One person's last season castoff is another's wish-list item. Giving high-priced and valuable items a second act is what defines the luxury resale market. Luxury resale offers accessibility, allowing more buyers to obtain their dream items — and enabling sellers to offload their no-longer-wanted luxury purchases.
Expected to grow at an average of just under 10 percent, the luxury resale market is a straightforward marketplace where buyers and sellers meet to exchange specific items. What differentiates luxury resale marketplaces is that a participant can be both a buyer and a seller. Selling a collectible item paves the way to procure a new one. Conversely, buying a luxury bag or watch may prompt the sale of an existing collectible. And the cycle continues.
Gen-Z consumers are particularly active in the secondhand market, with 31 percent purchasing and 44 percent selling pre-owned items. — Boston Consulting Group (BCG)
Additionally, according to a Statista survey, 34 percent of luxury consumers sold luxury items through secondhand platforms.
Today's payments
Most resale marketplaces pay their sellers via traditional methods, offering multiple payout options:
Direct bank transfers (ACH or Wire)
Sellers receive payment directly into their bank accounts.- Pros: Secure and widely accepted.
- Cons: May take several business days for funds to clear.
Digital wallets (e.g., PayPal)
Payments are sent to a seller’s PayPal or other digital wallet account.- Pros: Faster than traditional bank transfers.
- Cons: May incur transaction fees or currency conversion charges.
Store credit or platform wallet
Some marketplaces, like The RealReal, offer payouts in store credit (sometimes with a bonus).- Pros: Encourages repurchasing within the platform and may come with a higher payout percentage.
- Cons: Limited usability outside the marketplace.
Checks
Some platforms issue physical checks as a payment method.- Pros: Useful for those who prefer traditional banking.
- Cons: Slower processing and risk of loss/delays.
Instant payment options (e.g., Venmo, Zelle, Debit push)
A few platforms may offer instant payouts for a fee.- Pros: Immediate access to funds.
- Cons: Higher fees for instant access.
Payment timing
Marketplaces can also dictate seller payment timing, reflecting both platform preferences and marketplace behaviors. These can also be differentiating when sellers are shopping for the best site to sell.- Consignment sales: Some marketplaces, like The RealReal, operate on consignment, meaning sellers only get paid once the item sells.
- Direct buyout models: Marketplaces like Fashionphile offer upfront payments after authenticating the item.
- Peer-to-peer marketplaces: Platforms like Poshmark or Vestiaire Collective hold funds in escrow until the buyer confirms receipt.
Wallets +
Marketplace wallets are a smart way to distribute funds, as they are cost-effective for the marketplace and offer a seamless method to get paid for sellers. Funds kept in the marketplace wallet translate into future sales and earn interest while remaining in the wallet. The benefits to the marketplace are substantial, so how to get sellers to direct payments into a wallet?
Three ways to encourage sellers to keep funds in their wallets
Access
For luxury marketplaces that can mean providing exclusive access to sought-after items, early admission to special sales, or advance notice of availability of specialty items.
Recognition
Marketplaces can escalate sellers to higher loyalty tiers based on wallet balances, rewarding those who keep funds in their marketplace wallet. These tiers can be earned through a combination of purchases and wallet balances..
Discounts
Rather than paying more to sellers upfront, luxury resale marketplaces can apply percentage discounts on the seller's next marketplace purchase. These can be selectively applied to higher margin items, or used to accelerate slow-moving inventory.
Open-loop spending
Give sellers open-loop cards for everyday spending, funded by their marketplace wallets. These open-loop debit cards allow marketplaces to retain funds until they are spent and to earn interchange fees with each purchase.
Turn sellers into buyers with Marketplace Wallets
Luxury resale marketplaces are perhaps the most valued by both buyers and sellers, with high-value items exchanged on the platforms. These items are offered by those who have curated collections, but are subject to their changing interests.
Marketplace wallets provide platforms with a fee-free payment that allows sellers to accumulate funds for their next purchase or to allow everyday spending via attached cards. Marketplaces benefit from the yield on aggregated seller funds held in wallets, interchange fees from card use, and potential future sales on the platform using sellers' wallets — all without incurring network fees.
