Thrift Shops

[HomeBusinessMan]

Not, to change the subject, but a couple of years ago thrift shops were quite the rage in our area. Now all of the sudden I have seen them go up for sale, one after the other. I don't know if the concept is dying or the money is just too thin. (Bad economy). It sounds fun, like the tv show and the "wow factor" as stated above. I like the idea of storage auctions to thrift store, but the risk seems worse, and not better. Any thoughts?

[SteveM]

I don't know anything about the "Thrift" business, but generally speaking, if all those businesses are going up for sale, I would take that as a bad omen. Thriving businesses rarely go up for sale, and if one niche of businesses seem to be selling all at once, I think it's safe to say it would be a risky investment.

Plus, the guys and gals on the TV shows probably make more money off the show then the business, which is why they have so much fun!

[greenoak]

the ones i know that are doing well are UPSCALE THRIFT... its very in right now... the whole green idea, and recycling, ... they might not sound like thrift shops..in consignment stores , the surviving ones are the pickiest.... with great presentation and high class merchandise.....
another thing that probably explains all the closings is how popular the idea is and how cheap it is to get into.... so naturally it attracts lots of people with not enough money or savvy to make it work...we see many stores come and go every year....
. our store is kind of about thrift....its half antique and half new merchandise.....but we have a huge inventory and sell to a big group of loyal customers...good stuff at reasonable price is a popular spot to be in!!!!
a store full of takky overpriced easy to find stuff isnt going to attract many...

[KristineS]

I know we've seen a lot of thrift stores start up in our area and then a lot close down quite quickly. Upscale stores tend to do better, and niche stores, like children's clothes or sporting goods. My guess is a lot of people started these kinds of stores thinking they'd do well because the economy was bad, but didn't really have a plan for running their business. If that happens, you will close down pretty quickly regardless of the type of business you start.

[huggytree]

when you walk into GoodWill what do you smell???????????

i think many thrift stores have that same 'old person' 'musty/basement' smell

if its not upscale i dont see how it works

many resale shops also sell too high.......you need to get things for dirt cheap and sell for 50-100% markup.........i love to watch Storage Wars....i doubt the business is as easy as it looks....i think the resale store has to be in the perfect location and have the perfect goods to work....ill bet the ones that go out of business have the old person smell, low-medium quality items and want close to new prices

[lucas.bowser]

I think people don't understand what their working capital will be, and the fact that they won't be able to get it out of their store so long as they own it. People who invest all their savings in starting such a store have nothing left when it comes to emergencies. If you're not prepared to deal with that fact, then you fail.

A second thing is not understanding the level of sales you will need just to meet your fixed cost requirements before you even earn a dime as an owner. Say your annual fixed costs (excludes inventory costs, which are variable) are $120K per year. That means at a reasonable 40% markup you would have to sell north of $300K worth of inventory every year in order to break even.

Another reason they fail is a lack of supply chain. Goodwill gets donations galore every day, so their inventory purchases are small and they are constantly getting new items. For profit thrift stores usually have to buy their inventory. How do you do that? Garage sales, auctions, Craigslist, discontinuation wholesalers, etc... If you can't get inventory into the shop, you can't sell it in order to cover your overheads.

[billbenson]

My wife has a thrift shop tour she does weekly. She has a closet full of designer shoes and hand bags. My closet is full of shirts from Pollo and other designers. She pays about $5 for shoes that are new and worth $100 or more. It takes a lot of work on her part to do this though. She will use Google on her phone from the thrift store to see what things are worth. She also researches on how to tell if hand bags etc are Chineese knock offs or the real thing.

One of the things that happens is that thrift stores don't know how to price things. Supposedly they are donations, whether it is a church thrift or Goodwill. She will find things that are cheaper at Wallmart or Macy's than in the thrift stores. She also finds incredible deals like my new or hardly used designer shirts she buys for $5 or so. Sometimes they are $70 or more retail.

She is having more trouble finding things though. Donations are down because even the wealthy are watching their wallet more and donating less. Goodwill now buys goods from Wallmart and sells them. After the markup they are frequently less expensive at Wallmart, but people assume they are a better deal at the thrift store.

I think the fact that donations are way down is what is killing the thrift stores.

@Huggy, Goodwill moves stuff that isn't moving to other stores. You will find the old person smell in most stores, but location does matter for what type of merchandise they have. Also, one may be better for furniture and another for clothes. It's not so much upscale as finding the pearl in the sand.

[KristineS]

I know several people who do something similar to what your wife does, Bill. Our town even put out a guide a while back with all the thrift stores listed in it so people could make the tours. If you're willing to invest the time, you can find some deals. It also helps if you make a connection with the people who own the store.

[marge]

I am a new member. Inexperienced in the business aside from craft shows and flea markets. I live in PA and would really like open my own thrift type shop. Any feedback, good or bad, would be appreciated.

[BIZDEV]

I am a new member. Inexperienced in the business aside from craft shows and flea markets. I live in PA and would really like open my own thrift type shop. Any feedback, good or bad, would be appreciated.

Hi Marge,

Opening a thrift shop sounds fun and interesting...but it is very hard work. I owned a franchise resale store a few years ago. If you have no experience it will be difficult to pull this off. If you are determined to do it keep in mind the importance of the right location. Any business owner will tell you location makes all the difference.

