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is a 'resale' shop a viable business opportunity? - Page 2

post #16 of 52


this is essentially what plenty of people do on this forum, and more specifically in the Official Thrift Brag Section.  I do this very casually aka spending 2 hours in thrift stores a couple of times a week.  Granted that thread promotes a really neat culture of trading and not-for-huge-profit bartering, it is still a really great resource. My area isn't the most consistent to thrift in, but, with a discerning eye, I have managed pick up several items and quickly sell them up to 21x my cash outlay on eBay.  I am doing this purely as a hobby and therefore will probably never make a living or a viable salary off of it.  But, it can buy me and the misses the equivalent of an iPad and a nice boozy dinner each month then I am happy.  I can see the possibility of this being a viable business - there is a 'Men's High-End Second Hand' consignment shop in my town and it seems to stay afloat in a decently high-rent building. 

 

What about a model where your store has a small B&M presence and also delivers another service that pulls members of the 'cute downtown' into the store..or partners with another venture ... say upscale men's hair boutique that has scantily-clad hairdressers.. say an ice cream shop or something that can cover some of the monthly expenses more readily than the consignment / 2nd hand clothes. 

 

I think your audience and customers are far more likely to buy from their couch on a sunday evening on eBay.

 

.02

 


 

Quote:
Originally Posted by jgold47 View Post

yeah - as said, I would buying items at your basic thrift prices. In some cases they are fixed to the type of item, in other cases they vary with the brand. some do discount days as well. That said, I think you can take an item out of thrift store, and mark it up at a higher price point. My supposition is that people would be more willing to spend money on a cultivated collection of higher end merch at a 'resale' shop vs going to a thrift store. Not outrageous, but if I could buy say a polo button down for 3-4 bucks and mark it up and sell it for 15 - 20 bucks, I think there may be something there. same with jeans, tops, etc... and thats without touching women's stuff, I haven't fully thought that through yet.


 

post #17 of 52
Quote:
Originally Posted by jgold47 View Post

yeah - as said, I would buying items at your basic thrift prices. In some cases they are fixed to the type of item, in other cases they vary with the brand. some do discount days as well. That said, I think you can take an item out of thrift store, and mark it up at a higher price point. My supposition is that people would be more willing to spend money on a cultivated collection of higher end merch at a 'resale' shop vs going to a thrift store. Not outrageous, but if I could buy say a polo button down for 3-4 bucks and mark it up and sell it for 15 - 20 bucks, I think there may be something there. same with jeans, tops, etc... and thats without touching women's stuff, I haven't fully thought that through yet.

There are two thrift stores of the sort you mention that I used to visit, both of them feel like functions of the community rather than straight-up arbitrage, but I could be mistaken. One is still open, but the one I preferred closed down a few years ago. The one I really liked could be counted on to have something really good in my size once every couple of weeks. I mean, a T&A shirt, Ferragamo tie, Armani jacket, Paul Stuart suit (that I still wear). I really liked that place.

The problems they ran into, though, was 1) a glut of inventory that didn't move: they were in a nice area of town where everyone had plenty of everything - so the goods came in hand over fist, but prospective buyers had to drive a ways to get to the store. By way of example, I picked up the aforementioned suit that had been marked down twice already from the thrift price. Later on, I picked up a Mani jacket for $5. There were other suits that just lingered from visit to visit. So you have to be prepared to cull your stock rapidly and take losses on them - because if people walk into your store and keep seeing the same old same old, they'll stop coming.

The other big issue is the time and effort to walk the tightrope of picking what you think will move, and pricing it accordingly. You have to cull through troves of crap to get a decent crop of goods that will move, and that time has to be compensated somehow, and your vendors have to be stroked a bit to keep from holding back the nicer goods, once they know you're roving through their bins to flip their goods.
post #18 of 52

Outstanding point regarding Plato's Closet.  They can get away paying MUCH less than you would end up paying at Goodwill, Sally etc. People come to them and donate their clothes for a minimal cash return.

 

You are failing to incorporate the expense of gas, tires, oil change, car wear.  In order to sustain a B&M selling items at a 4-5$ net profit you have to HIT stores every day. Most of the time coming away with .... nothing.

 

Quote:
Originally Posted by MrG View Post


I'm sorry, but this sounds completely outrageous from a business perspective.
First, you don't have a reliable inventory stream. What happens when you've bought up all the merchandise in the area? The supply to the stores you want to use as a supplier is finite, and, for you to make money, you're going to consume merchandise at a pretty good clip. You need high volume to make a profit, and you need a steady stream of product. The places you're buying from, on the other hand, don't necessarily have to turn a profit, and, even if they do, they're much more diverse in terms of selection.
Second, you're vastly overestimating the willingness of people to pay five or six times as much for an item simply for a bit of convenience or air of quality. They may be willing to pay a bit more, but you're talking about an enormous increase in terms of price. In order to maintain a large enough margin for you to be profitable, you'd have to charge more than people are willing to pay for the added convenience.
Third, a very similar model already exists, at least where I live. It's call Plato's Closet, and I believe there are similar businesses, as well. The difference is in the way they acquire inventory, and their way appears to be vastly superior.
I agree with others who have said - this might be something worth doing in an online format, but I just don't see how it's remotely viable in a brick-and-mortar, high-overhead setup.


