Depop and Etsy Advocate for Smarter Secondhand Market Regulations in New Whitepaper

Why It Matters

The findings highlight a sizable, consumer‑driven resale market that can boost household finances while advancing sustainability, but regulatory friction threatens its growth. Addressing these policy gaps could unlock significant economic activity and reinforce the U.S. circular economy agenda.

Key Takeaways

• 92% of U.S. consumers say circular buying saved money
• 77% own unwanted clothing worth about $400 each
• Current resale tax rules may double‑tax secondhand sales
• 1099‑K thresholds create reporting hurdles for casual sellers
• Policymakers consider tax holidays and EPR to boost recommerce

Pulse Analysis

The circular economy is rapidly moving from niche hobby to a mainstream financial strategy for American households. Recent data from Depop and Etsy shows that 92% of consumers who shop secondhand report cost savings, while 80% generate supplemental income, underscoring how resale platforms are becoming essential tools for budgeting and wealth building. With an average of $400 in resale‑ready apparel per household, the sector represents billions of dollars of latent value that can be mobilized through digital marketplaces, repair services, and up‑cycling initiatives.

Despite this momentum, policy frameworks have lagged, creating friction for both casual sellers and emerging micro‑businesses. In several states, pre‑owned items are subject to a second sales tax, eroding the price advantage that drives consumer adoption. Moreover, the current 1099‑K reporting threshold imposes administrative burdens on sellers who treat resale as a side hustle rather than a formal enterprise, discouraging participation. Infrastructure gaps, such as limited local repair hubs and rising logistics costs, further constrain scaling opportunities for small‑scale recommerce operators.

Policymakers are beginning to respond, with legislators like Rep. Sydney Kamlager‑Dove and Congresswoman Nicole Malliotakis signaling openness to reforms. Proposals include sales‑tax holidays for secondhand goods, refundable tax models, and tailored extended producer responsibility (EPR) schemes that recognize the unique role of resale platforms. By aligning tax policy and grant funding with the realities of modern consumer behavior, the United States can accelerate the circular economy, fostering financial resilience for households and driving sustainable growth across the apparel and broader goods markets.