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Single Store & Multi-store Consignment/Resale Pricing Guides: Why Both?

Both Liberty by Resaleword and SimpleConsign by Traxia, the two leading point of sale (POS) systems in the resale and consignment industry, now count store-centric pricing guides, among their many features.  These store-centered Pricing Guides, custom built by individual stores, greatly reduce the time spent pricing items for resale.  Pricing is a voracious time and money eater. They also insure more consistent and thus trusted prices, a boon to sales.

At the same, Resaleworld has been and Traxia will soon be offering NextGen’s pricing guides built on the pricing records of multiple stores throughout North America.  Why both?

Store centered systems can work for stores that have the time build and maintain their pricing guides, and that have a sufficient base of reasonably current and profitable sales upon which to build.  However, many, if not most, stores do not.  Their pricing data is too thin or is colored by poor pricing practices, e.g. automatic markdowns and employee pricing,  shown to result in under-pricing and inconsistent pricing respectfully.

While the vast majority of stores using the NextGen Pricing system do so for life, a small number opt to use the built-in Pricing Guide to build their own once they’ve entered a sufficient base of NextGen Prices upon which to build.

Square Consignment & Resale POS System

At last.  An elegant & inexpensive tool that allows Square to work for Consignment and resale stores: the Square Buying Portal.

Square is the most comprehensive free Point of Sale System in the U.S. and Canada with over 2 million businesses using it to manage and sell retail inventory online and off.  NextGen’s Pricing Tools are the most widely used by independent resale and consignment businesses, online and off, in the U.S. and Canada.

Marrying the two through the Square Buying Portal has given birth to the most cost effective resale point of sale system in North America.  Square users are now able to acquire women’s, children’s and men’s resale and consignment items swiftly, at the right price and at an ultra-low administrative cost.

NextGen “Right” Resale Price Determinants

The most Frequently asked questions we hear from resale business owners considering the use of one of the NextGen pricing tools are “How does NextGen arrive at the Prices suggested?  Are they based on known retail prices and/or resale prices for like items (item type and brand)?  Is demand considered?  Is condition factored in?    All good & logical questions and “All of the Above” is NextGen’s short and ready answer.

Most of NextGen’s “Right Price” suggestions are statistically based on the sales experience of resale stores from coast to coast participating in the pricing system’s development and continued operation.

Retail prices are principally used as a check on the “right” resale prices so derived.  Retail prices serve as the basis for suggested resale prices only in the absence of reliable data on the category and brand in NextGen’s database.  In so doing, NextGen applies resale/retail multipliers specific to the subject category and brand level.  Some categories and brands hold their value better than others.  The same holds true in the case of “vintage” apparel.  While widely known, high-level brands tend to hold value, most do not.

Resale prices from online sources are used to derive “right” resale prices only in the absence of both online retail and resale prices.

As a rule, the range in prices found for categories with high-price designer labels are too wide to arrive at suggested prices.  The only choice is to price the individual item in question based on the retail or resale price of that item or close match found online.  NextGen’s efficacious [Checkit] tool is designed to do this.

Baby Gear & Toys are a Competitive Advantage for Brick & Mortar Resale Stores

The online resale of children’s apparel continues to grow and draw business away from brick-and-mortar children’s resale shops.  But here’s the good news:  the online resale of children’s baby gear ( strollers, bassinets, pack n Plays…) and toy’s does not.   Herein lies a key to the survival and growth of Children’s resale shops  today: the reselling of toys and baby gear.

Unlike apparel and footwear, the packaging and shipping time and expense associated with the online sale of toys and gear is generally too high to manage profitably.   While there are some local online options, (e.g. Craigslist and social media trading groups), the unknown-stranger dimension of Craigslist buying and selling is a fear for many mom’s, and the reach of the trading groups is limited.

And while gently worn apparel and footwear is certainly a draw to value-conscious mom’s and grandmom’s, add toys and equipment to the mix and expect to see more Dad’s, Granddads and children.   Indeed, given that the demand for resale baby gear generally exceeds supply, a number of children’s stores supported  by NextGen do well renting baby gear as well.

Starting or growing your offering of toys and baby gear is well worth considering to cement your place in the dynamic world of children’s resale.

How can I save … my business?

The resale and consignment business has always been difficult, but the growing competition online is making it even tougher.  In the final analysis, it’s meaning fewer customers and sales.

