How Resale Platforms Are Competing to Win in the Circular Economy
A review of four strategies
Recommerce is booming—driven by a cocktail of economic pressures (rising prices, inflation, and tariff wars), technological innovation, sustainability and national material security concerns, and shifting consumer preferences. However, circular marketplaces still face strong competition as more players enter resale markets.
To address this competition, circular platforms are adopting strategies to win against rivals. Recent announcements illustrate four strategies that platforms are using to compete in the circular economy. These strategies include fee reductions for brands, AI-driven technology solutions to remove friction for buyers and sellers, partnership deals between platforms and launching corporate venture arms to attract innovation from circular startups.
Price Competition (e.g., ThredUp)
In early May 2025, ThredUp announced a new price competition strategy which eliminated upfront and monthly fees for its branded resale shops, making its resale-as-a-service (RaaS) platform free for brands to use.1 This move lowers barriers for brands and sellers, encouraging greater participation and platform adoption, and directly intensifies price competition in the resale market.
ThredUp’s RaaS business model enables brands to launch fully customizable, online resale storefronts that integrate with their own catalogs and branding, while leveraging its AI-driven merchandising, logistics, and cleaning and repair services.2 Brands earn a revenue share from items sold through ThredUp’s inventory and keep 100% of revenue from their own secondhand items, with additional benefits like marketing support and integration with ThredUp’s Clean Out program.3
ThredUp is a leading resale marketplace for apparel. To date, the platform has processed over 200 million unique secondhand items from 60,000 brands, serving 1.4 million active buyers. For the Q1 2025, ThredUp’s revenue increased by 10.5% year-over-year to $71.29 million, up from $64.53 million in Q1 2024.4
AI-Driven Technology Solutions (e.g., eBay)
eBay is one of the world’s largest resale platforms. Used items making up approximately 40% of that gross merchandize value (GMV) sold on its marketplace amounting to billions of dollars in transactions and supports millions of active sellers and buyers.5 This immense scale presents both an opportunity and a challenge: while eBay has vast inventory, the sheer volume of listings can overwhelm both buyers searching for specific items and sellers trying to stand out. eBay’s investment in artificial intelligence seeks to transform this scale into a competitive advantage by making the platform more navigable, efficient, and personalized for all users. These technology solutions have been developed to benefit both buyers and sellers on the platform.6
For sellers, eBay has rolled out AI-powered tools that dramatically reduce the friction traditionally associated with listing items. The “Magical Listing” tool, for example, allows sellers to start a listing with just a photo and a title; AI then extrapolates product details, writes descriptions, suggests categories, and can even propose pricing and shipping information.7 This not only accelerates the listing process-cutting steps in half and significantly reducing the time required to go live, but also ensures that listings are more detailed and accurate, which is crucial for attracting buyers in a crowded marketplace. Over 10 million sellers have already used these AI features in more than 100 million listings, demonstrating the scale and impact of eBay’s technology.8 The platform’s AI also supports bulk listing and photo enhancement, making it easier for high-volume sellers to manage large inventories efficiently.
For buyers, eBay’s AI-driven innovations turn the platform’s vast catalog from a potential source of confusion into a curated, personalized shopping experience. The new AI-powered shopping agent guides users through eBay’s extensive inventory with conversational, real-time recommendations tailored to individual preferences, helping shoppers discover relevant products quickly and easily. Features like “Shop the Look” and “Explore” further leverage AI to suggest items based on style, size, and other personal attributes, making discovery intuitive and engaging even as the platform continues to grow.9
By embedding AI at every stage of the buying and selling journey, eBay not only streamlines experiences but also continuously improves its platform through the massive flow of data generated by its scale. This feedback loop enables eBay to refine its AI models, further enhancing personalization, efficiency, and customer satisfaction. Ultimately, AI allows eBay to turn the challenge of scale into a powerful differentiator, making the platform more accessible, efficient, and valuable for the global resale community.
