Fund a Wardrobe Refresh by Selling the Items – Online and in Stores – That You No Longer Wear  

Years ago, I worked for a company that reimbursed me for my tuition every semester; I paid full price for the first semester, but at the end, was reimbursed 50%.  Going forward, when I registered for classes each semester, I used the previous semester’s reimbursement to offset the cost of the new tuition. In effect, once this system was in place, it was as if I was receiving a 50% discount on my tuition upfront.

Recently, I discovered that I could apply a similar methodology towards buying clothes and accessories. I could pull out all the clothing, purses, shoes, and accessories that I no longer wore and take them to a local consignment store to sell them. I tested this theory for almost a year and found that I was able to cut my costs on average as much as 30% for future purchases, depending on how much my items fetched at the consignment store.

This method achieves two goals: if you want to achieve a new look, or freshen up your wardrobe, or procure a couture bag that is ridiculously expensive, or replace clothes that no longer fit because of a fitness goal you’ve reached, you can do all of that in one fell swoop. In other words, why not offset the cost of your new wardrobe while at the same time making space for it in your closet?

We’re all on a budget of some type – whether we’re saving for a dream home or to buy new tires. And selling clothes, purses, shoes, and accessories you no longer want can help make staying within that budget less painful. Call the process your annual or quarterly “fashion refresh” project!

While there are many ways to earn back some of the cash you invested in last year’s wardrobe, three methods — online auctions, local consignments, and online sales – can offer the biggest cash payout for your merchandise.

Online Auctions

Each day, millions of online auctions happen on virtual sites where people sell their merchandise to the highest bidders. There are many online auction sites, including eBid, eBay, Bonanza, and Online Auction. The most well-known and used site is eBay. Because eBay has more user accounts (buyers and sellers) than any other online auction site (according to statista.com, for the first quarter of 2016, eBay reported 162 million users), more potential buyers will likely see your items.

However, that also increases the likelihood that a simultaneous auction will feature merchandise that is the same, or similar to yours. eBay does offer more flexibility, however, offering several ways to sell your merchandise, including:

• • • “Set auctions” (multiple days)
    • Scheduled live auctions (single day only)
    • Set price
    • Reserve pricing
    • Make an offer

Plus, you have two methods for selling your items:

• Use eBay’s tools to sell the items yourself, which means you take care of all the postings and shipping, or
• Send your items to a trusted professional who can manage the auction for you.

The latter option is becoming a growing business for auction sites in general, where third party organizations do the work for you, making auctioning your merchandise less of a hassle and likely more successful since they know what sells and how much they can get for particular items.

While selling via an online auction can be profitable, it also means your profit can be limited unless you have a lot of merchandise to sell. That’s because of a variety of additional fees (e.g., listing fees, upgrade fees, possible optional fees, etc.) The fees are so extensive and complicated that even eBay recommends you carefully review your invoice before paying it, especially if you are doing the work yourself.

In addition, auction sites such as eBay have very detailed policies and procedures to protect you as well as to help you be successful. This includes selling tips, plus information on dealing with unpaid items or  feedback.

However, before you decide to use an online auction site, consider the time you actually have to devote to this project, since online auctions can be quite involved and time-consuming to maintain. On the other hand, this route can be very profitable if you have really high-end, desirable merchandise.

Local Consignment

The way consignment works is that you hand over the merchandise you want to sell and the store takes it from there by evaluating, pricing, displaying, and selling it for you. Your merchandise is evaluated based on cleanliness, condition, and fashion trend. (So I don’t recommend showing up with dirty, worn-out clothing!) The store keeps what they like and will either give the rest back to you or donate it. In the end, of what the store keeps, you split the sales. The percentages vary based on the business and whether you want cash or store credit. The average percentage of sales at local consignment stores can range anywhere from 30% to 60%, depending on the business.

Note that it’s unlikely that a consignment store will take all of your merchandise to sell. No matter how awesome you feel your clothes and accessories are, the consignment store needs the merchandise to move fast. So they will be selective. Some brick-and-mortar chain stores such as My Sister’s Closet are looking for specific items, and will cherrypick your merchandise. (Don’t take it personally. It’s just business.) According to the company’s website, merchandise should have originally retailed for at least $40, should be designer, should be in like-new condition, and should be no more than 3-4 years old.

Some consignment stores, such as Ampersand Boutique, even provide a list of their best-selling items, trends, and designers that will bring the greatest returns in sales, such as Louis Vuitton, Hermès, Prada, and John Hardy. Remember, they want to make money, and they will ask top dollar for each item they choose of yours to sell. In addition, those stores want to make money fast – but that also means you make money fast!

Online Sales

Similar to traditional consignment, online sales can go by other names such as “online marketplace,” “online resale,” or “online consignment,” depending on what is being sold and the business model. Whichever method you chose, the common factor is that merchandise is displayed on a shared retail online site. So your merchandise is being displayed and sold on the same site as everybody else’s apparel.

Again, the clothes you want to sell must still be current, clean, in like-new condition, and preferably trendy as well as designer. The goal is to try to sell your merchandise ASAP. Even the online stores know what sells and will list what are top-sellers, such as bags made by Louis Vuitton, Chanel, and Coach. Remember, their goal is to make money too, and keeping up with the market is important. In fact, the online consignment store TheRealReal states that its “goal is to sell your items at the highest possible price, within the first 30 days.”

Online Business Models

There are two primary business models for online sales — DIY and traditional:

DIY
The DIY model (think Craigslist for fashion) allows more flexibility, but also requires more work on your part: you post your merchandise with your own photos, write your own descriptions, set your own prices and (hopefully) arrange to ship your items to buyers. Because you do most of the work, you get a larger percentage of the sales.

However, if you’re willing to put in the time to manage your own merchandise online, then the DIY model can be more profitable than the Traditional (see below). Tradesy is more of a DIY site because it provides tools to simplify the process for sellers, thereby setting itself apart from other DIY sites. Tradesy also offers some of the best payouts, taking only 9-12% for their fees, because sellers manage their own postings.

In addition, Tradesy has a unique setup with regards to how they help you run your sales. You may be responsible for listing your items, but they will help make the pictures you post look more professional and will send a shipping kit to you so you don’t have to go to the post office once an item sells. Plus, they will also handle the returns.

Traditional
The traditional model (think the digital-only version of My Sister’s Closet) allows less freedom but also requires much less work on your part. (The magazine Harpers Bazaar provides a reliable list of several of these companies, including Rebagg, TheRealReal, and Thred Up.) You simply ship your merchandise to the company, and employees take it from there, deciding what to accept, taking and posting photos, setting prices, writing descriptions and even dropping prices over time to ensure your items sell.

Even better? The percentage of payment to sellers can be more than a traditional consignment store, depending on the business. (Percentages can also vary based on whether you shop with them or cash out.) For example, sellers can earn up to 70% of a sale price at The Real Real. So if you enjoy working with local consignment stores but want to reach a larger audience (to make more money), then selling online with a company following this traditional model might be your best option.

Outdated Clothing = Wardrobe Replenisher

Whether you decide to drive to your local consignment store or do business online, each option provides you with the same fundamental opportunity — to sell what you once loved (but are ready to part with), so that you can use those proceeds to invest in something new.  Every business you work with has the same goal as you: to make money. No matter which route you go, it’s reimbursement for shopping at its best! And what a great way to feel better about buying new clothes, knowing you can resell them next year to make a future purchase just a little bit less expensive.