Hi Robert,

I want to get your opinion about an idea I have for a new revenue stream.  My wife and I had a garage sale this weekend and I was surprised to see how fast our kids’ old clothing sold.  Our Garage Sales customers were snapping up those clothes quickly; most of them were buying several pieces each.  This got me thinking about selling used clothing in a flea market setting.  I did some internet research and found a lot of companies that are selling used clothing in bales.  The price ranges from 30 cents to $1 per pound depending on the type.  It looks like these companies buying this stuff are exporting to the third world.  I wasn’t able to find much info about people selling locally. 

My plan would be to purchase bales of children’s clothing, sort out the garbage, launder whats left, sort by type then neatly fold everything.  I would also think there would be a small percentage of expensive clothing in good condition that I could sell through other channels.  I might even send those to consignment stores.  I think the clothes would cost me about 25 cents per piece and I think I could sell them for $1-$3 each in the flea market.  Based on how my garage sale went and that we are talking about the same type of customer, I think I could sell a few hundred dollars worth of clothing in a day.  My whole strategy is to win customers based on my pricing.  Plus, the flea market I would use does not have anyone selling clothing near this price point and they have a lot of traffic.  If this all worked, I would hire someone to run the flea market booth(s) so I could concentrate on other areas of my business. 

The fact that I wasn’t able to find info on the internet about people selling used clothes domestically makes me think I am missing something.  Surely, I’m not the first person to come up with this idea.  There must be a reason people only export, other than the obvious, which is that these clothes are mostly junk.  However, it seems people will buy this junk for the right price.  Given your experience in the closeout/salvage industry, have you heard of anyone that has been successful with this type of business?  This is all in the early ideation phase so I am looking for validation that it is a good or bad idea.  Thanks Robert.

David

My Response: David, sounds like a great idea! Honestly, where can you a better markup? We have purchased used apparel by the bail and through a few methods described below. We re-wholesaled apparel to ebay sellers, specifically children’s apparel that we bought for a nickel per piece. We had no problem selling at .50-.70 in small lots of one hundred pieces at a time.

I really do not see how you can go wrong selling used apparel at your flea market. There are thousands of people selling used apparel at flea markets nationwide! Sourcing is a critical area, but I will tell you that most of the liquidation companies advertising used apparel are getting the clothing from one source….

BestUsedClothing.com and ABCloseouts.com (Same Company) is one of the largest distributors of used apparel by the bale and container. There are hundreds of Brokers and Liquidation websites selling clothing that comes directly from this company!

As you stated in your email, exporters are buying containers of used apparel especially summer weight clothing and shipping to impoverished third world countries where even Walmart brands command a high dollar. It is not uncommon for a well connected exporter to drop a container at its destination only to immediately resell to end retailers [local] eagerly awaiting stock.

Used apparel wholesalers usually advertise three grades including A, B and C. Grade A being the best quality, the lower grades will have more holes, tears, buttons missing, stains and imperfections.

Can you make money buying used apparel (with the intent to resell?) from Yard Sales, Garage Sales, Flea Markets and Thrift Shops?

In addition to selling new or shelf pull apparel apparel overstocks on ebay or at flea markets we know of several large ebay power sellers who buy apparel for pennies on the dollar by making regular visits in their own hometown to thrift stores, garage sales etc finding name brand apparel in “gently used” or often new condition. Often apparel can be purchased for ten to twenty-five cents which will give you the opportunity to realize huge mark-ups!

1. Become a regular shopper at thrift stores in your local area. Inquire about
   large quantity discounts for purchasing. Often thrift stores are “at capacity” with apparel and your inquiry to purchase in larger quantities will be welcome.
2. When buying from thrift stores or garage sales only purchase higher end
   brand names. Make sure to research which brands sell the best on ebay
   and keep a list with you when you shop.
3. Focus your search for Jackets, Dresses and Jeans as these items have a higher perceived resell value on ebay or at flea markets
4. Visually inspect each item purchasing to make sure there are no holes, rips or stains.
5. If buying from Garage sales watch you local newspaper for specific sale
   times: If a garage sale advertises Saturday 8 Am – 3 PM show up at about
   30 minutes before they will be closing. At the end of the day bargains can
   be tremendous. Often people who hold garage sales are ready to almost
   give away merchandise at the end of the sale. Big bonus for you!
6. After making your purchases go home to inspect the apparel again. You will need to (in most cases) wash the apparel and perform “Wrinkle Removal” prior to reselling on ebay or at your flea market
7. Do not buy used apparel that is heavily worn or faded. Develop your own
   criteria for sourcing used apparel…If it is gently used you should have no
   problem reselling it.

Don’t have time to go out searching?

