CNBC's Diana Olick reports on the state of the housing market heading into the end of 2021. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi Secondhand retail companies are finding success with shoppers focused on sustainability and hard-to-find items, while also avoiding the supply chain pressures being felt by traditional retailers. Big box retailers like Walmart and Target have focused on keeping prices down, and have absorbed the increasing costs in shipping, labor, and materials for shoppers. Other retailers, like Macy’s and Kohl’s, have raised prices to keep up with the uptick in costs. But resale companies The RealReal and ThredUp are playing up their secondhand supply chains, inventory levels, and pricing. “While many retailers have been forced to raise prices due to inflation or supply chain pressure, we do not have the same level of exposure,” James Reinhart, CEO of ThredUp, said on the company’s recent third quarter earnings call. ThredUp’s business is entirely sourced domestically from its users, according to Reinhart, and has no reliance on direct manufacturing for inventory. “We have chosen to strategically lower prices in order to engage as many customers as possible during a time when consumers are feeling price pressure in many other parts of their life,” he added. ThredUp’s prices averaged 15% lower in the third quarter compared to the same period last year. Reinhart said the company will continue to keep prices down through ThredUp’s domestic supply system. The company reported record quarterly revenue of $63.3 million in its third quarter, up 35% year-over-year. It also had record numbers of active buyers at 1.4 million and a record number of orders at 1.3 million, growing 14% and 28%, respectively, year-over-year. Julie Wainwright, founder and CEO of the RealReal, said after its third quarter earnings that the company’s inventory has exceeded pre-Covid levels, adding “we believe we are well-positioned from a supply perspective as we enter the holiday season.” She also noted that the RealReal is shielded from the inflationary impacts other businesses are seeing. The RealReal reported total revenue of $119 million in its third quarter, an increase of 53% compared to last year. There were 757,000 orders in the third quarter, up 38% year-over-year. “Adjacent to the issue of reselling and all of the empty storefronts, I feel very strongly that retail is just changing,” said Tim Ceci, founder and president of Tim Ceci Retail Consulting. Still, investors aren’t entirely sold on the outlook for these companies, even amid the supply chain issues around the globe for retailers. ThredUp’s stock has been volatile since its initial IPO pop this year, and after its recent earnings resulted in a one-day bounce, shares continued on a declining trajectory. RealReal received a boost from its recent earnings, but remains down near-25% this year. But the broader consumer trends supporting the secondhand market do continue to serve as a secular tailwind for the niche. New habits pushing shoppers towards resellers In total, by 2023, the resale market is expected to reach $51 billion, according to a recent report from ThredUp. The resale industry is growing 11 times faster than traditional retail, according to Carolyn Thomas, president and CEO of Aravenda, a consignment software company. This trend is likely linked to two factors: supply chain logistics and the consumer’s shift to a sustainable mindset. It’s also being aided by younger consumers like Edwin Elliott, a 25-year-old Miami resident, who is scoping out old-school pieces online to complete trendy outfits. They can be difficult to recreate “without real vintage pieces,” Elliott said. “And there are so many resale shops online, so it has made it easier to buy vintage items.” » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC https://www.cnbc.com/select/best-credit-cards/ #CNBC #CNBCTV