 

post #19 of 52
Thread Starter 
I dont know. I have been in these higher end stores. they exist. I buy stuff from them sometimes. I think there is a healthy premium that can be charged for the convenience of and candidly lack of stigma associated with thrifting. Everyone wants to buy that stuff, just most people are embarssed. I got this at salvation army. I got this at that cute resale shop downtown. I think its a totally different conversation

Inventory would be a huge issue, thats where the consignment aspect would come into play as well. I agree going right to a BM would be an issue, especially from an inventory perspective. I sort of planned to keep my day job (which is part of the reason I am able to visit all these markets) until it took off.

I like the idea of partnering up. There is a guy in this town who just opened a high end mens formal wear (suits, etc...) resale shop. I havent had a chance to go in there and meet the guy yet, but perhaps one takes the formal and one takes the informal.

I also disagree with the concept that people would rather buy from their couches. Especially when it comes to clothes. I know too many people who need to touch and feel clothes to be comfortable buying them. I think there can be an online component, and that portion may be more profitable in a sense, but I don't think this can solely be an online experience.


I think this is sort of two separate conversations -

1. can this type of business truly be profitable.
2. Does this work for me.

based on what people are responding, it likely would make more sense to start this out online on forums and ebay and see if I am even any good at picking stuff out. Bank that, see how hard it is to get inventory to sell, and then go from there.
post #20 of 52
This model has worked for many years around the country for high quality women's wear. Women will buy and sell Louis Vuitton handbags, designer dresses and shoes that they may one wear once or twice. As far as B&M stores it has only seemed to have worked in select cities for higher-end men's wear from what I have seen. I'm not sure exactly why.

The source of inventory however is rarely thrifting but rather aggressive advertising to high-end residents that you "buy and sell gently used high-end fashion". What you want are "clothes horse" doctors, attorneys and other wealthy proffessionals who buy a lot of stuff and never wear it and then bring it in to you to buy from them. It is all about big name labels Gucci, Kiton, Versace, etc., when it comes to men's wear resale shops.

You really need to know the value and popularity of the merch.
post #21 of 52
Actually, you can boil it down to 1) can it be profitable? If it's a money pit, it won't matter if you enjoy the work or not.

BTW: if you take the informal side, good luck. You're limiting yourself to low-dollar goods and now have to churn through them much more rapidly - although sizing is less of an issue. But consider how many shirts you've got to sell at $20 a pop to cover the fixed nut alone.
post #22 of 52


They do exist.  My soon-to-be wife will not go in thrift stores with me but will moast certainly go into a 'high-end boutique'.

 

profitable? maybe, in time. 

 

 

I would just think that using my approach would suit you better for the beginnings of your venture.  Is your goal to make a main income? if so, try something else.  If its to supplement your income with ~500-750$ / month then eBay / B&S / AAAC is the place to be.  Also fwiw,  I get my family members in other cities to scoop a few stores as well.  I give them a simple 10 brand list so they can run in and run out. 
 

Quote:
Originally Posted by jgold47 View Post

I dont know. I have been in these higher end stores. they exist. I buy stuff from them sometimes. I think there is a healthy premium that can be charged for the convenience of and candidly lack of stigma associated with thrifting. Everyone wants to buy that stuff, just most people are embarssed. I got this at salvation army. I got this at that cute resale shop downtown. I think its a totally different conversation
Inventory would be a huge issue, thats where the consignment aspect would come into play as well. I agree going right to a BM would be an issue, especially from an inventory perspective. I sort of planned to keep my day job (which is part of the reason I am able to visit all these markets) until it took off.
I like the idea of partnering up. There is a guy in this town who just opened a high end mens formal wear (suits, etc...) resale shop. I havent had a chance to go in there and meet the guy yet, but perhaps one takes the formal and one takes the informal.
I also disagree with the concept that people would rather buy from their couches. Especially when it comes to clothes. I know too many people who need to touch and feel clothes to be comfortable buying them. I think there can be an online component, and that portion may be more profitable in a sense, but I don't think this can solely be an online experience.
I think this is sort of two separate conversations -
1. can this type of business truly be profitable.
2. Does this work for me.
based on what people are responding, it likely would make more sense to start this out online on forums and ebay and see if I am even any good at picking stuff out. Bank that, see how hard it is to get inventory to sell, and then go from there.


 

post #23 of 52
Quote:
Originally Posted by pocketsquareguy View Post

(...)
The source of inventory however is rarely thrifting but rather aggressive advertising to high-end residents that you "buy and sell gently used high-end fashion". What you want are "clothes horse" doctors, attorneys and other wealthy proffessionals who buy a lot of stuff and never wear it and then bring it in to you to buy from them. It is all about big name labels Gucci, Kiton, Versace, etc., when it comes to men's wear resale shops.
(...)

