Thrift Store 101 Running Successful Stores for Mission and Profit Presented by: Ralph Middlecamp

Mission Centered And the crowds asked him, "What then should we do?" He said to them in reply, "Whoever has two cloaks should share with the person who has none. Luke 3:10

Mission Centered "the coat hanging unused in your closet belongs to the man who needs it; the shoes rotting in your closet belong to the man who has none;… You do wrong to everyone you could help, but fail to help." St. Basil the Great

A Tradition of Service Originally the Society operated clothing closets for the needy which grew to “salvage bureaus” to sell the excess clothing. Along the way these bureaus opened up for sales to the general public and developed into the thrift stores of today.

A Significant Presence SVdP Thrift Stores in the USA have Gross Revenue of over $150,000,000 Property and Equipment valued at over $175,000,000

A Significant Presence SVdP Stores employ over 3,000 people (full & part time) Provide over $70,000,000 wages and benefits

A Significant Presence Stores give away over $10,000,000 of merchandise to people in need Stores provide over $32,000,000 income to the Society to support its work

A Significant Presence Expect your Thrift Stores to be SUCCESSFUL They are: Obligated to serve our clients with respect Obligated to create a ROI for the community Obligated to compensate our employees fairly Obligated to uphold our good reputation

Who’s in charge? Governance matters Structure must comply with By-laws and the Rule and control rest with the elected leadership Due diligence vs. micromanaging Develop job descriptions for committees and staff (do it when things are working well) Charities are not exempt from laws Great presidents not always competent business leaders

Changing Thrift Environment Once thrift stores were mainly operated by a few well known charities. Today we operate in a very competitive environment.

Changing Thrift Environment The current competitors have increased in number and differ widely in their size and sophistication

Changing Thrift Environment For profit businesses have become significant competitors

Management is the key to success Key Concepts of Thrift Management is the key to success Hire and reward competent people Appoint oversight committees that understand their function Do not accept excuses Success results from daily attention to details

The primary competition is for the donated goods How We Compete? The primary competition is for the donated goods Clothing is the most desirable donation Convenience vs. Loyalty (promote mission but you must provide convenience)

Create and understand a processing plan that works best for you Going With the Flow Create and understand a processing plan that works best for you Central processing vs. in-store processing Analyze comparative advantages Minimize downside & maximize upside

The back of the operation drives the Thrift Store Start at the Back The back of the operation drives the Thrift Store Donation reception Handling recycling and waste Truck unloading

The back of the operation drives the Thrift Store Start at the Back The back of the operation drives the Thrift Store Sorting and preparing donations (material handling & ergonomics) Pricing store product Processing “rags”

Let’s Talk About the Rags Recycling for added income Define terms & industry standards Without efficient textile recycling system thrift stores get constipated

Budgets & Plans If you don’t know where you want to go, how do you know when you get there? + Revenue - Staff - Space - Everything else = Profit (yes it is ok to use the word)

Staffing – volunteer or paid Fully paid staff = 60%+ of revenue Hire good people, pay them fairly (underemployment isn’t charity it is injustice) Volunteers require nurturing and direction (and sometimes firing) Opportunity losses with volunteers Comply with FLSA Challenges of mixed approach

What gets measured gets done Know What You Expect What gets measured gets done Measure production workers outputs Be careful what you measure (unintended consequences) Is it the worker or the system? Sales per square foot = ? Budget is a planning tool and a measure of success

Our employees are not our “clients” Manage People Our employees are not our “clients” Our employees are our greatest asset and liability. Failure to manage employees properly puts the mission and the organization at risk. Provide the tools & opportunity to succeed but employees who do not contribute must be dismissed. Board must support management

You Have A Theft Problem All thrift operations have an employee theft problem Create a culture of integrity. Make it easy to be honest. Do not tolerate theft of any sort for any reason. What is stolen is not the biggest problem. Productivity Reputation Work environment

Retailing the Recycled Have management and committees that understand the business

Advice from a Dutch Uncle (are you proud of this?) What is that smell? Are your shelves dusty? How about dusty bunnies on the floors? Would you use that bathroom? Is there litter in your parking lot? Walls and signs sure look dingy?

What in store for me today? Everyone who comes into your store wants to buy something Customers know your inventory, do you? – shop for yourself Listen – do you hear hangers moving? $ / sq. ft. – what moves? Too much of a bad thing (it happens fast)

Customers are always valued (but maybe not always right) Thrift customers are challenging Should not get too close -you have conflicting interests Get customers to love your store for the right reasons Too many policies project negativity

Be Successful for the sake of our mission Expect your Thrift Stores to serve our clients with respect create a ROI for the community compensate our employees fairly uphold our good reputation

The Thrift Store The main driver is no longer price: Experience Recycling Unique Product Supporting Mission Buy Local

Why Shop at St. Vincent de Paul?