Before you do anything else you must put your plan on paper. Write up a formal business plan. There are many different thoughts on this subject, but especially for a brick and mortar business, you must have the details on paper. After you write the business plan you will know if this is a viable idea. You will know exactly what you need to do to open your business.

Good luck to you!

[PayForWords]

Sounds dedicated! And yes, I figured Goodwill was doing something fishy as they overcharge for just about everything minus books.

[billbenson]

Sounds dedicated! And yes, I figured Goodwill was doing something fishy as they overcharge for just about everything minus books.

Not an accurate statement. My wife does a thrift shop tour weekly including Goodwill stores. The stores operate independently as far as I can tell. I have a closet full of name brand shits like Polo. In new, or newish condition. She has a closet full of brand name shoe worth 85 to 100 dollars. She picked up a pair of $180 dollar shoes the other day for $15. But the prices vary dramatically between stores. She won't pay more than $6 for a designer shirt or $10 for a pair of shoes.

Goodwills charter is to employ and train the employable. It is not a traditional thrift store. You can get good deals there and you can also find products from Walmart (Walmart appears to support GoodWill). Sometimes the Walmart prices are higher than Walmart. Sometimes not.

In short, GoodWill is a training organization to put the unemployabe into the workforce with a skill

[PayForWords]

$15 for a pair of used shoes that you don't even know who wore doesn't sound like a HUGE bargain to me BUT...


This is just my opinion of course. Either way, you're absolutely right! The Goodwill does put people to work...


But pays them minimum wage IF they are lucky. In fact, most handicapped people that work for the Goodwill get paid a couple dollars at best.


Why? Because they should be thankful they even have a job in the eyes of the good ol' Goodwill.


But we're all entitled to our own opinions. Glad you're getting some bargains though!


Especially considering they make what, 7 billion dollars a year? Their President was making 800K+ a year?

[billbenson]

$15 for a pair of used shoes that you don't even know who wore doesn't sound like a HUGE bargain to me BUT...


This is just my opinion of course. Either way, you're absolutely right! The Goodwill does put people to work...


But pays them minimum wage IF they are lucky. In fact, most handicapped people that work for the Goodwill get paid a couple dollars at best.


Why? Because they should be thankful they even have a job in the eyes of the good ol' Goodwill.


But we're all entitled to our own opinions. Glad you're getting some bargains though!


Especially considering they make what, 7 billion dollars a year? Their President was making 800K+ a year?

It's a training ground. In college you pay people $100k for an education. Here it's the same analogy except you learn a lesser skill in many ways but they pay you to do it. Would you rather have lower income people learn a trade or shoplifting for a career.

Who the F*** cares what the president makes? Many make a lot more than that. In fact that is a low price for a profitable 7B company these days. If they make 7 gigabucks a year and put it back into helping society who cares. I didn't hear you say They are hording it in the Cayman Islands.

I guess you are better than my wife who will wear a pair of 'like new shoes'. You have to have a pair of new shoes to fit your ego. Oh, she bought a $300 purse the other day for $25. I guess you wouldn’t let your wife wear that. And in case you didn't know, there is this thing called the internet. You can go there and figure out what the retail cost is for things. And you can also go to many sites to see if a purse was made in China. OH AND GET THIS, YOU CAN DO THIS WITH YOUR SMART PHONE.

[PayForWords]

1. A training ground? I checked a few local Goodwill locations and they offer:

1. Computer training
2. Phone Training
3. Security training

And charge you for ALL of it. Education aye? Computer Training "Basic Computer Skills"


What a joke that system is. If anything, they are good with putting people in touch with real companies that create real jobs.


And no, I'm not saying I'm better than your wife. I just don't see it as that much of a deal.


Finally, just because something retails for $300 doesn't mean it is worth that second hand lol.


If it was, it would sell for that. You could sell it for that BUT, retail doesn't account for already having an owner.


Therefore, no that purse isn't WORTH $300.


But no, to answer your question. I'm not better than you. I just don't like the idea of wearing someone else's stuff.

[billbenson]

The purse I was referring to was in 'like new condition' and she bought it for $25.She has a bunch of purses. They all look new. If it were me, I'd go online and buy what I want. She likes shopping. That's why I have a closet full of 'like new' polo shirts. Oh, by the way, she also finds new shoes as well. Not a scuff mark on them. That applies to other products as well. And believe it or not, I haven't gotten herpes yet from my used polo shirts.

Goodwill has a bunch of pay for services. What's wrong with that? They are a for profit company.

[PayForWords]

The purse I was referring to was in 'like new condition' and she bought it for $25.She has a bunch of purses. They all look new. If it were me, I'd go online and buy what I want. She likes shopping. That's why I have a closet full of 'like new' polo shirts. Oh, by the way, she also finds new shoes as well. Not a scuff mark on them. That applies to other products as well. And believe it or not, I haven't gotten herpes yet from my used polo shirts.

Goodwill has a bunch of pay for services. What's wrong with that? They are a for profit company.


Good for you. Glad you are finding so many deals :o I find some there from time to time outside of clothes so no worries!

[billbenson]

Ok, we have highjacked this thread enough :)