Partnerships Between Platforms (e.g., Back Market and iFixit)
Back Market and iFixit announced a partnership in April 2025 at an event in New York City. Back Market is a leading online marketplace based in France, specializing in the sale of verified refurbished electronics such as smartphones, laptops, and gaming consoles, and now serves customers in 17 countries. iFixit is a leading electronic device repair platform that connects a global community of users, experts, and manufacturers. Its crowdsourced, open-access model enables users to both find solutions for their own repair needs and help others by sharing their expertise, creating a dynamic, user-driven ecosystem.
Through this collaboration, iFixit’s repair guides and toolkits are now accessible directly from Back Market’s platform, enabling customers to find repair instructions and purchase tools alongside their refurbished devices.10
The partnership also features cross-promotion, with Back Market’s products being highlighted on iFixit’s channels and vice versa, thereby expanding the reach and impact of both brands. Additionally, the platforms have pledged to jointly work on policy reform. They plan to jointly advocate for the right to repair and circularity, combining forces to exert greater influence on legislators and manufacturers to improve device repairability and extend product support lifespans.
The Back Market and iFixit partnership is an example of how circular platforms can combine forces and leverage each other’s strengths to deliver a more compelling and sustainable value proposition.
Corporate Startup Ventures (e.g., Vinted Group)
Establishing a corporate venture arm is a well-tested strategy adopted by companies to gain a competitive advantage. By investing in startups, corporations can access new technologies, business models, and market insights that may be difficult to develop internally. This approach can help companies stay ahead of industry trends, foster innovation, and even create new revenue streams.11
A recent example in the circular economy is the announcement by the Vinted Group in April 2025 that it was establishing Vinted Ventures. Vinted has grown to become Europe’s leading peer-to-peer marketplace for buying, selling, and exchanging second-hand items, primarily in fashion and lifestyle categories. Since its founding in 2008 in Lithuania, Vinted has grown to operate in 22 countries, with over 100 million registered users. The company’s scale is impressive: in 2024, it reported €813.4 million in revenue 36% year-on-year increase, and a net profit of €76.7 million, up 330% from the previous year.12 Vinted’s valuation rose from €3.5 billion in 2021 to €5 billion by late 2024.13
By establishing Vinted Ventures, Vinted increases the chances of gaining early access to innovative ideas and emerging technologies within the recommerce value chain. This can establish an advantage as it allows Vinted to identify and potentially adopt cutting-edge solutions in areas such as logistics, payments, and other areas that are critical to the user experience and operational efficiency of a large-scale marketplace. Furthermore, by investing in Series A to C stage startups with investments ranging from €500,000 to €10 million, Vinted can influence the direction of industry innovation and form strategic partnerships with promising companies.14 These relationships can lead to future integrations or acquisitions that strengthen Vinted’s competitive position. More generally, by backing companies that encourage consumers to choose second-hand goods, Vinted is effectively expanding the overall market for re-commerce, thus increasing its own potential user base.
Conclusion
The circular economy is a competitive economy. As the examples above illustrate, circular platforms are not simply participating in a growing market; they must actively jockey for position, each striving to carve out a sustainable competitive advantage.
Fee reductions, like ThredUp’s decision to eliminate costs for brands, are intensifying price competition and lowering barriers to entry. AI-driven technology, as seen with eBay, is transforming operational scale into a strategic asset, making platforms more efficient for both buyers and sellers. Strategic partnerships, such as the collaboration between Back Market and iFixit, are allowing platforms to combine strengths and expand their influence, both in the marketplace and in shaping policy. Meanwhile, corporate venture arms like Vinted Ventures are enabling established players to tap into next-generation innovation and secure early access to disruptive ideas.
In the circular economy, the companies that move to the frontier will be the platforms that continually innovate, adapt, and differentiate themselves from their competitors.
Footnotes
Love what the platforms are doing, so long as they don't raise VC: https://ecommercelogistics.substack.com/p/resale-platform-software-the-next