Prepaid envelopes are the key behind thredUP’s business concept, which follows a model like that of the virtual movie rental service Netflix.
Helping users swap the clothes they don’t want for some they do, thredUP has users purchase prepaid envelopes in which they receive an item of clothing for each envelope they’ve purchased. The items they received are chosen by thredUP according to the user’s preselected preferences (brands, sizes, and styles) in their ‘virtual closet’.
When the user receives their envelope(s), it also comes with an address to send one of their own items to. If they aren’t happy with the item they were sent, they can list the item on the thredUp site as one to trade.