The success of resale businesses right now hinges on consumer costs, say the investors of 'Shark Tank'

Mark Cuban and the Retold Recycling cofounders closed a deal for $300,000.

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• Mark Cuban invested $300,000 for 25% equity in the resale startup Retold Recycling on "Shark Tank."
• The cofounders are tapping consumer and investor interest in the resale and sustainable-clothing spaces.
• Here's what the cofounders learned about running a resale business on "Shark Tank."

Retold Recycling aims to reduce the 12 million tons of textile waste that Americans create each year, the company's cofounders, Alan Yeoh and Amelia Trumble, told the investors of "Shark Tank." 

Yeoh and Trumble are hoping to do this by tapping consumer and investor interest in the resale and sustainable-clothing spaces. The founders recently told Insider they expect the resale-clothing industry to continue to grow this year as more people seek ways to recycle resources and reduce waste. 

Mark Cuban saw the potential and agreed to invest $300,000 for a 25% stake in the business during an episode of "Shark Tank" that aired in February.

Retold charges customers $14.50 to purchase a biodegradable bag they can fill with up to five pounds of unused clothes or other textiles. Users then ship their goods, using a prepaid label, back to Retold. From there, the company distributes the items to its recycling partners, which is made up of a network of thrift stores, upcyclers, and textile recyclers. 

Here's what the cofounders learned from the celebrity investors about running a sustainable-resale business during their time in the tank. 

It's a growing industry, but costs are high

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As consumers become more conscious of how their shopping habits can contribute to waste, many are looking for alternative options. 

"We've been running Google Ad Words and the demand for people typing in 'clothing recycling near me' has very much been fueling our business," Trumble said on "Shark Tank." 

Despite consumer interest, the celebrity investors saw some hurdles for the cofounders. The guest shark, Emma Grede, the cofounder of Good American and founding partner of Skims, noted that Retold Recycling's costs could be an issue for some users, especially as people are restricting spending amid increased inflation. 

Cuban noted that he gives a lot of clothes away using donation centers like Goodwill. "But my cost is only some time," he added. "Why would I use this instead?"

In response, Trumble said the company frames the added costs as a convenience factor: Users won't have to drive to donation sites and can give away items some places won't accept, like used underwear.

Partnering with other brands has business potential

Emma Grede said Good American and Skims have programs to address their end-of-season waste.

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While the sharks supported the mission of Retold Recycling, many didn't see a business opportunity for themselves or a way to turn a profit.

Grede and Cuban suggested the cofounders focus on brand partnerships and lean more heavily into its already-existing white-label program that allows other businesses to use Retold's service for their customers.

The North Face, Levi's, and American Eagle support similar initiatives by offering customers gift cards for donating used clothing and footwear, Insider previously reported.

"All brands are looking for something that they can offer their consumers to appear to be more sustainable," Grede said.

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