The Economics of Depop and DIY Sustainability

Published on 8 February 2021 at 13:10

Depop is a peer-to-peer platform which is unique in that 90% of its user-base is under the age of 26. One economic benefit of software like Depop is that it is a form of accessible self-employment. Add to this the new value system for younger people who view the meaning and purpose of ownership differently to previous generations.


Clout and social currency flourish on platforms like Depop. Clout allows for cross-platform advertising by sellers to gain recognition as a trusted and trendy fashionable seller. Other reselling platforms like Etsy, Vinted and Tredup also provide similar services. 


Cross platforming is crucial to these ‘youngtrepreneurs’ as they use social media platforms such as Instagram for advertising. Operating costs are low and do not require as much capital as many self-employment ventures do. This accessibility to self-employment gives younger people greater economic opportunities than other market options including brick-and-mortar employment.


Consider a 20-year-old who wants to make some money to afford living during the pandemic or through college. A ‘weekend job’ worker can earn up to €489.60 based off working an eight hour hour day on Saturday and four hours on Sunday, or a maximum of €652.8o a month (based on two 8-hour weekends). Depop offers younger people the potential to make more money by aiming to be top sellers of their items. In some of the best-selling cases, the same 20-year-old could make €2,000 a month. (Based off Depop maximum average seller revenue, before taxes and Depop’s charge of 10%). Top sellers can earn anywhere from €40,000 to €300,000 a year. 


It still takes ruffling and lots of time to organise Depop stores, perhaps even more than stacking shelves or cashiering. The user must source, organise, photograph, wear and promote their items. If Depop or Esty did not exist, the economic value in reselling clothes would not exist in the same manner as it does currently.


There has been some criticism from users over the growing prices of items, thus making them less accessible to their mostly lower-income buyer base. Also, a phenomenon known as ‘repop’ has started where users will, for example, buy an item for €15, wear it a few times and resell it at the same price or mark it up slightly based on the retained brand value at €17.


The circular economic model of Depop makes it one of the best examples of a micro-economy that keeps sustainability in mind. Criticisms come mainly from designer brands worried about brand devaluation, counterfeit selling, and losing control in a decentralised marketplace.


Internal complaints among the user base also abound, ranging from prices, ‘unethical profiteering' and social commentary. Besides those, Depop provides another avenue for self-employment for younger people. They have more control and can provide a future for charity shops to reduce their textile waste thanks to Depop’s circular economy. 


Depop joins the ranks of Uber, Lyft, Spotify and many other digital platforms where the exchange of goods and services is decentralised and ownership is not a key value driver. The resale of second-hand clothes is one of the fastest-growing areas in e-commerce.

As many retailers are opting for off-price models, and incorporating sustainability into their operations, the rise of resale fashion has caught the attention of many business analysts. Reselling has grown 21 times faster than high street retail in the past three years, and the market size is expected to be worth nearly $51 Billion in the next two years. The fuel for this growth comes from Millennials and Generation Z. Attitudes towards buying and owning second-hand clothing have changed, and a poll in 2019 found that one third of 15–23-year-olds buy second-hand clothing.


Climate activism and social activism plays a part in the emerging trends, as the ethical consumer mindset comes to fruition. A term coined to reflect this is ‘Slow Fashion’, the counterpart to ‘Fast Fashion’. Furthermore, research into consumer habits has shown that sustainability now plays a role in decision making for consumers. In some cases, eight out of ten consumers will consider sustainability vital in their purchasing decisions. Others said they would be willing to pay up to 35% more if it meets their social and environmental concerns.


In short, a circular economic model of cross platforming users, who have more control over what they want and easy access to entrepreneurship, allows Depop and others to join the ranks of platforms taking advantage of the growing decentralisation of goods and services and giving at least some degree of control to users and consumers.

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Kristyn McC
3 years ago

Amazing article - as a depop seller and economics student myself I found this article very interesting