How thredUP Built Its User Base: Overcoming the Chicken and Egg Dilemma in Two-Sided Markets

Building a two-sided market poses a unique challenge, often referred to as the chicken and egg dilemma: how do you attract one side without the other to create a vibrant market? thredUP tackled this issue head-on and has since become one of the leading player in the second-hand clothing market. In this article, we will explore how thredUP successfully built its user base, from incentivizing initial listings to fostering a strong community, and the role of affiliate marketing in driving user acquisition.

The Initial Incentives: Tackling the Chicken and Egg Problem

thredUP initially addressed the chicken and egg dilemma by incentivizing users to list clothing boxes. Unlike many niche market players, thredUP understood the importance of creating an initial supply to attract pickers and vice versa. By offering this initial motivation, the platform was able to kickstart its user base. Here are the strategies that were employed:

List Boxes: The platform incentivized users to list boxes, which could be seen as the first step to creating supply. This was a key strategy to get users to start listing items right from the beginning, setting the stage for the next phase. Swapping Balance System: To ensure users had a clear incentive to continually engage, thredUP introduced a swap balance system. Users had to send boxes before they could pick boxes. To maintain a positive swap balance, users were required to send boxes whenever their balance fell below zero. This system proved effective, as it encouraged long-term engagement. User Engagement: The community aspect of thredUP played a vital role. Users would often see such vibrant activity on social media platforms like Facebook, which increased visibility and inspired others to join. The social connections, particularly among mothers who swap, created a network of users who trusted and supported each other.

Fostering a Strong Community

One of the main strengths of thredUP is its strong community, which has been instrumental in growing its user base. There are several ways the platform fosters this community:

Emotional Connection: thredUP’s unique value proposition of containing an average of 15-20 items per box is not just about practicality; it’s also about the emotional connection users have with the items. Seeing another family extract value from their gently used clothes can be a significant emotional win, leading to more listings and picks. Social Media: The community aspect extends beyond the platform, with active participation on social media platforms. The presence of a vibrant Facebook wall showcasing the user’s activity and success stories helps attract new users through referral and word-of-mouth marketing. Community Creation: thredUP has also seen the creation of communities among users, particularly among mothers. These communities often form around the swapping process, creating a sense of shared experience and mutual support, which helps in retaining and growing the user base.

Expanding the User Base with Affiliate Marketing

While thredUP has seen organic growth and user referrals, it has also implemented strategies to acquire new users more actively. Affiliate marketing has played a significant role in this expansion. Here’s how:

Partnership with Google Affiliate Network: thredUP is part of the Google Affiliate Network, which allows bloggers to promote the platform. These affiliates earn a referral fee for each new user they bring. This strategic partnership with bloggers taps into the existing audience of parenting and lifestyle niche blogs, driving targeted traffic to the platform. Targeted Outreach: By working with the right bloggers, thredUP can access a pre-existing audience with a significant interest in second-hand clothing and sustainability. This ensures higher conversion rates as the audience is already engaged with the core values of thredUP. Educational Content: Many of these bloggers also provide educational content and reviews about the benefits of using thredUP. This not only drives traffic but also enhances brand awareness and trust.

Conclusion

thredUP’s approach to user base building is a testament to the importance of addressing the chicken and egg dilemma in two-sided markets. By initially incentivizing listings, fostering a strong community, and employing targeted affiliate marketing, thredUP was able to create a vibrant and engaged user base. As the platform continues to innovate and improve the user experience, it is well-positioned to continue its growth and expand its impact in the second-hand clothing market.

For Dads and lifestyle bloggers interested in promoting sustainable fashion choices, thredUP offers an excellent platform to connect with new customers while contributing to a more environmentally friendly future.