With school shopping season now in full swing a lot of parents are encountering an annual problem – their kids no longer fit into their old clothes. Updating a child’s entire wardrobe is an expensive business, but a new San Francisco-based startup called ThredUP aims to make the process as painless – and cheap – as possible.

The brainchild of Harvard Business School graduate James Reinhart and co-founders Oliver Lubin and Chris Homer, the idea behind ThredUP is simple. ThredUp allow parents to sell their kid’s old, outgrown wardrobe, and upgrade to a new one – at a heavily discounted price.

In order to sell clothing, you’ll need to order a ThredUP bag which costs $4.95 for a bag deposit (refunded once your bag is received). With families in mind, the bag is spacious enough to fill with garments from multiple kids.

Once received, ThredUp then assess the clothing and ensure that it is up to their quality standards. You’ll be able to get more money if you send in name-brand clothing, anything that still has the tag, or articles that are appropriate for the current season. All payments are cashed out to parents through PayPal.

On the buying end of ThredUP, customers will be able find great quality clothing for their kids at up to a 75% discount. As an added bonus, parents no longer need to drag their kids to the store – they can do all their shopping online. Despite the heavily discounted prices, ThredUP maintains a margin by taking a cut on the proceeds of each sale.

To date, the 2nd-hand clothing startup has managed to raise $8.7 million from the likes of Redpoint Ventures, Trinity Ventures and former eBay CEO Brian Swette. ThredUp also plan on expanding their product base to allow the swapping of books and toys in addition clothing.