The art of resale, 'the thrill of the hunt' is a a multi-billion

The inventory comes to you. You determine the pricing and the items that match the seasons. Sounds easy right? Not necessarily.

Other than the inventory, operating a thrift/consignment shop requires the same business decisions many retailers face. It takes research, yet there's no doubt that it is an emerging trend.

According to the National Association of Resale and Thrift Shops, the industry is experiencing a growth of about 5 percent a year. And the number of resale, consignment and thrift shops in the United State is more than 20,000.

The industry is competitive, and one consignment store owner refused to comment about the differences in the business decisions, because she didn't want to provide information that might give her competitors an edge.

For example, there is no set formula for determining pricing. Margaret Garcia, owner of Between Friends, said that the pricing is the toughest part of the job.

Garcia's shop has become a neighborhood favorite, known as the "Cheers" on its block. But she sells only used women's business clothing, not beer.

Eighty-five percent to 90 percent of her clients are regular customers, and Garcia knows many of them by name, she said.

Garcia bought the store six years ago, but the shop has been in the same location for 30 years. She worked for the previous owner for more than a year.

Resale is a multi-billion dollar a year industry. According to NARTS, Goodwill Industries alone generated $1.64 billion in retail sales from its 2,077 thrift stores in 2005.

NARTS executive director Adele Meyer, author of "Guide to Opening a Resale Shop" said the main reason some of the shops don't make it past the first year is because owners don't do their homework. The second biggest factor for lack of success is location, reaching the right demographic with the right merchandise.

And it isn't just pricing, she said, it is the selection.

"The merchandise that you accept can make or break the business."

Garcia said she only accepts about 40 percent of the merchandise that comes through the door.

Kathleen Foster, who has owned Everything For Kids for 13 years, also bought a pre-existing store, but relocated after a few years to a neighborhood with more families.

She said the store was more resale than consignment, and that she changed because she wanted to have stricter guidelines and not own the merchandise.

However, consignment involves a lot more paper work, Foster said. For resale you buy the items and put your price on them. With consignment, you make an agreement with the owner of the item and pay them a portion of the price, she said.

A big difference between a consignment store and a regular retailer is access to the latest fashions, Garcia said. The philosophy at Between Friends is that as long as it has been in retail during the last two or three years, the shop will take it.

But, this can be tricky. For example, Garcia said she has decided not to take overalls because they simply aren't in style and the shop will only take double pleated pants if they are a name brand and in good condition.

And there's always a limited selection. "We can't go into the back room and get a different size," Garcia said.

With consignment shops, you can set the conditions though. Foster only accepts items that are laundered, on hangers and wrinkle free, and she does not take clothing from smoking households.

Also, with resale, there is usually a high turnover and a constantly changing selection. Garcia said her shop receives up to 150 items a day.

"If they don't find it on Monday, they know by Friday we will have another 500 new items - it keeps them coming back."

Plus, there isn't any worry about returns - most consignments don't accept them.

So, why are consignment shops so popular?

"It's the thrill of the hunt," Garcia said, "finding that great treasure and at a bargain price."

Copyright 2007 Dolan Media Newswires
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