Of all the content produced by SMCo Thrift, this topic is likely the one that can have the greatest, and most immediate, impact on the profitability of your thrift operation. Second only to an abundant supply of donations, pricing to value your donated items is vital to the growth of your organization.
Thrift Stores and Trail Mix
When my boys were toddlers, they always picked every M&M candy out of the trail mix at our house. I couldn’t blame them. It was the best, in their opinion.
Just like my boys eating trail mix, thrift shoppers come in and look for the best in your stores. Whether they are truly a shopper in need, or one just looking for a deal, they are still searching for the best.
A Tale of Two Stores
Store A line prices (e.g., all shirts are $4.00, all coats are $5.00) its donated items. Store A has the same shopper looking for the same great items. However the M&M’s picked out of Store A are only going to sell for the base price, no matter what. For example, consider a North Face ski jacket. Depending on the features, those usually retail for $200 or more. In store A that jacket is $5.00 because all coats are $5.00
Store B invests the time to look at each item and decide its worth. They use a price guide and consider brand, quality, and age. The M&M’s in Store B will generate the maximum amount possible to provide funding for the non-profit while still offering a good value to the customer. The North Face jacket in Store B is $34.99.
See the difference? Consider the opportunity you have to generate the maximum amount possible on every item in the store. How would it impact your bottom line?
“But I want my store to have better prices then the big box thrift store.”
Why? Every M&M is unique and no store has the same one. Feel free compete with the other stores on your base price for a base item. But the value of an M&M should be represented in its price. Even though customers might complain about the prices, they know they got a great deal on the North Face coat or any other M&M in your store. And if a customer is truly in need of a warm coat, there are plenty available at base price they can afford.
Pricing to Value
What kind of store will you be? Will you crank out more product at one price as fast possible, giving all of your profits away? Or will you recognize the value of every donation that has been entrusted to you?