12.03.2011

136 - December in California & Why Vintage Costs More

Jacket - c/o Chicwish, Knit Shorts - c/o Chicwish, Tank Top - Alternative Apparel, Shoes - c/o Lucky Vintage Seattle, Earrings - eBay, Silver Ring - Konstantino, White Ring - c/o Gypsy Warrior

Here is my jacket in action! Also, knit shorts! They are only $25 on Chicwish right now. This outfit might sound ridiculous in theory (um, shorts and a parka?), but it's actually kind of perfect for Los Angeles' December. 

Oh, hey, you might also like my shoes, hmm? They were sent over by the Etsy store Lucky Vintage Seattle. Lucky Vintage is probably one of my new favorite Etsy shops; I just bought a vintage Harley Davidson motorcycle tee from their Chictopia Shop "12 Days of Chic" collab (it's the same one in which Tunnel Vision is participating). You know (all together now), support women-owned small businesses. Blah blah blah. Sorry if I sound like a broken record.

For your consideration:

I really wanted you guys to know that this exists in the world, too:


It was just there, parked in my neighborhood. How?! How does this exist, let alone just end up parked in my immediate proximity?! My boyfriend was like, "Take a picture near it!" My response was, "I am not dressed trashy enough to do this thing proper justice." It's for sale, and a small part of me wanted to take down the phone number. How could you not want to buy this thing? It's a total monstrosity. I need twelve of them -- a land armada of raised mini-monster-truck El Caminos with bulldog masts on the front.

Okay, I have decided to post ACTUAL content today, not just pretty pictures. I want to talk about pricing vintage. 

WHY IS VINTAGE SO EXPENSIVE?
As you all know, I have a $30 rule. I tend not to purchase things if they are over $30, unless I have considered the purchase for a long while, or if it is a great bargain. As an avid thrift-store shopper, I find that I can get most things I like for around $5 from a local thrift shop. The more familiar one is with the prices of used garments, the more shocked one might be by the prices that vintage stores charge for the same used items. A dress may have cost $5 at a thrift store, but is sold for $80 at an online vintage store. How is this justifiable? I have broken down my explanation for vintage pricing into three categories: sourcing, overhead, and relative value analysis. Keep in mind that this is based on my experience owning a brick-and-mortar plus online vintage shop in San Francisco, as well as opening up Tunnel Vision with Brit, so it is a Madeline-centric business experience.

I. SOURCING
The first category worth discussing is sourcing. Sourcing is the most important part of selling vintage. It is always a challenge to find the best of the best in actual vintage garments. I am pretty lenient on how I define vintage: my rule is that anything over 10 years old is vintage. Vintage snobs will tell you that is ridiculous and will argue it is more like 30 years, but as the trend cycles shorten, I find that we revert to more recent trends with more frequency, redefining what is vintage or retro. 

When you pay $80 for a vintage dress, you are not just paying for that dress itself. You are also paying for the time and energy that went into finding that dress. Vintage sourcers rely on a variety of locations: thrift stores, rag houses, and out-of-town locations. 

When shopping local thrift stores, there is relatively no cost, other than to pay for a day's worth of work sorting through thousands of garments. The downside to thrifting is that the bulk of the product in the store is not actually vintage. Most thrift store items are between five to ten years old. In this sense, the customer is paying just as much for the items that WERE NOT purchased as they are for the items that WERE purchased. It takes a trained eye and a lot of patience to sift through every piece on the hunt for something of aesthetic or cultural value. Avid thrifters will know that it is a lot of work to shop thoroughly through an entire store, and one day of hardcore thrift-store sourcing will often encompass deconstructing five stores or more. It is fun, but it is also hard work, and most importantly, it is extremely time-consuming and monotonous and when shopping fo resale purposes, you often do not find more than two or three sellable items per store. Each item sourced from a thrift store is typically around $5 to purchase.

