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Scaling Your Resale Business: The Benefits of Buyouts, Consignments, and Store Credit



Scaling Your Resale Business: The Benefits of Buyouts, Consignments, and Store Credit


In the ever-evolving world of resale, having a strategic edge can make all the difference. Trendful, a leading resale company, empowers merchants to effortlessly start or scale their resale business. Our software manages the entire reselling process, from the initial contact with customers (sellers) to issuing payouts. One of the standout benefits of our software is the ability for merchants to customize their pricing strategy and offer options to their customers.

But what exactly are these offer options, and how can they benefit your resale business?

Understanding the Core Offer Options in the Resale Market

When it comes to the resale market, three primary offer options dominate: Buyouts, Consignments, and Store Credit (Trade-ins). Each of these options has unique benefits for both merchants and customers and understanding them is key to optimizing your resale strategy.

1. Buyouts

Buyouts - involve the merchant paying out their customer for items once they have been received. This option is incredibly convenient for customers as they receive immediate payment for their items without waiting for them to sell.

Benefits for Customers:

  • Immediate cash payout
  • No waiting period for the item to sell

Cons for Customers:

  • Potentially earn less money with buyouts

Benefits for Merchants:

  • Complete control over inventory
  • Typically higher target markups
  • Rapid inventory acquisition at lower costs

Cons for Merchants:

  • Take on inventory risk
  • Can be more difficult to scale because of the initial capital needed to acquire inventory from customers

Many resale businesses start with buyouts to quickly build their inventory. For example, companies even as big as Rebag initially relied on buyouts before expanding their offer options to consignments or store credit.

2. Consignments

Consignments - allow merchants to take in items from customers without needing to immediately purchase them. Instead, customers only receive payouts once the item(s) sell. This is perhaps the most well-known option on the resale market.

Benefits for Customers:

  • Potentially higher earnings compared to buyouts
  • Payment upon sale, potentially maximizing the item's value

Cons for Customers:

  • Potentially can take longer to receive money for items

Benefits for Merchants:

  • Reduced inventory risk
  • Easier to scale business operations once the resale business has been established

Cons for Merchants:

  • Lower target markups and can potentially make less in profit

While consignments can lead to lower target markups for merchants, the volume of sales can often compensate for this.

3. Store Credit (Trade-ins)

Store Credit - offers customers immediate compensation in the form of credit that can be used within the merchants' stores. This is similar to buyouts but keeps the transaction within the resale ecosystem.

Benefits for Customers:

  • Immediate credit, is often higher than cash buyout value, but not usually higher than consignment value
  • Encourages the customer to purchase from the resale merchant

Benefits for Merchants:

  • Helps convert sellers into loyal buyers
  • Keeps value within the business

Can be a less appealing option to customers since they only receive credit for their items to use within the merchant's store. However, it can help foster a sense of community and loyalty within the merchant's resale community.

Additional Inventory Acquisition: Wholesale

Beyond customer-driven inventory, many resale merchants also source products from wholesale companies. This allows for large-quantity acquisitions, though at a higher cost compared to acquiring directly from customers. Acquiring large quantities wholesale also means you have less control over the condition of items.

Customizing Your Strategy with Trendful

At Trendful, we understand that every resale business is unique. Our software enables you to tailor your pricing strategy and offer options to best suit your business model and customer base. Whether you're just starting out with buyouts or expanding into consignments and store credit, Trendful provides the flexibility and tools you need to succeed.

Embrace the future of resale with Trendful and discover how our customizable offer options can transform your business. Start today and scale your resale business with confidence.