Used Merchandise Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 12,400 used merchandise retailers in the US resell previously-owned goods, except for motor vehicles (autos, boats, motorcycles, recreational vehicles). Major revenue categories include used clothing, antiques, furniture, collectibles, books, and jewelry. Antiques are items over 100 years old. Collectibles may be old, but less than 100 years old. The industry includes permanent flea markets, but excludes pawn shops.
Variable Supply
Sources of supply for the used merchandise industry can vary and are often erratic.
More Resale Shoppers
More shoppers plan to frequent resale stores, as the used merchandise industry evolves and adopts features of the traditional retail model.
Industry size & Structure
The average used merchandise retailer operates out of a single location, employs 16 workers, and generates nearly $2 million annually.
- The used merchandise retail industry consists of about 12,400 firms that employ about 205,000 workers and generate $24.4 billion annually.
- The used merchandise industry is fragmented; the top 50 companies account for 33% of industry revenue.
- The industry includes chains, franchises, and independent operators.
- Large firms include Savers, Winmark (owns Once Upon a Child, Plato’s Closet, Play-It-Again Sports, Music Go Round, Style Encore), and Uptown Cheapskate.
- Large non-profit service organizations, such as Goodwill and the Salvation Army, operate used merchandise retail locations.
Industry Forecast
Used Merchandise Stores Industry Growth
Recent Developments
Nov 12, 2024 - Retail Sector Expands, Employment Up
- Economic activity in the services sector including the retail sector expanded in October 2024, according to the Services ISM Report on Business. The Services PMI registered 56% in October, up 1.1 percentage points from September, marking the fourth consecutive month of expansion. Of the 14 of the 18 services industries reporting growth in October, Retail Trade reported the fastest growth during the period. Employment by used merchandise retailers increased 2.1% in September 2024 year over year, according to the Bureau of Labor Statistics. Employment has grown about 13% since 2019, as the resale industry has grown rapidly driven by a combination of factors including consumers seeking sustainable shopping options and bargains. Average wages for nonsupervisory employees at used merchandise retailers climbed 4.7% in September 2024, reaching $16.52 per hour.
- A new study by the National Retail Federation (NRF) of the estimated impact of president-elect Donald Trump’s tariff proposals shows the tariffs could cost American consumers between $46 billion and $78 billion in spending power. The study looked at the impact of Trump’s proposed universal 10-20% tariff on imports from all countries and an additional tax on imports from China on six consumer product categories: apparel, toys, furniture, household appliances, footwear and travel goods. Per the study, consumers would pay $13.9 billion to $24 billion more for apparel, $8.5 billion to $13.1 more for furniture, and $6.4 billion to $10.9 billion more for household appliances with the proposed tariffs in place. The study showed the tariffs would have a “significant and detrimental impact” on the costs of a wide range of consumer products, in particular those products supplied primarily by China. US retailers would be unable to absorb the increased costs and would need to raise prices “higher than many consumers would be willing or able to pay.” According to Jonathan Gold, NRF vice president of supply chain and customs policy, “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices. A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.” Used merchandise stores may benefit if consumers seek alternatives to costly new products due to increased tariffs.
- Trends in the used merchandise market include an expanding number of traditional retailers collaborating with resale companies and partnerships with celebrities to promote and participate in events, according to a report in Chain Store Age. Dick’s Sporting Goods, for example, is growing its collaboration with online marketplace SidelineSwap, where it hosts in-store trade-in events for SidelineSwap to collect used sports goods from customers in exchange for Dick’s gift cards. Bloomingdales has also entered an omnichannel partnership with luxury resaler Rebag. The report also noted that resalers are adding “star power” to their promotional efforts through celebrity partnerships. Used furniture site Kaiyo sold 100 pieces of pre-owned furniture from Sonja Morgan, of “Real Housewifes of New York,” and singer Elton John partnered with eBay for a resale event benefiting the Elton John AIDS Foundation.
- According to a ThredUp report in the Wall Street Journal, the secondhand apparel market in the US was worth $43 billion in 2023, with an expected market growth of 11% a year on average through 2028. Even with the growing popularity of resale, the WSJ report says that sales growth has slowed recently for some resellers such as the RealReal, ThredUp, and Savers, which are growing slower than the overall market. While Goodwill has a steady supply of donations, online resellers such as ThredUp and the RealReal have sellers mail in or drop off goods, where they are processed and put online, an expensive process that can cut into profitability. Savers, a bricks-and-mortar reseller, is a more efficient reseller than Goodwill and the Salvation Army but can have challenges in procuring enough supplies of secondhand clothing to open new stores, according to the WSJ report.
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