women’s consignment software
Women’s Consignment Pricing – The Importance of Brand
According to Brand Keys the New York-based brand and customer loyalty research firm: since 2008 the importance of brand names has consistently increased, standing in 2012 at 29%–more than tripling in importance over four years. The more considered a purchase, the greater the role a strong brand plays in the decision making process, especially when it comes to fashion. Moreover, it can be expected to continue. According to Brand Keys’ latest Fashion Shopper Survey, the youngest fashion buyers (21-34 year olds) showed the strongest lift in brand importance. What’s more, it’s as true for leisure and casual apparel as for luxury apparel. The Survey shows, Nike and Hilfiger ranking right at the top along with Armani and Chanel in terms of importance in the purchasing decision.
In the 2012 Brand Keys Fashion Brand Index, the top spot goes to Ralph Lauren/Polo, followed by one’s favorite sports team, Armani and Nike with Versace and Chanel, tied for fifth place. I would argue that Brand is even more important to Consignment shoppers who are far more value conscious than the average shopper. Indeed, it is what NextGen has found, ….in spades!
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
As an owner of four women’s consignment shops, I have a lot of experience in this business. Twelve years ago, when I bought my first shop, I remember how concerned I was about how this all works. How do you price used merchandise at the “right” price? You have to walk a fine line when pricing—you want things to sell, but at the same time, keep your consignors happy.
You can spend long hours researching how to price specific brands and items. You have some knowledge of what the retail prices might be, and you can search the internet, but it’s incredibly time consuming. You can’t always find what you’re looking for–and even then, you’re looking at retail prices. You still have to decide how to use that information to price your merchandise. It’s scary because you know pricing is key! You have to price it right.
The Women’s Fashion Pricing System from NextGen is the answer–absolutely! It will tell you how to price every item you take in by brand–from Gap to Ann Taylor to Armani! This system tracks prices using inventory sales data from a select number of successful consignment shops over a period of two years. Suggested prices are updated at least once a year and include over 4000 brands. This system is designed to suggest the best price at which an item will sell to the mutual benefit of consignor and shop.
It will help you price every item you take in as you are entering it into the Liberty 4 POS program. No extra steps or work…it’s all right there! I’ll be saying this often–I wish this had been available when I started!
More to come.
The NextGen Pricing System suggests the best price for an item that 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 last 2 years, the data base has grown to include stores in most states and provinces in North America. As most of these stores have been in operation for years, their addition to the data base enables Nextgen to better examine pricing strategies relating to area income levels and competition.
What have we learned? Far more stores under-price than over-price1
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.” While the former mentality may be common among thrift shop customers, our analysis clearly demonstrates that it is the “Value” mindset that is prevalent in better consignment and resale shops, not the “Price” mindset. Simply put: Customers pay more for better brands than lesser brands.
Give your customers credit. They are value conscious and knowledgeable thanks to Google and other internet shopping and price-comparison sites. Always accessible at the press of a button on their smart phone.
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 while maintaining 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.
1 Certainly, these data could be skewed. Perhaps the over-pricers are gone, having priced themselves out of business. Or just maybe we’re missing the under-pricers who didn’t have sufficient margins to cover their costs of doing business. Let’s reasonably assume a bit of both.