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Pre Owned Business Model

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  • 26-06-2022 8:14am
    #1
    PalLimerick
    Registered Users Posts: 497 ✭✭


    I've been doing a bit of research on the pre owned business model/second hand selling by private individuals.

    I've read of the 50/30/10 rule which is, if you're selling your own second hand items privately expect to get the following,

    New condition items 50% of retail value.

    Good condition items 30% of retail value.

    Well used items 10% of retail value.

    Where or what is the other 10%?

    Then my other query is, say a pre owned shop is buying your items from you, obviously they can't pay the 50/30/10 rule. What do they offer for your items.

    I ask these questions as I'm considering investing in a second hand shop from scratch think cex smaller scale but not only tech.

    Any input much appreciated.



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    #2
    kirving
    Registered Users Posts: 5,983 ✭✭✭kirving


    It's not a rule so much as a guideline to help set expectations from the sellers.

    You see it all the time, people selling say a 6 month old TV or phone, for 80% of asking price. They think it's a fair price, but the buyer is missing 6 month of the warranty period.

    Look at how the likes of CEX, and the delta between what they sell at, and what they offer. They're relying on their reputation in order to justify charging a premium. They're also at a scale where they can spread the cost of warranty over their entire business, a single shop would struggle with that.



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    #3
    Mick Tator
    Registered Users Posts: 677 ✭✭✭Mick Tator


    There is no other 10%. The percentages given are for item value, not item sales volume.

    If a retailer is buying items from you, you are a supplier like any other, so why would they not pay the 50/30/10 rule? If the supply was a large amount of itemised items they might want an additional 10-15% off the total as a bulk discount. If you were supplying a high priced euro ‘job-lot’ they would want a substantial discount but I cannot imagine such a retailer blind-buying a ‘mixed bag’ of items for obvious reasons.

    It’s not a retail business I’d invest in, fickle market, high overheads, heavy competition, slim margins, capital intensive, low sales points.



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