What The Heck Is A Reseller?
For most, the idea of generating an income solely from reselling items commonly found in Thrift Stores is inconceivable. However, this once niche idea of generating “semi-passive” income has hit the mainstream fiercely.
According to Wikipedia, “A reseller is a company or individual (merchant) that purchases goods or services intending to sell them rather than consume or use them.” The concept of reselling is undoubtedly not a new phenomenon. Any chance to make a quick buck is as American as Apple.
Pie. However, in recent years, the reselling craze has taken on a life of its own!
There is a certain sense of freedom, accomplishment, and pride in being the proprietor of a business.
Many people spend their lives identifying inefficiencies in the market and developing clever ways to solve those inefficiencies. As many entrepreneurs attest, this process is the hallmark of a successful business. But how does this principle relate to the idea of reselling?
We spent a considerable amount of time pondering this same question. What problem are “resellers” solving? Why are so many people ditching their stable 9 to 5 jobs to pursue a reseller’s “fast-flipping.”
lifestyle? First, we think it is best to add a bit more context…
I think it is best to contextualize…
The idea of purchasing something at a low price and then turning it around for a profit is certainly not a new concept. However, this process is worth considering when analyzing today’s Thrift Store Business model.
Retail establishments, including thrift stores, were never designed for existing in a Business 2 Business relationship. Retailing and wholesaling are two completely different business models, each with its own unique market conditions that affect long-term sustainability.
By their very nature, Thrift Stores are designed for existing in a Business 2 Consumer relationship. When a product lands on a shelf in a retail trading space, it has finally reached the end consumer. If a retailing business desires to be sustainable, then indeed, some reasonable profit margin has to exist on the items they sell. Otherwise, they cannot cover the costs associated with operating and maintain a worthwhile profit margin.
If That’s The Case, How Do Resellers Exist?
We are going to let you in on a bit of a secret. It all has to do with THRIFT STORE MAGIC….and supply.
Operating a Thrift Store is way more expensive and back-breaking than many realize. A 10,000 square foot Thrift Store processes several tons of clothing, thousands of pieces of bric-a-brac, and hundreds of pieces of furniture every month.
Processing all that material is excruciatingly difficult. Most thrift store establishments simply do not have the resources to efficiently process all that material and capture every cent of potential revenue in every item. As a result, some severe treasure makes its way to the sales floor for
unbelievable prices. This is the magic of it all, and it’s what makes thrifting a lot of fun.
This Is Where Resellers Come In!
Without a doubt, you can certainly make a substantial amount of money reselling items from Thrift Stores. Resellers will memorize their favorite store’s monthly sales cycles, cozy up to the volunteers and workers at their favorite locations, and keep track of when the donation truck drops off new merchandise.
Many resellers follow current trends religiously, scouring through the clothing racks hoping to find a vintage band t-shirt hot or brand name jacket. Both of which can be quickly sold at a profit on one of the leading e-commerce websites. For many, spending the entire day at a thrift store is not uncommon.
One reseller we recently spoke to claimed to have made $1,250.00 in one day after selling only five items sourced from a local thrift store. She claimed that she makes more money now than she did at her previous job as a paralegal.
The Excitement Of It All
There is certainly an emotional aspect to reselling, very similar to gambling at a casino. A significant amount of adrenaline exists when you search through the clothing racks, look through a
pile of jewelry, or watch the volunteers bring out a fresh load of furniture. Once you find a promising item, getting it listed online is like putting a quarter in a slot machine. The excitement builds as you watch people bid on an item you only paid a few dollars for.
It is addicting!
But Why Do Thrift Stores Actually Like Having Resellers Around?
For Non-Organizations, establishing sustainable and unrestricted revenue to support programs and services is extremely challenging. Thrift Stores are a viable solution to that problem. As consumers look for more sustainable ways to shop, thrift stores are an easy answer. As technology advances, more and more large secondhand good retailers are finding ways to analyze data and follow trends. Nowadays, Thrift Store Inventory Management Systems are capable of gathering substantial amounts of data. This data is used to maximize the value of heavily sought-after items. These systems track sell-through rates, quantities sold, average sale price, and total percentage sold. All these data points help management decide how to price their inventory.
To keep it simple, resellers are driving up the price on items that are limited in quantity. Twenty years ago, you could walk into a thrift store and find tons of vintage and brand-name items. Nowadays, thousands of people across the country are competing with one another to get their hands on unique and fashionable items.
Thrift Store managers do not determine the price of their items, the market does……
When hundreds of people pursue the same type of item, and the items in that category are limited, then the next logical thing to do is to raise the price. That is simply how it works. For example, if you list an item on eBay as an auction, you don’t set a ceiling for the auction so the bidding will automatically terminate once it hits an “ideal” number. You hope that the item goes into a bidding war and ends up making some serious money.
Thrift Stores are now starting to operate the same way.
The consumer will always ultimately determine the price of the item. And right now, resellers are driving up the prices on secondhand goods.
– Frank Honeycut