What’s the answer?  While there is no one answer, one sure answer is to lower your operating costs, become more efficient.  And one sure way to do that is to reduce the amount of time being spent pricing items for resale.  The time spent buying or accepting items on consignment generally accounts for much if not most owner/staff time.

Navigating Google and other online shopping sites, piece by piece, is a voracious time and money eater.  NextGen’s Suggested Pricing and quick online [Checkit] features quickly pay for themselves, grow your profits, and may just save your business.

Automated Price Markdowns—a losing strategy

A common feature of the more established point of sale systems geared for the consignment and resale industry are automatic price markdowns.  Percentage markdowns can be set at pre-determined intervals (e.g. 30, 60, 90 days).   Markdown Tags indicate both the date of the price reduction and the new price. Then, when an item sold, the sales clerk is not required to change the price at the register as any price markdown is recognized when the price tag is scanned.  This means faster sales transactions and improved accuracy.

It also means slower inventory turnover and thus less sales revenue according to NextGen’s limited data to-date and related reports from NextGen clients having moved from automated markdowns to NextGen Pricing,   This has been born out by studies  in the retail sector.

Whether actively promoted or not, if markdowns are near-continuous, regular shoppers become accustomed to the process. This not only increases off-price demand, but also can decrease full-price sales. As some retailers assume ever more aggressive markdown strategies, the net effect is a serious erosion of price and more importantly margin much earlier in the product’s lifecycle. Promotions are one of the reasons commonly given for Kmart’s near demise. It has been estimated that some retailers actually sell less than ten percent of their products at full price – their customers have been trained well. White Paper: Managing Markdowns: Why Prevention Is Better Than The Optimization Cure

Online Price-checking Imperative

NextGen’s value proposition lies typically in the user’s ability to avoid the time and risk involved in setting prices based on retail and resale prices found online.   However, in a few cases online price checking makes sense, and the NextGen System’s [Checkit] function is designed to expedite the process.

  1. Top Brand prices. Designer –brand Children’s and particularly Women’s  apparel, footwear, jewelry and accessories sell for wide-ranging prices, e.g. a child’s fashion boot prices for a Burberry may range from just under $100 to over $600, a women’s handbag from around $200 to more than $2,500.  These ranges are much too large to derive reliable suggested prices.  Using the checkit button to view retail and resale prices for items in the same category, brand and like descriptors(key words ) supports a more well-founded pricing.
  2. The prices for selected equipment and large toys, online and off, can drop sharply for short periods of time—sometimes longer–as retailers use them to drive traffic.  For this reason, even for categories where the system shows suggested prices,  it can be worth a click of the checkit button before committing to a suggested price.
  3. In addition to brand, suggested prices for smaller toys are lumped into categories defined by size, what they are made of(cloth, metal, plastic, …, ), and whether they are electronic. These suggested prices are built for speed.   Using the descriptors(key words) to name or describe a particular toy and the [CheckIt button] permits a more refined pricing referent… time permitting!

Keeping Track of the Risen & Fallen Women’s & Children’s Brands

Several years ago the number of brands appearing in the NextGen Women’s and Children’s Pricing Systems numbered just over 4,000 each.  Today the number is triple that.  The growth in number reflects New brands being introduced continually as manufacturer’s, wholesaler’s and retailers create new labels for new products and to keep the identities of existing products fresh.

The growth also reflects obsolete brands–those associated with discontinued products and those replaced with fresh brand names.  NextGen continues to show obsolete brands (connoted with a trailing X) to alert buyers and inform the buying/consigning decision.  As a rule, obsolete brands should not be purchased or consigned for resale as they often mark apparel that is out-of-style or at least out-of-favor among brand-conscious customers.  If the decision is made to purchase an item, the NextGen  Buy/Consign and resale prices suggested in the NextGen Pricing System drop to the lowest level.  Carrying too many obsolete brands can tarnish a Resale store’s reputation.

Off-Brand Pricing

Since NextGen first built its Children’s Pricing System in 2011, the number of children’s off- brands and no-name brands has increased dramatically.  So much so, that NextGen has had to add a “bottom” brand level and corresponding resale pricing specific to this group.

In 2011, we would never have imagined apparel being offered at such unforgivably low prices.   Despite numerous media accounts of overseas factories employing children in 19-to-20-hour shifts, often for seven days a week, for wages as low as 6 ½ cents/hour to manufacture it, this clothing and footwear continues to find its way onto our sales floors in the U.S. and Canada.