Advertise in your local newspaper stating you will buy gently used apparel. We have had great luck in running ads ongoing advertising to buy used clothing.  Specify clothing conditions and sizes. Include your phone number and prepare for a rush of people calling ready to deliver apparel to your door. Everyone can appreciate some extra money after cleaning out their closets!

Another great way to spread the word about buying gently used apparel is to run a free add on your local Craigslist.org website. We have attracted hundreds of people using this method…we love it because it does not cost a dime!
Be ready when people respond to your ad explaining your strict criteria for
apparel purchases. Be up front with people calling advising how much you are
willing to pay.

Remember that most people who respond to this type of offer were probably
going to donate the clothing. This is to your advantage obviously as people do
not make money donating…you are offering them cash!

Mystified by shipping out of the continental US? What about customs regulations? Merchandise seizures? Destination restrictions? It sounds as though you would benefit tremendously from a Freight Forwarder.

An international Freight Forwarder is an agent for the exporter (you) in moving cargo to an overseas destination. These agents are familiar with the import rules and regulations of foreign countries, the export regulations of the U.S. government, the methods of shipping, and the documents related to foreign trade. Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle air freight and the Federal Maritime Commission to handle ocean freight.

Freight forwarders assist exporters in preparing price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and their handling fees. They recommend the packing methods that will protect the merchandise during transit or can arrange to have the merchandise packed at the port or containerized. If the exporter prefers, freight forwarders can reserve the necessary space on a vessel, aircraft, train, or truck. The cost for their services is a legitimate export cost that should be included in the price charged to the customer (see Chapter 11 of the Basic Guide to Exporting for pricing information.).

Once the order is ready for shipment, freight forwarders should be review all documents to ensure that everything is in order. This is of particular importance with letter of credit payment terms. They may also prepare the bill of lading and any special required documentation. After shipment, they can route the documents to the seller, the buyer, or to a paying bank. Freight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs export documentation regulations. A customs broker is an individual or company that is licensed to transact customs business on behalf of others. Customs business is limited to those activities involving transactions related to the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed or collected; or the refund, rebate, or drawback thereof.

Finding a Local Freight Forwarder

Freight forwarders are located in most metropolitan areas. Yellow pages often have a freight forwarder, or transportation, heading. Additionally, the National Customs Brokers and Forwarders Association of America will provide exporters with information on their members. They can be reached at 1200 18th Street, NW, Suite 901,Washington, DC 20036, (202) 466-0222, or contact ncbfaa.org

Get Started with Importing!

I myself have exported large loads of apparel and worked closely with other exporters, freight brokers and foreign distributors selling thousands of dollars of closeout and used apparel worldwide.

How do you get started exporting? Well, first off plan on doing a lot of research. If you do not have contacts in other countries now you could benefit from a sales representative.

Get Started with Importing and Exporting!

Overseas, a sales representative is the equivalent of a manufacturer’s representative in the United States. The representative uses the company’s product literature and samples to present the product to potential buyers. A representative usually handles many complementary lines that do not conflict. The sales representative usually works on a commission basis, assumes no risk or responsibility, and is under contract for a definite period of time (renewable by mutual agreement). The contract defines territory, terms of sale, method of compensation, reasons and procedures for terminating the agreement, and other details. The sales representative may operate on either an exclusive or a nonexclusive basis.Exporting to Foreign Distributors

The foreign distributor is a merchant who purchases goods from a U.S. exporter (often at a substantial discount) and resells it for a profit. The foreign distributor generally provides support and service for the product, thus relieving the U.S. company of these responsibilities. The distributor usually carries an inventory of products and a sufficient supply of spare parts and also maintains adequate facilities and personnel for normal servicing operations. Distributors typically handle a range of non-conflicting but complementary products. End users do not usually buy from a distributor; they buy from retailers or dealers.

The terms and length of association between you (Exporter) and the foreign distributor are established by contract. Some exporters prefer to begin with a relatively short trial period and then extend the contract if the relationship proves satisfactory to both parties.

Exporting Direct to Foreign Retailers

You can also sell directly to foreign retailers, although in such transactions, products are generally limited to consumer lines. The growth of major retail chains in markets such as Canada and Japan has created new opportunities for this type of direct sale. This method relies mainly on traveling sales representatives who directly contact foreign retailers, although results might also be achieved by mailing catalogs, brochures, or other literature. The direct mail approach has the benefits of eliminating commissions, reducing traveling expenses, and reaching a broader audience. For optimal results, a firm that uses direct mail to reach foreign retailers should support it with other marketing activities.

American manufacturers with ties to major domestic retailers may also be able to use them to sell abroad. Many large American retailers maintain overseas buying offices and use these offices to sell abroad when practical.

Get Started with Importing!