Reporters mass outside my office, thrusting their microphones and notepads and e-mail messages under my nose:
- Is resale feeling the pinch of inflation?
- You consignment shops deal with folks on the fringes of economic security, don’t you? What are you experiencing now as times get worse?
- Are you seeing a downturn in shoppers?
- Are donations-only thrift shops hurting because people are holding on to things?
- So when will resale and consignment shops go out of business?
- Can resale survive a recession?
Can resale survive a recession? Short of giving these folks a history lesson on the oil crisis in 1973, the gas lines of 1979, the early 1980s recession and the late 1980s recession (you ain’t lived til you see the DowJones lose over 22% of its “value” in one day…greater than The Great Depression) all I can say is
Whether it’s boom or bust, resale always profits. When times are “good”…shoppers SHOP. When times are “bad”….savers save. And since ALL of us are a little bit of both shopper and saver, we’re all still in the market for resale merchandise and services!
My printer, who spends his time leaning over the click-clack of his presses brooding on the economy, says we’re heading for The Greater Depression. Yet, in the last year or so, he’s moved to much larger quarters, tiled the entire place with McMansion-grade tiles, and seems not to be losing any weight. If there is a recession, you’d never know it by him.
So, will resale suffer? Sure, gas costs more. Sure, people will be watching their expenditures (hah!) carefully. Does all of this mean doom and gloom for the secondhand industry?
Nope. Nope. And nope.
First reason for “nope”: Where else can smart shoppers get quality for less? As shoppers of the mid- to-upper echelons realize that their money won’t go as far as it used to “new” they are ripe for discovering resale. There’s many a sensible consumer out there who used to buy Ralph Lauren Black Label new who’d rather buy it gently-used at a class-act resale or consignment shop than have to stoop to buy Lauren Jeans Co. new. The D&G aficionada doesn’t become a Isaac Mizrahi for Target® customer.
Second reason for “nope, resale will NOT suffer”: More gently-used goods will come onto the marketplace rather than accumulate in cupboards and closets. Faced with a ballooning mortgage payment or grocery bill, how many women could seriously resist offloading the 4th or 5th pair of Jimmy Choo’s still in their box on the top shelf of her closet or the Chelsea crib that’s languishing in the attic. More good stuff coming into resale and consignment shops means more stuff for the mall-refugees (see Reason 1) to buy!
Third reason for “nope”: The harder it gets for top-heavy national chains to offer decent service and ambiance to their clientele, the more the small resaler business can shine like a diamond in the jar of CZs. I mean, how easy is it NOW to find a clerk at a register to take your money…yet alone a true “sales associate” to go get you the other size in those pants or help you find a top to go with? How much more schlock can Macy’s shove on a rack and mark 75% off…and how many more shoppers will turn away in disgust at the lowered quality, bargain-basement ambiance and fashion-for-the-huddled masses look? These ex-new shoppers are ripe for the picking, for the smart resale shopkeeper (or SRS as we like to call ourselves!)
Now, of course, all of this doesn’t mean the sharp resale shopkeeper sits back and waits for people to “discover” her shop. No indeed. Unless a well-aimed strategy is in place, those non-resale shoppers will not consider resale, will not find her shop, or will not grasp the concept in any meaningful way.
Recession means an opportunity for the SRS. I can see it every day in the growth of traffic on HowToConsign.com and on this blog as well. I can see it in the orders I receive for my Products for the Professional Resaler. So, you reporters out there: I have a terrific Burberry Prorsum jacket that’s probably your size…let me show it to you just over here… I’ll hold your mike while you try it on.
Auntie Kate The Resale Expert 
Hi Sue! Our forum for resale shopkeepers at http://TGtbT.com, which is called Sharing, is a great place to discuss such issues. Please join us if you’d like to talk about this…there’s even a search function so you can get a good picture of how shopkeepers have be faring over the years!
It is now sept 2010, How is everybody doing?
All of the post are quite interesting and very helpful. I am considering opening an consignment shop by April 1 of this year. The good thing is that I have been able to talk the owner of the building to come down on the rent. He has agreed to allow me to rent the space for a very reasonable fee. This will allow me to be able to cover the rent for 12 months – with my on savings, just incase things start out really slow. Also, all of the utilities are including in the rental fee. I have always wanted to open a boutique/consignment shop and I feel as though even with the economy at it’s state this is still a great opportunity for me. I would appreciate any advice that anyone has that may be beneficial to me as a new business.
