The Reseller
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The Reseller

The Kaizen of Growing Profit in Thrift

Part 1 of a series.

Art By Author on Canva

What do Kaizen and Lean have to do with thrift? Thrift receives random stuff and has to turn that stuff into an organized retail store. Anyway, aren’t those manufacturing concepts?

When a second-hand operation accepts goods from donors, a contract of sorts is created. People give their stuff expecting they will be sold to support a cause. Fulfilling those goals requires turning goods into money, with some leftover after paying the bills. Kaizen helps improve the “some leftover” part.

In Kaizen, everything either adds value or doesn’t. Being intentional about understanding what does and doesn’t is the core of Kaizen. For example, accepting a donation adds value; putting it in a bin and storing it for months may not.

Labor is generally the single most significant expense in a retail operation. Labor used well is an asset; labor applied inefficiency is an expense. From a labor standpoint, there are two components. The number of touches and time being touched or worked.

In my current world of second-hand home center goods, there is a natural bias to test and repair things — especially electrical items. The question I am currently exploring is when labor investment adds enough value. Ten minutes invested in something that becomes worth $100 repaired is one thing. Half an hour spent on something then worth $10 is another.

There was a time in the thrift world that clothing was mended, buttons replaced, and so on. Eventually, the labor cost exceeded the net results, and that practice was largely abandoned. However, a textile salvage market also grew up to monetize un-sellable clothing.

A consistent Kaizen lens can shorten the trip. There is a concept with the acronym D.O.W.T.I.M.E. that helps identify time and profit thieves. It works in thrift, with a twist.

In this series, we will explore each letter of this acronym and how they apply to the second-hand world.

Thanks for reading!

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Tim Gebauer

Thrift and retail blogger. Helping small business succeed. Connect on linkedIn, my thrift reseller blog thethrifter or my amazon thrift merchandising e-book.