Tariffs, Inflation Fatigue, and the Resale Advantage: Strategies for Maximizing Margins in 2025
June 2025
This article explores the current market dynamics of the resale industry, with emphasis on the upside potential that the current tariff environment and consumer financial fatigue are creating for sellers of secondhand apparel and footwear.
As of April 2025, the U.S. retail landscape is navigating a complex economic environment marked by renewed tariffs on imported goods and persistent inflationary pressures. These factors are reshaping consumer behavior and presenting unique opportunities for the resale apparel and footwear market. This article explores industry tailwinds and how resellers—ranging from luxury consignment boutiques to mainstream thrift platforms—can strategically position themselves to maximize sales and margins during this period.
The Tariff-Induced Shift in Consumer Behavior
Recent government policies have introduced new tariffs on imported apparel and footwear, leading to increased costs for retailers reliant on overseas manufacturing. According to ThredUp’s 2025 Resale Report, 59% of consumers indicated that if new tariffs make apparel more expensive, they will seek more affordable options like secondhand. This sentiment is particularly strong among younger generations, with 66% expressing a preference for secondhand alternatives under such circumstances.
Government Trade & Tariff Policies Expected to Build Secondhand Momentum
The U.S. is particularly vulnerable to these tariff-related pressures because it imports the vast majority of its apparel and footwear. According to data from the American Apparel & Footwear Association (AAFA), over 97% of apparel and 98% of footwear sold in the U.S. is imported. Only a small fraction is manufactured domestically. This overwhelming dependence on global supply chains leaves traditional retailers—and by extension, consumers—especially susceptible to increased prices as tariffs are passed along the value chain. Consumers who’ve grown accustomed to buying cheap imports directly from Chinese shopping giants Shein and Temu may feel an additional squeeze after the de minimis exemption on packages worth less than $800 was removed in early May 2025; the rule had previously allowed direct-from-factory ecommerce shipments to be sent to U.S. consumers duty-free from China and Hong Kong.
In stark contrast, the resale industry operates outside the bounds of these prevailing international cost pressures. Secondhand items, most sourced domestically, bypass the supply chain frictions and financial penalties imposed by tariffs. This geographic and regulatory insulation offers an immediate and powerful pricing advantage over new, imported goods.
Resellers can, and should, leverage this structural benefit in both their marketing and merchandising strategies right now. Messaging that emphasizes inventory as “tariff-free,” “already in the U.S.,” or “immune to import duties” may resonate strongly with inflation-weary and cost-conscious consumers. Not only are resale items priced lower due to their secondhand status, but they also avoid the cost escalations faced by primary-market goods.
Inflation Fatigue and the Appeal of Resale
It is also important to note that consumers are experiencing “inflation fatigue,” a term describing the weariness from prolonged periods of rising prices. Even as previously persistent inflation has eased, the introduction of new tariffs threatens to disrupt the price stability the U.S has been marching toward since the second half of 2023. Resale platforms offer a potential reprieve by providing the ability to purchase quality goods at more stable prices and resell those and other goods as well. ThredUp’s report notes that 47% of consumers say resale value is an important factor when it comes to purchasing new apparel and 49% indicate they have cut back on buying cheap, lower-quality apparel because they can’t resell it.
This trend indicates a growing consumer preference for value and sustainability, opening the door for aggressive positioning of resale as a viable alternative to traditional retail, especially during the current period of economic uncertainty.
Rethinking Luxury Resale Strategies
It should be pointed out that luxury resellers have traditionally adjusted their pricing in tandem with high-end designers like Chanel and Hermès, who are notorious for implementing annual price increases; their wealthy customer demographic is less price sensitive and has historically absorbed these increases in stride. The strategy used by resellers makes sense in a luxury market that can function in a commodity-like fashion. However, this approach may prove less effective in the current economic climate, with aspirational consumers finding themselves more financially constrained.
To appeal to this demographic, luxury resellers should consider more dynamic pricing models that reflect current market conditions and consumer sentiment. Offering flexible pricing and highlighting the value proposition of pre-owned luxury items can attract budget-conscious shoppers seeking quality and prestige without the premium price tag.
The Resale Market’s Sustained Growth
The ThredUp report notes that even before the impacts of the Trump Administration’s dramatic tariff actions started to be felt, the resale market was already experiencing significant growth and outpacing traditional retail. In 2024, for example, the U.S. secondhand apparel market grew by 14% – its strongest annual growth since 2021 – outpacing the broader retail clothing market by five times. The U.S. secondhand apparel market is expected to reach $74 billion by 2029, growing 9% annually on average. Even more impressively, U.S. online resale is forecast to nearly double by 2029, reaching $40 billion and growing 13% annually on average. This robust growth outlook suggests that the unique value proposition of resale items in the marketplace has the momentum and potential to endure well beyond the current period of economic uncertainty.
Strategic Considerations for Resellers and Asset-Based Lenders
To navigate the current economic landscape effectively, resellers and their financial partners should consider the following strategies:
- Emphasize Tariff Immunity: Highlight the fact that secondhand inventory is domestically sourced and not subject to import tariffs, offering price stability to consumers.
- Adjust Pricing Strategies: Reevaluate pricing models to ensure they align with current consumer expectations and economic realities.
- Enhance Online Presence: Invest in digital platforms and social commerce to reach a broader audience, as online resale is projected to reach $40 billion in the U.S. by 2029.
- Leverage AI and Personalization: Utilize artificial intelligence to improve search functionality and personalize the shopping experience, making it easier for consumers to find desired items.
- Promote Sustainability: Communicate the environmental benefits of purchasing secondhand, with an emphasis on quality and durability over cheap fast fashion, appealing to eco-conscious consumers.
- Strengthen Supply Chains: Develop robust sourcing strategies to ensure a steady supply of quality inventory, mitigating potential disruptions from global trade issues.
By proactively implementing strategies such as these, resellers can not only shield themselves from the volatility affecting traditional retail but also gain a durable competitive edge in a rapidly evolving marketplace. Emphasizing tariff immunity, embracing flexible pricing, and investing in digital tools allow resellers to meet shifting consumer expectations with speed and relevance. At the same time, sustainability messaging and secure sourcing reinforce trust and brand loyalty. For asset-based lenders and resale operators alike, these actions translate into stronger margins, increased customer retention, and scalable growth—positioning the resale business not just as a resilient alternative, but as a preferred destination for modern day, value-driven consumers.
