment.  

The for-profit sites like The RealReal are growing yet cannot find a way to be profitable. Second Serve Resale is also growing. We are not profitable, by design, but we are successful. 

Success does not have to be profitable; it can be measured another way. Let’s start talking about impact. 

What if we replaced “profitability” with “impact”? Would our heads explode? 

It might be time. 

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