Resellers on social media are accusing their thrift stores of being greedy because they're raising the prices on their inventory. I used to think the same thing when I was roaming through my local Goodwill but then logic hit me.
*Since this is a blog geared towards Poshmark, I will be discussing inventory in terms of clothes.
Why Thrift Stores Exist
Contrary to popular belief, don't think thrift stores operate to just serve those that are down on their financial luck. I can narrow the typical thrift store shoppers down to a couple of groups:
- Those that just want a great deal
- Those that want to lower their carbon footprint
- Those that don't have a lot of discretionary income
- Those that love vintage things
- Those that love to treasure hunt
...and now enter
6. Those that are looking to resell
Even though I listed #6 under this heading, this does not mean thrift stores exist for us resellers. This fact is true not just for thrift stores but for ever other stores out there. I'm sure you've seen people share stories about going to Target for example and buying out a certain item because they felt it was underpriced in hopes of reselling it for a profit.
Moving forward, please refer back to the 6 groups I just listed.
Why We Think They're Getting Greedy
With no firsthand information whatsoever, most of us will assume thrift stores are getting greedier because they want to get into the reselling action that's been trending. I totally get this because I make assumptions myself without any firsthand knowledge. With that said, I do admit I agree with you guys on this to a certain extent but it's not the only reason why prices are going up.
Another reason why we might think prices are going up is due to us being on the other side of the fence. Put differently, a person in groups 1-5 will have no problem paying for a Coach bag at $30 while a reseller would be put off by the price; this is not the thrift stores fault.
While there are more reasons as to why we think thrift stores are getting greedier, I won't spend any more time on it because it's not important what we think.
Accept this Truth
Thrift stores don't want resellers in their stores, period. Resellers are not part of their business model and they don't accommodate to resellers in any way. As a matter of fact, resellers are competitors in the thrift store eyes, let me explain with this graphic I made:
1. A portion of soon-to-be donations are scooped up by resellers to resell. Alternatively, things that people would usually donate are being kept to be resold
2. Donations are made to thrift stores. At this stage, the thrift store is already missing out on what was lost in #1.
3. Donations are turned into inventory when they hit the sales floor
4. Resellers buy up inventory at a disproportionate amount
By studying the flowchart, you can see that inventory is choked not just on the front end (4) but also on the back end (1). This is why thrift stores don't like resellers. It really comes down to supply, and with supply you must mention demand.
The Supply and Demand economic model is really the culprit here. Some of you might already have connected the dots but I'll explain anyway.
Nothing is infinite in the supply world, ever. When the thrift store existed with only groups 1-5, it was easy for them to keep inventory stocked because those groups, for the most part, only shopped for items they liked that were in their size. But with the influx of resellers, supply is leaving the sales floor faster than ever. A person in group 1-5 might only find 3 pieces in their size that they'd actually wear but a reseller will buy 50 because their size a style is not a factor.
Admit It's Our Fault
Think about it, it's illegal for thrift stores to bar resellers from shopping at their stores. With that said, there's really no positive solution they can employ to make everyone happy. If they keep the prices low like they historically did, resellers will buy up more inventory, inventory that is finite. If they raise the prices to deter resellers, they will simultaneously deter their core customers (Group 1-5). As you can see, thrift stores are in a really tight space and it's because of us resellers. If you put yourself in their shoes, hopefully, you can more empathetic.
Furthermore, I don't think that they're raising prices because they want resellers to pay more for the inventory. It just doesn't make sense because if there's not enough room for profit, resellers will simply leave.
My point is we're only looking at it through a reseller's lens while neglecting to understand it from a thrift store's perspective.
So What Now?
Eventually, prices will be at a point where thrift stores and resellers are left at a standstill. If they don't go down on price, we won't buy. If they go down an inch, resellers will take that inch. It sucks for me to say but I don't think there's a long term solution for this growing problem.
Now, corporate thrift stores like Goodwill are truly getting into the reselling action by doing just that, reselling. If you don't know, Goodwill is leveraging Ebay by having their own online store and their own auction website to sell donations at premium prices and I don't blame them.
