Why Resale is a (Really) Smart Business
Several weeks ago, we turned the telescope around and saw a mini-cosmic thumbnail view of the Great Cycle of Clothing from manufacturer to landfill. But this week I’d like to zoom in and talk about why the resale business is recession-proof. And I’m not just talking about “resale” as in, consignment and thrift stores. I’m talking about any process that converts waste into currency: the river of stuff, flowing from manufacturer to store to consumer and eventually ending up in landfills. How could reselling this stuff ever be a smart business idea? Well, let’s take a closer look at resale…
Textile waste in landfills
When consumers get rid of clothes they typically bring them to a charity or thrift store. These stores sort out the inventory they think is sellable (you’re not the only one doing lots of sorting!). Then they put it up for sale, and since their Cost of Goods is effectively $0, they can price things inexpensively.
If their inventory doesn’t sell, they will either ship it to another store to try it there (Goodwill ships its inventory around quite a bit), or they will sell it along with the things they deem unsellable in big bundles to a clothing grader.
Clothing graders may sort the clothes again, pulling out vintage items, cowboy boots or anything they think they can sell by the pound. They also sort out things they can ship and sell to the emerging world – lots of sneakers go to the global south, for instance. Everything that’s left gets turned into rags via chemical process, and these rags are sold in hardware stores and big-box stores like Walmart.
Resale As An Alternative to Landfills
But consumers like you have an increasing number of options for selling their used clothes. There is less of a stigma of wearing used clothes, and as the broader ‘Green’ movement continues to gain traction there will be more and more options.
Option 1) For example, there have always been yard sales and clothing swaps. Prices are cheap, and organization light.
Option 2) eBay. The prices are higher, but the selection is deep and for sellers willing to spend significant time taking photos, packaging items, and shipping inventory, this is still the most money a consumer can get for their unwanted used clothing. (Also consider Etsy: eBay is slowly being supplanted by Etsy as the premier option to sell Vintage clothing online.)
Why the Resale Model Will Continue to Grow
And in the middle of all of the mayhem is your little store. Nearly everyone has clothes in their closet that they don’t wear – the style doesn’t suit them, or they don’t fit into them anymore – but they don’t want to get rid of those items because they are “too nice” to donate or yard-sale.
By offering people a fair price for their nice clothing, you can convince them to part with their items before they go out of style and are no longer sellable.
In this way your store is extending the useful life of these items by providing another avenue for used clothes. As people bring you clothes (and they’ll bring you a lot of clothes!) you are taking some things and extending their economic value, while diverting some of the force behind the great “river” of clothes on their way to the landfill.
Local stores will also always have a huge advantage over online stores because consumers can try on the clothes! With online shopping, it’s always challenging to know if the clothes will fit, (or whether they will be flattering if they do!) In fact, we predict that it’ll be a long time before the convenience of shopping online surpasses the challenge of not being able to try things on. Plus, as a resale business, you can offer better prices and you can likely take a slightly broader range of items, while eliminating the pain of shipping merchandise everywhere.
And finally, a growing number of consumers are self-consciously supporting local, independent retail. They recognize that personality and a longer-term relationship with their shopkeepers are valuable things they don’t get from big-box chain stores, and that the money they spend in local stores is more likely to stay within a local economy.
Intrigued? Check out what ConsignCloud is doing to help convert waste to wealth in the resale world and ask for a demo of our beautiful software. Faster, better consignment is right around the hyperlink corner…