Nicole Smith
Treasures in your Closet
Ewing NJ
Business for us has slowed down. It is still steady but definitely much slower than this time last year. We are hoping that with the coming of Spring, business will pick up. There has definitely been alot of the non-usual customers purchasing on our site. I believe that it is a reflection of our economy and everyone trying to save a buck.
Lourdes Gutierrez
Hand Me UP Resale Shop
Chicago, IL
Interesting, Lourdes. What steps have you taken to improve your eBay business?
It’s been almost 6 months now since this thread started so it would be interesting to know how everyone is doing in this sour economy. Most of the posts here say that things are great but an honest update would be interesting.
I agree with most of Kates original points except to say that this particular downturn is different from others in our lifetime. Why? Simply because when people see their home equity disappear (the largest part of most peoples net worth) they feel poorer! And the fact is that they are poorer! No more, or much less, equity to tap to payoff credit cards and other loans.
Why is this important to us in the resale industry? Well, lets just say that when one feels poorer we spend LESS and yes, that means less money for our favorite local resale shop in many cases!
My shop sales in CA YTD are flat over 2007. And when one considers that small businesses are dropping like flies here in my city I can’t complain!
How are you doing….
As a fairly “new” consignment store owner in California (about 21 months old)….. I was worried that it would be more difficult than ever to grow a business in a recession. Even a resale businesss. I am pleased to say that I was wrong. My store has been growing and booming and it feels great!
Whether this is a recession or not, its definetly a time for opportunity! If I can grow and succeed in this resale business when times are tough, I am so looking forward to when it gets back to being good for everyone!
Thank you Kate for putting into words what so many have been thinking……….
One other thought I would like to add (being the West Coast Granola type that I am…..) is that today, something that takes 2nd place in the news is Global Warming, and that we all have to take responsibility for our actions. What I believe this means to the shopper is simply …this is the Smart way to remain part of our vibrant society. We can and will make changes to how we live; from shopping bags to what is in the shopping bags. Recycling is not only smart, it is becoming ‘cool’…just ask someone in high school.
I always thought that the resale business could do well in a recession but so far not true for us. We have a successful shop in CA in an area where the real estate values have been hit pretty hard and our business is off sharply the last 90 days.
We have been in business for 5 years and this is the first recession we’ve had since we opened. We have a comprehensive marketing plan in place that we prepare annually and this year we made some changes in anticipation of a slowdown. But so far, the results have been poor. So, time will how our consignment business will be affected by the recession but my advice is do not assume you will survive a recession without some serious evaluation of your marketing plans and promotion. And, yes, we are in a recession even though some still deny it. Just look at the cost of food, gas, disappearing home equity, etc……….
How right you are Kate. We’re seeing a lot of new faces lately.
We specialize in western wear and used to have a select group of customers/consignors that dressed western all the time. Now we’re seeing a lot of grown-up former yuppies that are discovering western attire.
A big surprise for us has been the number of teen to mid-twenty age guys that have “discovered” pearl snap shirts. Fifteen years ago, I couldn’t give them away because they were “grandpa” shirts. Now they are one of my biggest sellers. It doesn’t hurt that every other celebrity and rock star is wearing pearl snaps. I even had buyers from “Friday Night Lights” in the store buying for the characters on the show!
If January/February sales are any indication of our performance during the “recession,” I’m looking forward to a stellar year.
Donna King
Western Wear Exchange
Fort Worth, Texas
A nice refreshing take on the future (and past) of resale. I live in Canada, where a recession is not looming (yet) and the city I live in is booming right now. It’s comforting to know that a resale shop can prosper in either situation.
Exactly! Way to go, Kate!
I’ve been seeing lots of new customers in the months since last Halloween. These are regular folks that are just budget-conscious, but they don’t want the poor quality available for those budget prices. They come to my resale & consignment store and can fill their craving for higher-end, superior quality gently-used items without breaking the bank. It’s a win-win!
Thanks for putting it all in words, Kate!
Sincerely,
Tara Bren
Owner
Born Again Resale & Consignment