As resellers, I think we need to stop doing some things that will perpetuate the problem:
- Stop making thrift store haul videos just because you want the views or likes
- Stop making cost/profit posts that does nothing to add value to the reselling community
- Stop shooting videos inside thrift stores, you're essentially in your opponents home and saying how much you're gonna profit from them
- Stop hashtagging the thrift stores in your post, you're essentially "dry snitching" on yourself. In layman's terms, you're bringing unnecessary attention to yourself
As resellers, I think we need to start doing some things to hedge our risk for the future:
- Get creative with your sourcing strategies. I know this begs the question "Like what?!?!" but every state and city is different with their opportunities and threats so I won't give any suggestions. I'll leave it up to you guys to figure out
- Get your networking on and find people that will sell you hundreds or thousands of items at a time. I know I'm saying it like it's so simple but trust me, it's doable.
- Really ask yourself if your strategy is built for the future. If not, change it or move on to something else. This is the most important point I have on this list.
One Last Thing
Of course, this post can't end without me addressing those that think I'm making the situation sound worse than what it actually is. Sure, reselling has existed way before Poshmark and other clothing selling apps. Sure, you've always been able to find inventory almost on demand. But you're forgetting how much the game has changed with respect to the pace of how things are growing. Reselling secondhand clothing is one of the hottest gigs and it's not slowing down. This means more players and more buyers and the old rules you've been playing with won't matter.
Knowing this, I still try to improve every week on not just my process but my sourcing. If the thrift stores are changing with the environment, it's imperative that resellers do the same.
I'd really love to hear what you guys have to say about this one, comment below.
I have two observations on this one. I have been thrift shopping since the 90s to save money and just started reselling, and the cost increase we see now is not something that’s out of line with historical price increases, ie it seems like it’s gotten more expensive as everything else has too. With only a couple of exceptions. And luckily, the people at my local Goodwills/bins have all been really supportive of my reselling. Their aim as a non-profit is to help people get on their feet and help disabled people to work. I’ve told them how I’m reselling because I have a disability and need to take control of my life and career and told them that they’re helping me too. Honestly, I’ve had more problems with more aggressive resellers unfortunately. And I agree with you on the need for people to stop listing prices and taping.
What kind of problems are you having with aggressive sellers Lisa?
There’s a lot left out here, how like resellers don’t make 100% profit off items. They’ve already paid the thrift store the money, so what does it matter what they do with it after?
Thrift stores, even small ones, will throw out stuff they don’t want. Even if it’s good stuff. There’s a whole channel about a guy that lives in the middle of nowhere and even his town’s little church thrift store trashes perfectly good stuff.
If goodwill can’t sell something, it goes to their outlets for literally cents. And then if it can’t sell in an outlet it goes to a dump.
So, what? Thrift stores are feeling so threatened by a college student or something trying to make side cash that they’d rather trash things that people donated out of the goodness of their hearts? It’s frankly disgusting.
Thank you for your analysis. I wanted to add that there’s probably more reasons why big thrift stores are increasing price. I’m not a business expert but they also have to consider increasing worker wages (biggest overhead), rent, taxes and just overall inflation. I don’t believe they will ever be (or close to) out of donations, judging from what GW does with extra donations after the bins.
Most thrift stores are “non-profit” organizations that operate under 501c3 rules that are different from for profit companies. Most normal business costs don’t apply to them. As for the extra donations that they dispose, they’re mainly all items that are tattered, wet or simply not sellable. That’s why you’ll rarely find clothes in those conditions at Goodwills.
Thanks for the analysis! I’m really enjoying your site.
I have been reselling online since 2013, but only made a serious effort starting last year and made $25k in sales between eBay and Etsy. Of that, none of the items I sold were from thrift stores. There are lots of other places to get stuff to resell!
One recommendation I’d have for anyone looking to source clothes in bulk would be to attend a storage auction in your area and introduce yourself to the local storage auction buying community. Many of them buy units specifically for antiques, furniture, tools and collectibles but THROW AWAY every item of clothing.
I’ve never been to a storage auction but I do enjoy watching the dramatized version of them on tv! But seriously I need to try it.
I’ve been to several thrift stores that are not Goodwill who have told me they are actually turning away clothes donations because they have more than they can pallet up to sell or trash. Meanwhile their overpriced out of season items sit on their shelves in an attempt to make the same money as a reseller does off of items. They are ill equipped. Reselling is about more than putting something on a hanger and waiting. More time is put into it, cleaning, photographing and marketing to a bigger audience. IMO, many thrift stores want that something ($$$) for nothing. That seems a little greedy.
Although this article addresses thrift stores in general, I’m really alluding to the big boys (goodwill, salvation, savers…). They’re the one’s that actually have a long term game plan for what’s going to happen next. Our job is to predict it and act accordingly.