80% of Thrift Resale Business Comes from 20% of the Customers
Professional resellers spend more money more often than any other type of customer.
If you are a contractor, Home Depot, Lowe’s, Menards, you name it, they love you. They want you to know they love you. They have perks and benefits to get you to visit them first.
O’Reilly automotive gives pro mechanics a lot better deal than I get. I might buy a headlight, some oil, and car wax in a year. A mechanic will spend more than that in a day.
When you think about it, almost every business takes special care of their best customers. Even the local doughnut shop my wife stops at for 100+ people every two weeks gives her a break on the price and loads them up for her.
It’s been said that 80% of sales come from 20% of customers. In thrift that’s resellers.
Who are they?
They are micro to small business people. They search aisles every day looking for things with enough value to sell online for a decent markup. It’s work. Often solitary work.
They make money because they have a narrow, deep understanding of a few categories. They know more than the generalists that work at a thrift store will ever know about their area of expertise. Good for them for taking a base of knowledge and earning a living from it.
In thrift, with few exceptions, professional resellers are just another customer. A few employees might know their name and a little about them, but that’s about it.
There are arguments that all customers should be treated the same all the time. While that’s wonderful sediment it isn’t as fair as it may sound on the surface. As noted above it isn’t how retailers that cater to individuals and professionals work. It may not be the best formula for business.
Why they are important
If I quit shopping at Home Depot tomorrow they would not notice. The few hundred a year I spend doesn’t mean much by itself. If a contractor spending thousands on each remodeling job disappeared it would matter. Lose or gain a few of those and it would matter a lot.
Who really begrudges the pro contractor their perks?
It works much the same in thrift. Those independent online reselling professionals move the needle one way or the other. I dare say marketing to and providing reseller centric programs can be a competitive advantage.
Their growing presence shows up in the numbers, especially this year.
Shopify: GMV for the second quarter was $30.1 billion, an increase of $16.3 billion, or 119%, over the second quarter of 2019.
eBay: Gross Merchandise Volume of $27.1 billion, up 26% on an as-reported basis, over the second quarter of 2019.
Ways to engage
Make it OK. It’s easy to have a love-hate relationship with professional resellers, they find value store pricers missed.
Store employees know who they are, there are simple ways to recognize and appreciate them.
Pro buyers normally get volume discounts or rebates. How that can work in thrift varies a lot depending on available technology. It can be as simple as $100 Thursday’s, all single purchases over $100 get X discount.
Nonprofit thrift is almost universally dedicated to social causes built around improving the situation of community members. Offering business fundamentals training, providing ways to save on supplies, finding local experts on eBay and other platforms to hold classes. The list goes on.
What better way to provide a hand up rather than a handout than to provide training and best practices for small business people. Nonprofit thrift should be well suited to such a venture.
Conclusion
Engaging and encouraging these small business people can positively impact communities and retail businesses.
About Me
I am a thrift and retail business expert located near Chicago. Using my twenty plus years of retail and seven-plus years of thrift retail experience to help small businesses grow and succeed.
You can also find me on LinkedIn, Medium, and my thrift reseller blog The Thrifter.
You might also be interested in my Thrift Merchandising ebook on Amazon. It’s about how to merchandise thrift stores more like traditional stores. It’s free with a Kindle Unlimited membership.
Thanks for reading,
Tim Gebauer, The Thrifter