There is only so much that can be found at a thrift store, though, and a vintage reseller can never have enough product from which to choose. Most vintage resellers will also rely heavily on rag houses to source vintage products. Rag houses are big warehouses filled with bales (big rectangles of compressed clothing tied together with plastic) of secondhand clothing, sorted by garment type but not by era. Most rag houses require the sourcer to purchase by the bale, meaning they fork over the cash for hundreds of garments, even though only a handful of items from each bale will be sellable for them. Some rag houses cater towards vintage buyers and will allow them to piece-buy with a relatively large minimum purchase amount. If you go the rag house route, you will end up paying more like $10 per sellable item.

The last option is getting out of town. This is extremely important in order to insure maximum variety in your product. Living in LA, thrift stores are often extremely over-picked. Furthermore, there is a large vintage industry here, and even thrift store staff know designer names and will mark items up accordingly. Traveling to a different city to thrift source (especially a smaller town) means that you are getting a different type of product (for example, sterling silver and leather in the southwest) and more of an opportunity to find special pieces that have been otherwise ignored (I once found a Christian Dior sweater in a Fresno thrift store for 95 cents). If you take into account the cost of travel, each thrift store item found in a different city probably costs around $10-$20 per item.

II. OVERHEAD
Once the reseller's vintage stock has been sourced, they have a great deal of overhead to take into account. "Overhead" refers to the expenses that arise when running a business. Typical yet conservative overhead costs for an online vintage retailer include:

1. Storing your vintage stock: between $200-$700/mo (relatively the same price as rent in any city) 
2. Packaging materials for shipment: $100/mo
3. Renting a studio for product photography or building and maintaining your own studio, including:
     A. Purchasing lights: $500 one-time purchase, $25/mo for maintenance
     B. Purchasing seamless backdrops: $50/mo
     C. Purchasing a high-quality camera and lens: $1000 one-time purchase
4. Hiring models for your photography: $200/mo
5. Hiring hair and makeup artists for your photography: $200/mo
6. Hiring a photographer, models, hair, and makeup for an editorial shoot: $500/season
7. Graphic design services: $200/mo
8. Web-store maintenance: $100/mo
9. Advertising: $100-$500/mo
10. Paying yourself! This is actually an overhead cost. Your salary as an owner is predetermined. You make a certain amount of money every month, and if you have additional income beyond that (lucky!) it technically belongs to the STORE, not you (if you took it, you would actually be embezzling). The store then uses that money the next month to pay for all of the overhead. If you live in a metropolitan city and have typical rent and bill obligations (telephone, car or other transportation, health insurance, student loan payments, internet bill, etc.), it is very hard to live off of less than $2,000/mo. Even $2,000/mo in Los Angeles is extraordinarily difficult off of which to live, so this is a conservative estimate of start-up income.

In a city like Los Angeles, overhead costs (if you are cutting costs every way possible!) can come in at roughly $3,200. In order to have the stock on-hand to support that type of income (estimating roughly 30% sell-through of your merchandise), you need to be spending around $2,500/month on product (crazy, right?!). This means that if you are a vintage reseller working out of Los Angeles, you need to be selling roughly $5,700 per month just to keep your store operable and keep food on your table without going into debt. This means that a $5 dress will end up costing $5/mo to store, $10/mo to photograph, and $5/mo to list, making its actual cost $25.

Now, with that in mind, we vintage sellers tend to call in a lot of favors from our friends, so we are able to save money on models, hair and makeup artists, photographers, and graphic designers most of the time! If you already lived in a big place, you may even be able to get away with not having to pay extra in rent to store your stock and studio set-up. There is a lot of variation here, but it helps to give you an idea of the expenses associates with used clothing resale.

III. PERCEIVED VALUE
In a perfect world, each piece would be priced based off of its individual overhead costs, including its original purchase price. However, pricing varies from garment to garment based on the purchase location and style type, and nobody likes to see chaotic pricing all over a website -- customers like to know what to expect from each store, so garments need a relative structure for selling price. With that in mind, we do tend to think about how much someone will realistically pay for each item. We try to understand who our customers are and how much value they will place on the item we have found, then make sure that our acquisitions balance each other financially. A pair of shorts that may have cost $25 total to purchase, store, and photograph might sell for only $30; but a dress that cost $25 to purchase, store, and photograph might sell for $80. These items balance each other out.

