Are You Maximizing Profits With These Pricing Principals For Your Clothing Exchange Stores?

If you work in clothing retail there are many facets you are familiar with in the buying and selling of clothes. There are budgets, displays, pricing and return policies. In the world of clothing exchange retail these aspects can get a little trickier, especially when it comes to pricing and budgets.

So how do you price for resale?

Here are a list of tips to help you better price your inventory for resale.


First let’s talk a little about the difference between cost and worth by looking at the meaning of fair market value (FMV).  Fair market value involves two parties, the willing buyer and the willing seller of an asset or piece of property.  Note that uninterested buyers are not considered to be a part of the market and should not be considered in the determination of value. In other word the “market value” is not the same as the “intrinsic value” that different people may place on the item. For example; a shirt could originally cost $20.00 but because it is a limited edition or it was worn by a celebrity it could resale for $200.00. The perspective of the market can be the deciding factor.

Pricing for Resale Tips

1) It is helpful to have a standard percentage for example:

  • Pricing should be less than 75% of the retail price.
  • Standard prices for popular brands like Abercrombie & Fitch, Baby Phat and Seven.

2) Be aware of exceptions such as:

  • In the case where you are reselling a new item with the tags on it you can charge slightly more than the standard percentage of the retail price if the item is still in style and in season, with no damage.
  • Items that are in too poor of shape to be resold or items that are so out of date that 1% of retail would be FMV.
  • When it comes to rare items like Hermes Birkin bags they may be worth more than their original retail.
    • eBay can be a great research tool to check for price/value inflation on certain name brand items.
      • “eBay Test” Go to and click on the Sell page. They have made it very easy by including a “What is it worth?” box. Enter the name of your item, and it will give you the average price “sold” in the last 30 days.
      • It is important to search for “sold” prices, as the prices on the unsold items aren’t relevant because the seller didn’t sell the item.

3) Keep up to date on current trends:

  • Knowing styles and label can efficiently assist you in determining the age of the clothing.
  • Thanks to stores like Forever 21 and H&M the cycle of fashion is becoming more rapid and allows secondhand stores to be pickier than ever. Unlike nonprofits, which accept most donations, the fast-fashion resale shops typically buy only about 5% of the apparel that people bring into the store.

4) Look at what other clothing exchange shops are doing:

  • The popular Buffalo Exchange keeps there fashions looking fresh by stocking there stores with new items. About 20% of their inventory is purchased by headquarters and sent out to their retailer; items such as shoes, jewelry and hosiery.
  • Plato’s Closet is successful in their market because they target teens.

5) Simple questions to keep in mind:

  • Think about each item’s intrinsic value when you price it; would someone buy this?
  • Is the garment in trend?
  • What would an interested buyer pay?
  • Without hesitation, what’s the most you would pay for that item?
  • Remember that store markdowns are ubiquitous enough that other shoppers may not be comparing your price to a garment’s full original price.



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