More brands are partnering with resellers to drive sales but risk diluting their brand image in the long term.

WHAT HAPPENED: Brands are looking to partner with resellers like The RealReal and Vestiaire Collective as they search for ways to move inventory. The RealReal saw 10 times more applications for its B2B program in the past two weeks and a 30% increase year-over-year.

WHY IT MATTERS

Luxury brands partnering with resellers like The RealReal only provides a temporary revenue solution. Considering the predominance of legacy brands on resale platforms, increased dependence on The RealReal risks watering down their brand image in a channel that is unviable for long-term growth. At the same time, new merchandise from coveted brands will help resale platforms gain more market share—The RealReal, for example, takes up to 80% commission on each item—while strengthening their offering and overall brand positioning. Although customers are wary of buying used clothing right now, if The RealReal can implement effective cleaning methods and offer more unworn clothing options from desirable brands, it will be harder for individual brands to compete.