Furthermore, we as sellers try to make sure that we are only sourcing items that the customer cannot find anywhere else. Vintage is special because it is unique. In order to insure that your customers maintain a strong perceived value for your items, the seller needs to keep their product at a high caliber. Vintage should never be about "how much I can get for it." Every piece should be worth the price tag put on it because it is remarkable, one-of-a-kind, and a little piece of history. 

AT THE END OF THE DAY...
Selling vintage is a great way to make a little side money if you are gainfully employed, but in order to make a full living off of it, it is a costly endeavor that needs to be treated like a real business. I hope this helps demonstrate why a $5 dress from a thrift store might be sold for $80 on your favorite vintage store's website. At the end of the day, every piece is only worth as much as someone is willing to pay for it!

40 comments:

  1. Thank you for writing about why vintage is so expensive! I knew that you had to take into account overhead, however, I didn't realize how difficult it is to locate vintage items.
    Love your knit shorts! Because of the Santa Ana coming up to San Fran, it's been warm enough recently to wear shorts, but otherwise it's freezing.
    xx maggie

    ReplyDelete
  2. Thanks for posting this. While I've vaguely envisioned the cost/time/effort that goes into ventures like this, it's good to see a real break of it all from someone who is actually in the industry. I've tried to explain this to my friend multiple times -- exclamations of "I could just thrift this!" countered by "Yeah, you could, but you might not ever find it in your size or in decent condition, if at all and even then, the premium attached is because you are paying someone else to do that hard work for you."

    ReplyDelete
  3. Interesting write-up to read, I totally understand why vintage pieces are expensive online, one "might" have found an awesome piece at a Goodwill for $5 only "if" you went back a hundred times, and only "if" its your super lucky day, cause in the end you're saving yourself a lot of trouble, time and money (for travel as you mentioned) and supporting the people who have similar taste as you to continue their great store ! (which you'll end up buying from again, because lets face it, its not easy to find that certain something vintage item which appeals to you). Its awesome that you took the time to write this up because for people who don't frequent thrift stores or who aren't into vintage, this was really informative !
    Those shoes are adorable on you by the way, and you rock that furry trim coat. So lovely ! xo

    ReplyDelete
  4. Wow you have definitely opened up my eyes to the vintage world! There's not much here in Virginia. & I also liked what you put about how the trend cycle is getting shorter too..I totally agree.

    Stay awesome!

    ReplyDelete
  5. You're amazing! I've got way more to say but I rather stick to your pure simple epicness as I catch my breadth

    Sunnie
    (.=

    ReplyDelete
  6. Thank you so much for writing this, I am always having a hard time explaining this to people

    ReplyDelete
  7. Thankyou so much for posting this in such detail and with honesty! It is so rare for people to actually be willing to explain these things properly x

    ReplyDelete
  8. Thank you so much for writing this post, it was so interesting and concise from start to finish and I learnt so much more about what it really takes for vintage businesses. I never knew for sure about overhead but now I do! Great post.

    ReplyDelete
  9. Thanks for this write-up! I work at a thrift store and have found so many amazing vintage/retro pieces. I've been thinking of starting an online vintage shop, and this has been very helpful!
    P.S. I love your shoes! They're so unique!

    ReplyDelete
  10. Those shoes are literally the best thing since sliced bread! Love them..

    Love the Vintage write up too! x

    ReplyDelete
  11. your shoes! i need a pair of those in my life!
    http://ccowland.blogspot.com/

    ReplyDelete
  12. Thanks for sharing the insiders view on vintage pricing.

    I just cut out the middle man and go thrifting myself, but with all the time and effort you put in, I can see why some items cost so much.

    ReplyDelete
  13. what size are you wearing for the jacket?

    ReplyDelete
  14. Omg, I love your shoes!
    http://jojomorris.blogspot.com/

    ReplyDelete
  15. great shoes!! want it! love the print!

    ReplyDelete
  16. that was so insightful! I'm glad i took the time to read that, i've always wondered myself why vintage stuff is so much more expansive and it's great to finally understand. It makes me more inclined to buy vintage things now, knowing the time and effort that goes into finding these amazing pieces!

    <3
    Maya

    ReplyDelete
  17. so much goodness in one pair of shoes! & your vintage write up is so on point. I felt like I was back in college in a retail class while reading it. I really feel like if more people understood about what all goes into starting a store they'd bitch less about prices so hopefully a lot of people read this!

