I had a great conversation with a consignment shop manager when she visited me at the NFP where I volunteer. She mentioned her frustration that some of her staff were
spending 20 minutes looking up the value of an incoming item on the Internet.
And that most often, the resulting decision, after this 20-minute research, was only $5 higher than that staffer would have priced it without the crutch of the web surfing.
That started us discussing looking things up on the Internet to make sure the price you set is right. And how much time should truly be invested in it. And how often we should “go to the web to check the price.”
So, after my peer left and my stint on the sales floor was over, I tried a little experiment. I looked up an imaginary item and timed myself. It took me 7 minutes, but that’s because I was timing myself, and didn’t stop off at an interesting site that wasn’t quite what I was looking for, nor did I daydream about the red leather jacket I ran across while looking for something different. And I resisted the lure of checking my FB page or anything else…which requires super-human impulse control. Had I been casually looking this up, it might well have taken me 20 minutes.
Back to that store manager’s concern.Twenty minutes of staff time to make $5 gross more.
If the shop split is 50-50, and if the item does indeed sell for $5 more than the first price the staffer considered, the shop makes $2.50 more. If the shop operates on a 33% profit margin, the business just made 75 cents on that employee’s investment of 20 minutes. I think we can all agree that another 20-minute task would have been a better choice, monetarily speaking.
Now we’re not talking about checking to make sure something doesn’t have a recall on it. And we’re not talking about researching things we really haven’t got a clue on. And by all means, if you receive an item out of your expertise, you’ll want to spend some time investigating it.
And then there’s the whole other issue of comparative value. It’s on several web sites for an average of $X. Does that mean it’s worth $X in my shop, in my marketplace, to my clientele? Your experience will tell you whether it’s worth more, or less. You know it will. So you see, all that research is simply a starting point for your decision-making. So maybe you could be gathering information that’s not as valuable as the time spent.
How do YOU decide when something is worth the time to “comparison-shop” on the web?
How do you communicate these guidelines to your intake staff? Do you set a time limit on this research? How often do you rely on the web to help you price…and how do you then tailor on-line pricing to your specific situation?
The young lady photo is from the University of Florida.
Auntie Kate The Resale Expert 
Great blog entry, Kate! I need to work with my employees on this a little more. I think they are starting to develop good instincts but that does take time. And then, it takes more time for them to realize they HAVE good instincts and should just go with that! 🙂
Kate…thanks for the link. Good ideas. We do look up values of designer bags and shoes plus the retail on Chanel, Hermes, some newer St John, etc. Other items we are spend any time on. I forgot which NARTS conference speaker commented that obsessing over pricing is counter-productive. Use your instincts to price knowing that some things may be a little high and others too low…it all works out in the end.
And a few UNDER-priced items are worth their weight in GOLD as far as word-of-mouth goes. But of course, we “seasoned” shop owners know that (or have learned it, like me, by default!)
My name is Karen. I opened a consignments shop in Port Angeles, Wa. on Feb.23,2010. Things seem to be going quite well. I purchased the wonderful manual and many other books from Kate.
One thing I would like to know is where shopkeepers are checking prices. Like I have had several different kinds of fur coats brought in. The owners don’t remember what kind they are so it’s been hard to price. Any ideas on how to do that?
I do standard pricing for like t-shirts, blouses, slacks. If there was a web site I could get a list of most popular name brands on those, then I believe I would beable to change my pricing and price according to name brands. I know most all teens.
Hi Karen, Just a thought: To learn about furs, there’s a link on my womenswear page at TGtbT.com about how furs are created which is very helpful. Look under the section “Learn about your Merchandise”…I think 😉 http://tgtbt.com/womenswear.htm
I sometimes find myself researching ONE thing way too long & it is a total waste of time. I am now tending to stick to items that I am familiar with so that even if I have to do a little research it won’t take me too long.
Interesting, Kate. I think we can get too anal retentive on the price thing. I might be wrong, but perceived value is the name of the gane. Your thoughts?
Regards.
A~
If it is something we’ve had in that is similar, I decide if its in better condition or not, look up the price it sold for and adjust accordingly. If it looks vintage, antique, or just plain weird, I have to look it up — I consider this part of educating myself. First I start with ebay sales, then check out specialty websites about the item (replacements.com for dishes, for example). If I see markings, I go to the website of the manufacturer. If I see the price new, usually mark it to sell at the shop for about half that price. -Linda
Thank you for this, Kate. It really is something good to think about.
I do go online and research prices of new incoming items, but only if its something totally new to the store. I have a spreadsheet that I punch prices into so its easy to look up the brand, categories (mens, womens, etc), type (Jeans, top, shoes, etc) then the Starting price along with a mark down price… these are just my starting points, I take the price on the spreadsheet and then figure in the condition of the item along with how fast similar items have sold recently and use my judgement for the final pricing.
Most items I can price from memory now, but the spreadsheet is available for a quick check and if its not on the list, then I look it up (if I have a spare minute) or set it aside until Im done getting everything else processed.