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What Differentiates Resale Retail Franchises from other Business Concepts?

When we first began growing our roster of resale retail franchises in 1988 with Play It Again Sports®, the world of franchising looked much different than it does today.

The popularity of franchising has given rise to more than 3,400 franchise brands operating in the U.S. This not only gives consumers a plethora of options for where to take their business but also presents prospective franchisees numerous possibilities to open a business in their communities.

Virtually every industry and niche is represented under the umbrella of franchising. But, as you might imagine, there are stark differences among franchise opportunities.

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With that in mind, we want to explore what sets resale retail apart from other business concepts and other retail franchises in particular.

The Resale Retail Franchise Operating System

The resale franchise business model is built around a buy-and-sell value proposition for consumers. Whereas the vast majority of retail and other business concepts depend on a strictly transactional model where their customers buy products or services, resale thrives on an exchange of goods.

Resale retail businesses encourage their customers to bring in their used items, such as clothing, sports equipment or musical instruments, in exchange for cash or to trade in for both new and used products.

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By operating in this capacity, resale retail franchise owners develop a supply chain within their communities instead of depending on complex international supplier partnerships that can be impacted by trade agreements, weather, political instability and numerous other variables.

According to the Small Business Association, 36 percent of small businesses don’t have a website, let alone an online storefront. While ecommerce has been around for more than a decade, a significant number of businesses haven’t even started.

Among leading resale retail franchises, an ecommerce storefront is a substantial differentiator, helping franchisees market their brand and products while driving in-store traffic. Multiple Winmark brands, including Music Go Round®, Play It Again Sports and Style Encore®, have a strong digital footprint that creates a multi-channel experience for consumers, enabling them to shop whenever and wherever they want.

Environmental Impact of Resale Retail Franchises

Given resale retail’s buy-and-sell model, there is a positive environmental impact built into operating a resale franchise that the vast majority of other businesses cannot claim.

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Instead of discarding their gently used clothing or quality used sporting goods and instruments into the garbage, consumers can bring their items into a resale business to give the products new life in a new home. The goods are recirculated within the community, decreasing the number of items ending up in landfills and the number of brand-new items purchased from traditional retailers – pushing down the number of items that need to be produced in the first place.

Sustainability has become an increasingly important issue for consumers when they’re deciding where to shop and which businesses to support.

A study from Nielsen showed that more thanĀ 80 percent of consumers around the world strongly believe businesses should aid in improving the environment.

Meanwhile, three-fourths of millennials and Generation Z indicated they’d be willing to pay more for sustainable goods. Nowhere is sustainability more needed than in the retail industry, particularly clothing retailers. Textile waste accounts for 15 million tons of trash ending up in landfills or being incinerated.

In 2019, our five resale retail franchise brands purchased a cumulative total of almost 155 million units of clothing, toys, books, musical instruments and sports equipment.

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As the enormity of the fashion industry’s ecological footprint has become increasingly clear, consumers have turned to businesses that not only allow them to responsibly recycle their goods but also get a great deal when purchasing used items.

Recession Resilience of Resale Retail Franchises

When consumers are struggling, resale retail franchises play a critical role in providing shoppers access to high-quality products at significantly discounted prices.

Consumers don’t necessarily want to stop shopping during an economic downturn and instead think more critically about finding a bargain for the items they want and need. Moreover, once consumers start shopping at resale retail franchises, they are prone to continue frequenting them even after their financial circumstances have improved.

According to the National Association of Resale & Thrift Shops (NARTS), more than six in 10 respondents to a survey reported seeing an increase in sales during the second quarter of 2009 compared to the same time in 2008. In fact, they saw an average increase in sales of roughly 31 percent during that period.

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The Rapidly Growing Resale Industry

Another key differentiator of the resale retail sector is its rapid expansion compared to similar concepts, such as traditional retail.

The consumer demand for resale businesses has grown steadily over the past several years. The estimated annual revenue for stores selling used merchandise in the U.S. has reached over $17.5 billion as of 2020.

The resale clothing segment has fostered a sizable share of the momentum, as resale apparel has grown 21 times faster than the traditional clothing retail market over the past three years.

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The growth resale retail businesses have experienced can be attributed to a few of the features of the business model we mentioned above.

  • First, these businesses help consumers purchase high-quality products for far less money than they would spend at a traditional retailer – up to 70 percent off in many cases.
  • Second, consumers are still able to buy high-quality products they want during challenging economic circumstances.
  • Additionally, shoppers can feel good about their purchasing decisions because they’re recycling their items and avoiding contributing additional waste into landfills and incinerators.
  • Last, resale businesses have become a destination for finding unique finds that chic shoppers depend on to establish their own styles and stay trendy.

Why Franchising Might Be Right for You

Franchising has proven to be an effective model for growth that companies in a multitude of industries have pursued to help them scale their enterprises by allowing aspiring entrepreneurs to open their own businesses using the franchise’s trademarks, operating system and products or services.

Discover the franchise opportunities within Winmark’s family of resale retail brands by downloading our free franchise reports here!