    ReplyDelete
  18. Living near Amish country has it's benefits. Thrift, antique shops and other weird flea markets are aplenty. The things people are searching for out there are ENTIRELY different than the things I'm searching for. PARADISE.

    ReplyDelete
  19. Thank you! I think that I and a lot of others needed to know those things about selling vintage. I hope tunnel vision is going well. I know everyone is saying this, but omg wtf holy shit tose shoes are so so amazingly badass ahh

    ReplyDelete
  20. i love how cool you look in all your outfits! xx

    http://shesingsndrinks.blogspot.com/

    ReplyDelete
  21. this was such a interesting article and im sure it will make me think twice about tossing aside a slightly more expensive vintage piece next time im shopping because now i know how much time and work has been put into it!

    KIRA LILLY fashion blog

    ReplyDelete
  22. that shorts are the cutest thing ever! ♥

    ReplyDelete
  23. Loved this post! Thank you for your (very true) perception on vintage clothing!

    ReplyDelete
  24. Your shoes are so original and so cute! And this car is just so great, it remember me the movie Death Proof.
    Vintage can be so expensive sometimes! And as you say sometimes it's things that the retailer have bought a very low price. I also got this rule of the 30$ (well £ for me). I even did this month a rule 'nothing more than £10', and it's actually possible ahah

    ReplyDelete
  25. loved this post...it makes me want to go thrifting more often. also made me realize that I totally follow the $30 rule too lol

    Victoria
    www.foreverfashionablylate.com

    ReplyDelete
  26. Poor, poor, El Camino. I love them but...
    Great earrings, ring and shoes.
    Great article about vintage. Most people think that it is really easy to find vintage but, it takes a lot of time to become good at picking out great vintage.

    ReplyDelete
  27. what a great post! it's all so true and people don't always realize the work it takes just finding good pieces! and then making sure they are clean, photographed well, measured, all of the advertising costs! anyway, yes, lovely article :)

    ReplyDelete
  28. I can also say random nouns that have nothing to do with the content at hand:

    Banana
    Fabio
    Myopia

    ReplyDelete
  29. Firstt offff, I'm so obsessed with your makeup and your shoes it's ridic (well, really the whole outfit, but I'm trying to tone it down a bit). and that car. my god. never in my life have I seen such a thing.

    as far as your breakdown on vintage pricing goes, you are so ontop of it! Makes me feel kinda intimidated being that I'm not halfff as prepared and organized as you are-but your explanation really helped me a great deal. You are going to do so well, I cannot wait to go crazy on your site!

    x Sea

    ReplyDelete
  30. Hi madeline, that was a really interesting and insightful read. I can't wait for TUNNEL VISION to open :)

    ReplyDelete
  31. OMG YOUR SHOES!!!!! amazing, really!

    ReplyDelete
  32. oh maaaan your shoes are killing me!

    <3: maukku

    ReplyDelete
  33. dude you totally hit the nail on the head with this post! so glad you went into so much detail, very informative. as a business owner myself (motorcycle industry, but same things apply) I know very well the cost of sourcing, overhead, etc. It can be extremely difficult, and being self employed, we also have things like health insurance, legal fees, etc to take into account. Luckily we do as much in house as possible (that's where I come in, lol) to save costs. I'm opening up my own vintage store as well and am literally going to be a one woman team doing everything from sourcing, modeling, photographing, web design, etc. So I def. know where you're coming from and glad someone explained it, because I know a lot of people get confused as to why some vintage is so much more than other. Great info to have on hand!

    Can't wait for your store to open!!

    Beneath the Glass

    ReplyDelete
  34. oh my, these shoes are so amazing ♥

    feel free to join my original giveaway on my blog here :) :

    http://mischeldoublew.blogspot.com/2011/12/join-my-international-giveaway-win.html

    ReplyDelete
  35. awesome pair of shoes waw i'm so glad i've found your fresh blog!
    s

    ReplyDelete
  36. Shorts are lovely, but it remind me childhood and knited leggings, I wouldn;t be brave enought to vear them :D

    ReplyDelete