Price Per Item VS Pieces Sold

Raising prices can increase sales, or not.

Photo by Adam on Unsplash

The trick to raising prices is to keep from alienating customers. Thrift customers in particular are very price sensitive. On top of that, many like to think everything was free. 

Even thrift has to adapt to the current realities of the higher cost of running a business. The apparent cost of a donated good hasn’t changed. The costs associated with getting an item to the sales floor and sold have.

In my operation, we have raised starting pay by $5 per hour in the past year and a half, on top of wage increases to keep longer-term employees' pay ahead of new staff. It’s a significant cost that has to come from somewhere. 

Side note: Our managers no longer spend half their time interviewing candidates and the other half training new hires.

Some areas like textiles are either rack priced or have specific guidelines for good/better/best. In those cases, management has some leverage on pricing. Rather than raising everything all at once, I find it best to work through departments. Men’s tops, then kids, then linens, and so on until you are around the store. If necessary, rinse and repeat. Small incremental changes can be the sweet spot. 

If you have a good POS system, closely watch the effect of each change. If the net is up, you win even with a few fewer pieces sold. Figuring out what items quit selling with a higher price is a big value clue. 

It’s harder in areas that require a value decision on almost every item. Furniture, housewares, games, puzzles, lighting, and so on. There are usually guidelines, but an individual producer has to make a final decision. 

In thrift, we don’t have an invoice from a supplier reflecting a higher cost that we simply pass along to the customer. 

This is one place where a lot of education is essential. It isn’t enough to ask producers to charge more, they need to know and understand why. For whatever reason, employees don’t always intuitively understand their pay comes through the cash register. 

At ReStore we have sold used basic top mount refrigerators for $200 for I don’t know how long. A couple of years ago you could find a new one on sale for around $400. Now the best price I can find is about $600 if it’s even in stock. So the new price is up 50% in two years but our used price had not moved. 

We took the bold move of changing the price to $220. A batch of five that came in sold just as fast for ten percent more, giving us an extra $100 for no extra work. 

We need to work our way up to $300. Moving that much all at once would have been difficult on employees that have to deal with customers. 

Customers that buy these are mostly landlords, they complained bitterly. They complained at the checkout as they were paying for them. I get it, for them, it’s simple math and the reason they shop thrift. Every dollar they pay for something is a dollar less in their pocket. Still, they know how much they cost new. 

One pain point is sales floor staff.

They are the ones that take the brunt of customer complaints. They are often talking to regular customers that they know well. They have to understand the why behind price increases. A few talking points can help. 

To be a sustainable business we have to adjust to the realities of the market. We already have on the expenses side, the bottom line dictates we adjust on the income side.

Some experimentation can be necessary.

We recently received a generous donation of new patio furniture. It’s lateish in the season for these, but still, it’s great stuff. We went out on the high end of our pricing structure (we use a percentage range of full retail) posted them on Facebook and buckled in. We sold about 15% at those prices, the best of the best of the donation. Then we ran a 25% off sale on them. They moved great. The thing is, the 25% off the price would have been our full price before. We pulled a little more value out of that donation that will help us cover those higher expenses. 

Thrift pricing really is part art, part science, part opinion, part customer relations.

Never lose sight of your top why for existing, funding an important cause. More importantly never let your staff lose sight of the why. 

This post is also available as a free downloadable PDF.

Thanks for reading!

Tim Gebauer - Thrift Merchant

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A quote:

Change is Inevitable - Progress is Optional Tony Robbins