In other words, put your store near SpooPoker's mansion and you should be set.
post #24 of 52
Quote:
Originally Posted by jgold47 View Post

I like the idea of partnering up. There is a guy in this town who just opened a high end mens formal wear (suits, etc...) resale shop. I havent had a chance to go in there and meet the guy yet, but perhaps one takes the formal and one takes the informal.

This idea just went from "slim chance of success" to "train wreck".
post #25 of 52
Thread Starter 
Quote:
Originally Posted by Steve Smith View Post

This idea just went from "slim chance of success" to "train wreck".

You obviously dont know me. This was a train wreck before it even started smile.gif
post #26 of 52


All of this information the OP provided was under the assumption that there was no clothing/consignment/second-hand stores around the vicinity.  I just nod[1].gif when I saw the OP explain there was a 'HIGH-END FORMAL WEAR' store on the high street already and decided I would no longer read this thread....

train wreck is being kind. peepwall[1].gif
 

Quote:
Originally Posted by Steve Smith View Post


This idea just went from "slim chance of success" to "train wreck".


 

post #27 of 52
Is there a SCORE in your area?

http://www.score.org/

My (limited) experience with SCORE (in my area) has been very, very positive. There are people in your community who care a great deal about making the most of these opportunities. In a real way the whole community loses if you screw it up. A lot of older small businessmen understand this and for that reason they donate their time and expertise to plans like yours through SCORE.

SF is not a great place for getting honest or non-catty or accurate answers to your questions.

In theory, sure, anything could work. In practice, it is the details that matter. There are many ways to torpedo what could be a successful small business, and many of them will be very specific to where exactly you would like to set up shop.
post #28 of 52
Quote:
Originally Posted by jgold47 View Post

You obviously dont know me. This was a train wreck before it even started smile.gif

lol. It's good to see a sense of humor.

Seriously, I have several issues with your plan:

1. I don't think it is scalable, even to the extent of your plans. It is easy to go out and thrift 10 items for $3.39 each and sell them on ebay for $15 each. Thrifting an adequate number of items to stock a retail store would be a huge undertaking and may not even be possible in your area.

2. There is a lot of upfront expense involved in an operation like that; insurance, upfit for the space, deposits, registers/credit card stuff, stocking the store...the list goes on. Most of that is money which you can LOSE. Do this from your home and you can't lose money.

3. Biggest of all, I don't see it as an opportunity worth pursuing. By that I mean that I don't see adequate financial upside to justify the financial risk and personal obligations you will be taking on. Do you really want to be tied to that location 6 days per week? It can start to feel like a prison.
post #29 of 52
Thread Starter 
Quote:
Originally Posted by Samuel Smith View Post



All of this information the OP provided was under the assumption that there was no clothing/consignment/second-hand stores around the vicinity.  I just nod%5B1%5D.gif when I saw the OP explain there was a 'HIGH-END FORMAL WEAR' store on the high street already and decided I would no longer read this thread....
train wreck is being kind. peepwall%5B1%5D.gif

There are actually a couple. This guy does mens suits and shit, another caters to women (more blue hairs). You can have multiples if your targeting different customers.
Quote:
Originally Posted by Steve Smith View Post

lol. It's good to see a sense of humor.
Seriously, I have several issues with your plan:
1. I don't think it is scalable, even to the extent of your plans. It is easy to go out and thrift 10 items for $3.39 each and sell them on ebay for $15 each. Thrifting an adequate number of items to stock a retail store would be a huge undertaking and may not even be possible in your area.
2. There is a lot of upfront expense involved in an operation like that; insurance, upfit for the space, deposits, registers/credit card stuff, stocking the store...the list goes on. Most of that is money which you can LOSE. Do this from your home and you can't lose money.
3. Biggest of all, I don't see it as an opportunity worth pursuing. By that I mean that I don't see adequate financial upside to justify the financial risk and personal obligations you will be taking on. Do you really want to be tied to that location 6 days per week? It can start to feel like a prison.

Thanks - that really does sum it up.

i stopped by a couple of places running around today. I think I greatly underestimated the challenge of finding the inventory. I may try this on the interwebs side with a few things here and there and see how it feels.
post #30 of 52
what you're describing is basically what i like to call 'every vintage clothing store on etsy.' my girlfriend runs an etsy shop like this, and while it's ok as a hobby, i don't think it could really work as a business.

some issues with your strategy beyond the obvious ones (sunk costs):

- i get the impression that you'd only be selling men's clothes. there are far fewer men buying clothes online
- the big problem with buying lots of men's clothes from a thrift store is that: a. the men's selection at thrifts stores is worse than the womens, and b. most of the clothing you find there is obviously dated. there's much less of a 'vintage' movement in men's fashion, so nobody is going to want to buy an ugly blazer from the 70s.
- most men like to buy clothes from a store that throws in the tailoring.
- it's hard to take good pictures of clothing. you need a good lighting set up and an expensive camera.
- paypal/credit card transaction fees will eat you alive.
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