How Do Resale Franchises Stack Up Against Other Business Concepts?

The days of everyday people needing a benefactor to purchase apparel by Burberry or Gucci – or a top-line guitar or road bicycle – are over. Thanks to the influx of resale franchises that provide discounts on merchandise, such as those under the Winmark Corporation umbrella – Once Upon A Child®, Plato’s Closet®, Style Encore®, Play It Again Sports® and Music Go Round® – more people are able to afford products by a wide range of brands, including those once only attainable by high-salary earners.

Because of this, resale is hot and it’s catching the attention of entrepreneurs in search of lucrative franchise opportunities. They see that, overall, the retail industry is performing well. They’re also taking notice of the resale category outperforming the rest of the retail industry.

Retail Franchises Show their Strength

When compared to other franchise concepts, retail is one of the strongest segments, according to the Franchise Business Economic Outlook for 2018, published by the International Franchise Association.

In 2018, retail sales are expected to have increased 4.7 percent – up from the 4.5 percent in 2017. Data for hiring and output is also expected to come in as healthy for 2018. However, the traditionally popular franchise sector – restaurants/food – has experienced sluggish growth, with quick-serve restaurant concepts performing only slightly better than full-serve and fast-casual franchise concepts.

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Growth in the automotive, business services, real estate, lodging and commercial and residential services sectors will not perform as well as other years or will not grow as robustly as hoped.

Resale Rules in Retail

A closer look at the resale sector, within the retail segment, also displays growth and strength. Winmark holds some of the largest market share in the category.

In fact, resale has outperformed the rest of the retail market for the last five years thanks to shifting consumer trends. Shopping habits and values of millennials and Generation Z – two extremely large consumer demographics – align with the resale model. Born out of the recession years starting in 2008, consumers who are age 37 and younger are interested in cost-effectiveness and environmental sustainability. They are also significantly influenced by social media and online reviews.

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Their shopping habits buck historic shopping trends when the U.S. economy is strong, as it is in 2018. Typically, when income levels and consumer confidence rise and unemployment drops, Americans tend to spend money on brand-new products. The first part has happened, but thanks to spending habits of America’s youngest consumers, there has also been a significant increase in the purchases of used products. Resale industry revenue continues to surge upward, with sales growing 3.5 percent since 2013 and reaching the $20 billion mark in 2018.

Conversely, when the economy performs poorly, causing low consumer confidence and higher unemployment rates, which leads to decreased spending by Americans, resale concepts thrive. However, this latest trend tells us that resale franchise owners don’t have to wait for a downturn in the economy to experience strong sales.

Winmark Brands Control the Market

Thanks to Winmark’s proven resale franchise model, Winmark’s brands have been able to capture large market share over the last 30 years.

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For example, Winmark offers gently used products to consumers at a 70 to 90 percent discount – making resale a go-to option for many consumers, not just millennials and Generation Z. Winmark also provides them with outlets for selling gently used items. The cash they receive is often used to purchase other merchandise at whichever Winmark store they sold to. It’s this cycle that appeals to consumers’ green sensibilities and the desire to own something nice.

By keeping clothes, musical instruments and gear, sporting goods and other products out of landfills, Winmark brands contribute significantly toward environmental sustainability. In a single year, resale concepts recycled 2 million tons of textiles that could have ended up in landfills.

Additionally, true to the franchise model, Winmark provides franchisees with strong brand recognition and ample support and training to help them become successful.

Contact us today to learn about resale franchise opportunities with Winmark Corporation’s brands.

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