The Impact of Wholesale

If you are considering how to maximize profits from your thrift operation and the value of your donated items, you may want to consider adding a wholesale component. Wholesale in some cases can add as much profit as one of your thrift stores!

You may be asking, how can wholesale be useful for my thrift operation or what up-front investment is required to add a wholesale component? We’d be happy to answer those for you today!

Adding Value: Lowering Costs & Increasing Throughput

Throughput is an important metric to evaluate the amount of product circulating in and out of your store. Normally your throughput outlets would be recycled items, retail sales, and trash, but wholesale provides a fourth outlet!

Wholesale adds value to your donated items. For instance, consider a shirt on your retail floor that hasn’t sold, wholesale allows you to put that shirt in as bale instead of throwing it away in the trash. With this, wholesale gives value to a shirt that would have cost you money by throwing it away. With trash being a large expense line item for many non-profits, making money from something that would have been trash has tremendous financial impact!

Investment Needed to Start a Wholesale Operation

The primary components needed for a wholesale operation include a baler, a forklift, warehouse space, and of course manpower. While all are expense items, a well running wholesale operation can allow you to quickly recoup your one-time fixed expenses and exceed your monthly expenditures meaning more profit!

When thinking of warehouse space, it’s important to note a few thousand square feet will suffice. You will not necessarily need a huge warehouse if you are consistently moving out your wholesale items. While a baler isn’t essential, the investment enables you to maximize your return on baled items.

Getting the Best Bang for Your Wholesale Buck

Not all wholesale items are created equally. Loose articles sold to a third-party baler will return less than baling the items yourself. Taking that one step further, the higher quality baled items will garner you higher sale rates per pound. Pro tip: cover your baled items with a sheet in order to maintain clean, high quality items.

When planning to start a wholesale operation, there are a few industry information nuggets that will help you along the way. Remember that bales are commodities so the price per pound you will receive will ebb and flow according to the market. Furthermore, when planning for bale pick-ups, purchases are normally made in 40,000 pound truck loads. Thus if you are able to fill up a truck, you can receive $8,000 to $12,000 for the load!

Finally, when contemplating the possibility of expanding your operations through the addition of wholesale, it is important to note wholesale has a lot of opportunity and flexibility. It grants you opportunities to work with a variety of vendors to explore additional ways to be profitable from your donated items. It affords you the opportunity to think of creative ways to engage and impact your community. In the end, it can be another profitable revenue stream for your thrift operation!

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