thredUP turns old clothes into cool cash

If your closets are stuffed but your wallet’s too thin, a startup calledthredUPis taking the hassle out of consignment with free pickup service.

“I started this business because I had a closet full of shirts I didn’t wear and it was inconvenient to try and sell them on eBay, so they just sat in my closet,” founder and CEO James Reinhart told CNBC’s On the Money in an interview. “There needed to be an easier way.”

The company launched in 2009 and is headquartered in San Francisco. So far, it has raised $131 million dollars from companies like Goldman Sachs, Redpoint Ventures, Trinity Ventures, Highland Capital and Upfront Ventures.

With thredUP, people can go on the website or mobile app and request a free “clean out” bag. After filling it up with unwanted items, customers can leave the bag on their doorstep. Reinhart says the company has a partnership with the postal service and FedEx.

Originally Reinhart started the secondhand store alternative exclusively for men’s shirts. What he quickly realized, however, is that the much larger and lucrative market is women and children’s clothing. The company shifted to that segment and hasn’t looked back since.

“The irony is not lost on me that we still don’t do men’s [clothing] but it’s a pretty small market in resale, Reinhart said. “Women’s and kids’ [clothes] is the sweet spot.”

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