Many Casual Resellers Do So to ‘Make Ends Meet,’ But Could Face New Tax Challenges
OfferUp's latest recommerce report and why Mercari, eBay and Tradesy are speaking out for taxpayers.
Mobile resale marketplace OfferUp's latest recommerce report reminds consumers of the resale opportunity.
With resale firmly entrenched in the mainstream, OfferUp said recommerce spending is projected to reach $188.5 billion by the end of 2023. Released Tuesday, OfferUp's analysis comes from data from GlobalData, a market research survey of 1,500 U.S. adult shoppers and OfferUp's own insights.
This exponential growth is fueled not only by the increasing acceptance of resale but also by the continuous influx of new buyers and sellers entering the market. Looking ahead to 2028, the recommerce market is projected to reach $276 billion — or a 58 percent growth rate — per OfferUp. By 2028, recommerce could account for as much as 8 percent of the total retail market, or a 2 percent increase compared to 2023. This shift shows people are increasingly directing their spending toward secondhand products.
Items most popular on secondhand channels, according to OfferUp, include basics or everyday items in good condition, name-brand items at affordable prices and unique or vintage items.
Value is still the top purchase driver for secondhand shopping, with 78 percent of shoppers wanting a good deal. Meanwhile, both buyers and sellers are concerned about higher prices due to inflation. In the survey, the majority, or 69 percent of shoppers, have used money earned from reselling items to pay for bills or everyday living expenses, with 39 percent of shoppers saying that reselling has helped them make ends meet. Some 34 percent of shoppers reported turning to secondhand shopping to maintain their quality of living. Nearly half said they would turn more purchases over to secondhand if the economy took a turn toward a recession.
In another recent resale study from Mercari, economic restraints and tax complications around online reselling was also topical. As it stands, U.S. taxpayers only have to report goods and services to the Internal Revenue Service if items sold online meet two requirements, being a $20,000 annual threshold and more than 200 transactions. A new provision in the American Rescue Plan Act, which was supposed to go into effect this January (the IRS delayed it to 2024), would slice this threshold to $600 and remove the baseline number of transactions. Mercari is a member of the Coalition for 1099-K Fairness along with AirBnB, eBay, Tradesy, Eventbrite and others arguing that millions of Americans and fledgling microbusinesses will receive unnecessary 1099-Ks for the 2023 tax year.
The coalition argues the legislation will create economic hardship for impacted communities and deter online selling.