As in all aspects of the thrift store operation, there are critical questions to be addressed for your transportation department. Interestingly, there are three reasons management does not ask the questions of cost and efficiency.
- There is a major lack of control. The phone rings for a pick up whenever the donor chooses. The request comes from wherever they come and the ability to manage such randomness is seemingly impossible.
- In many cases, there is already too much demand for pick ups. To manage existing requests might lead to more requests, which adds to the dilemma of not being able to pick up what is currently being offered up.
- The ability to document and track all the details seems unattainable. And the perceived cost in time and money, especially when considering the randomness and high demand, only confirms the assumption.
For these reasons and several others, management avoids the scrutiny assigned to other areas like processing’s performance metrics and retail’s number of full-time employee equivalents to total sales targets. But should this be the case?
Let’s apply some numbers and logic to transportation. (These numbers are based on statistics from over 50 stores reported and have been proven to be relatively accurate in the stores we have a direct hand in managing.)
- A two-person team can complete an average of 4 pick ups per day 6 days per week, or 24 pick ups per week.
- The associated costs of labor, truck and fuel expenses totals approximately $1,800 per week.
- So, the cost of each pick up, on average, is $75.
So the critical question is what is the value of those 24 pick ups?
We have posed this question to every organization we have encountered and the reported values vary greatly from market to market. The high end reporting organization reports an average value of $400 per pick up (at thrift prices) whereas the low end reports an average value of $200. In every case, the value far surpasses the costs.
One other pertinent fact about picked up goods. They typically are higher quality than drop off donations. And we know that higher quality goods produce a higher price. And that higher quality goods sell faster. This fact alone makes it even more valuable to the stores revenue stream.
So, if the pick up cost is managed properly and the quality of the donated product is so high, doesn’t it make sense to invest in your transportation department?
In Transportation Unloaded (2 of 2), we’ll talk about how to improve your transportation department and maximize the return on each donor pick up request.