Monthly Archives: August 2016
NextGen Resale and Consignment is a service bureau providing know-how, software and support to owners of resale and consignment shops. NextGen has grown from supporting stores selling used children’s apparel, toys and equipment to stores selling used juniors and women’s apparel and accessories.
NextGen clients buy outright and accept items on consignment. They sell new merchandise and used. All are brick and mortar operations; a small number sell on-line. Some have multiple shops, most only one. All require responsive how-to support as well as technical support. All utilize NextGen’s pricing system to keep prices current, and save time spent on buying, pricing and related training. All welcome as many features as they can get.
Initially, NextGen contracted with one of the few POS vendors supporting both consignment and buy-outright operations to customize its offering by building in NextGen’s buying/pricing application. In the end, the vendor was unable to produce, and NextGen had to forego its investment and renew its search—this time in a more diligent fashion. After an exhaustive and systematic review, we found Liberty 4, by Resaleworld. It was, is, and remains the only software that satisfies the essential demands of our varied clients. Specifically,
- First and foremost, capable of seamlessly delivering our off-line and on-line women’s, children’s and juniors pricing system
- Full-featured consignment as well as buy-outright modes—clients are increasingly using both
- Fully supports the acquisition and sale of new merchandise as well as used
- Supports on-line as well as off-line sales
- Available for purchase and installation, or on a monthly subscription basis as an internet service
- Supports multiple locations via a private network or the cloud.
- True ‘on-call’ technical support—not the as-available’ technical support characteristic of the little POS vendors that dot the resale & consignment software landscape.
- Lots of features—the most of any POS software in the resale industry
The NextGen Pricing System suggests the best price for an item, specifically, the price at which an item can be expected to sell within 75 days. Initially, NextGen obtained these data from a limited number of stores around the country. But in the 2 yrs since, the data base has grown to include stores in most states and provinces in North America, most of which had been in operation for years before procuring a Nextgen Pricing System. The addition of these stores has allowed Nextgen to examine prices, controlling for area income levels and competition.
What have we learned? Far more stores under-price than over-price
In the vast majority of stores, prices fall short, often far short, of the prices at which the same items are selling in markets with like incomes and competitive situations.
Why do stores tend to under-price? The fear that higher prices will turn away buyers
Underlying this fear is the assumption that buyer decisions are based on price more than value. This is to say that buyer decisions are driven more by item-specific price ceilings, i.e., “I would never pay more than ten dollars for a pair of sneakers” than on Value, i.e., I would never pay more than $10 for a pair of Converse” sneakers.”
Is the fear justified? No
While the ‘price ceiling” mentality may be common among thrift shop customers, our analysis clearly demonstrates that it is the ”Value” mindset that reigns in better consignment and resale shops. Simply put: Customers pay more for better brands than lesser brands.
Give our customers credit. They are value conscious and knowledgeable. Even those who may not have been in times past, are now, thanks to Google and other internet shopping and price-comparison sites—accessible at the press of their smart phone buttons.
What’s to be gained by raising under-prices? Customers, Sales and Profits.
Right pricing is not what the market will bear, but what the market will embrace, as manifest in timely sales. Dollar sales will increase. Margins—bottom-line profits—will likewise increase. Item sales may not, but should not decline.
Raising the price of under-priced items allows a corresponding increase in the amounts paid for these items. To get better brands , we must pay for them. The more we pay, the more we get. Right pricing is Fair pricing meaning fair to seller/consignor as well as buyer. In the end, it’s a win-win-win. The sellers earns more, we owners earn more, and buyers have access to valued items they would not otherwise see.
The Good news? While under-prices cannot be abruptly changed for fear of alienating longstanding customers, prices can be nudged up (optimized) gradually and imperceptibly over a number of years. Clients use the NextGen Pricing system to manage these changes.