Buying and selling used goods is a time-honored part of commerce. From roadside flea markets to urban consignment stores, resale has traditionally been a small, but consistent piece of the larger economic pie.
But that slice is getting bigger. According to a recent article in Bloomberg Businessweek, selling used items is a $9 billion a year industry. By 2015, that yearly revenue is expected to jump to $13 billion.
A few converging forces seem to be at play in the resale boom.
First, consumers are looking for value now more than ever, and buying used delivers that value. The difference between retail and resale prices for the approximately the same item can be wide and shoppers notice.
To illustrate just how significant the savings can be, a quick search on eBay at the time of this writing shows 34 listings for used 42-inch Vizio brand LCD TVs. The average price of $310 is $219 less than new ones from the manufacturer’s website. Amazon lists 68 used editions of the new Steve Jobs biography by Walter Isaacson. At $12.39 for the least expensive, that’s $5.10 cheaper than buying it new.
Buying Used Online
Sites like Amazon, eBay and Craigslist offer used items and bring virtual flea markets to our fingertips 24/7, as do the online sites of charitable thrift stores like Shopgoodwill.com. Buyers and sellers are connected in ways that weren't conceivable just a generation ago. With countless choices, mobile access, e-mail alerts when specific products are listed and discounts on delivery, buying used is new again.
Sites that offer buyer-protection services and secure, nearly universal payment options like PayPal are removing some of the risk associated with buying used. They are helping to polish resale’s less-than-glamorous backroom beginnings.
As it becomes an even more protected online activity, resale will shedding its fringe status and become an even more mainstream part of commerce.
Buying Used in Brick-and-Mortar Stores
Longtime brick-and-mortar resellers are seeing a boom in business, too.
Clothing reseller Buffalo Exchange began operations in a 450-square-foot shop in 1974. Today, the chain has more than 700 employees spread across 43 stores in 15 states. In 2010, its annual revenue was $64.4 million.
Other clothing resellers like Crossroads Trading Co. and sporting goods resellers like Play It Again Sports are also reporting solid revenue growth. Crossroads’ 27 stores pulled in nearly $20 million in sales in 2010. At Play It Again Sports, the sale of used sporting equipment accounts for about 30 percent of the revenue and business was up 15 percent last year.
Goodwill Industries, the charity synonymous with thrift-center shopping, operates 2,500 not-for-profit stores across the United States. Stores have evolved from small out-of-the-way shops to sparkling mega-centers complete with streamlined layouts, loyalty programs and cafes. In 2010, Goodwill’s cumulative store revenue was a staggering $2.69 billion.
Buying Used and Your Business
Business owners can benefit a few different ways by better understanding the secondhand market.
First, traditional retailers are seeing more foot traffic in their stores from customers armed with mobile devices. Comparison shopping is immediate when customers use web resources from across the globe, and it often includes price comparisons between new and used merchandise. Apps for smartphones even let shoppers scan product bar codes to find least expensive option instantly.
When you recognize the ability of buyers to connect with sellers anywhere at any time, it can inform your pricing, customer-service decisions and advertising opportunities.
Second, business owners may want to consider getting in on the boom in resale themselves. Mixing new and used merchandise can work well in many industries and attract a whole new buyer demographic. Buyers introduced to a business through less expensive used merchandise can become loyal customers and graduate to higher-priced new items later.
Finally, businesses can support resale charities by donating unsold surplus or used items locally. It’s great PR, it frees up inventory space and, for qualified charities, the donations are a tax write-off, too.
Challenges for Buyers and Sellers
Of course, buying used means challenges for buyers and sellers. Shoppers often have to dig a bit to find a deal, as opposed to the ordered shelves of new products that we’re all used to. It also takes a bit of patience and creativity. Consumers have to be more diligent as they mine different online and offline sources to find just what they’re looking for.
Sellers must be more conscious of what they sell—describing items accurately, pricing them competitively and creating clear return and exchange policies. Changing inventory, fluctuating prices and constant new competition from large and small sellers all conspire to change the traditional selling model.
Despite these challenges, buying and selling used goods is surging and all signs point to its durability as a growing economic force. Cost-conscious consumers and a deep pool of quality used products from a wide range of eager resellers have created a symbiotic relationship that will continue to fill store shelves and virtual carts for years to come.
How have you taken advantage of this burgeoning market—as a buyer or a seller?
Kentin Waits is a freelance writer and marketing specialist in Portland, Oregon. His work has been featured in US Airways magazine and top-rated blogs such as Wise Bread, the Consumerist and MSN SmartMoney. When he's not writing, Waits runs a small online antiques business.