Tuesday, September 11, 2012

It cost what!!!!? Op Shop Costs.

Huge thanks to Desley from Sandlewood Op Shop for helping open my eyes on the running costs involved with managing an op shop.  My notes are in blue by the way!
"Working as a volunteer in an Op Shop, I am often asked “who is responsible for your pricing”.  Usually this question is followed by “your prices are too expensive” and “will you take X for this?”
As a seasoned op shopper of approximately 50 years, I can honestly say I have never tried to barter in an Op Shop, nor have I asked who was responsible for pricing stock, so these questions were foreign to me.  I have always held the attitude that if an item is priced more than I wanted to pay, I left it and walked away – I did not embarrass staff by bartering with them.
People seem to forget that volunteers are not the owners of these businesses, they are mostly governed by a Board of Directors and have to meet strict State and Federal Government guidelines to keep their doors open.
As I was involved in the set-up of what we believe is the “Best Little Op Shop in Brisbane” (the hours I've seen them put in over the past 12 odd months make me believe their could be truth in this - Vicky!!) , I was soon made aware of the set up and running costs involved in the operation of a thrift shop. 
In our state, op shops are governed by the Queensland Government Department of Justice.  The Qld Government have a rigorous application process (ours took 5 months), a number of application and licence fees and the requirement for an undertaking by Directors to accept financial liability for an shop to operate.
To be eligible to operate legally in Qld, organisations also have to be registered with the Australian Taxation Office and the Australian Competition and Consumer Commission under the Companies Act.
I suspect many little church and or other small operators do not have licenced businesses subsequently their prices can be much lower than other op shops.
Once our “Certificate of Sanction” to operate was issued, the hunt for suitable premises began and without earning one cent we had to find money for rent and bond (in advance); power and telephone to be connected; bank account to be opened; licences paid for to the local council (where it is a requirement to be licenced to display a sign); registration of the business name and every insurance under the sun.  I have probably forgotten a few items but at no time were we offered discounts because we were a non profit or charity.

We have to report to the ACCC and the Department of Justice yearly with a full financial audit and relevant reporting documentation.  Our audit is undertaken by one of Brisbane’s large Accountancy firms and costs us $500 per hour.  The audit this year will cost the Op Shop around $5,000.
OMG!!!!!!!!
Earlier in the year we had to calculate the shop’s running costs and now display them in the Op Shop for all and sundry to see as many people think that with donated goods being sold, they should cost next to nothing to purchase (maybe why so many people steal items from us). Shocking reality.
The following is the latest calculation of our small Op Shop’s running costs:
·         Yearly Audit Fee $5,000
·         Public liability, general  and workers compensation insurance $6,900
·         Telephone fax and Internet $2,800 per year
·         Electricity $1600 per year
·         Rent $25,000 per year
·         Storage $3600 per year (out of season and excess stock)
·         Bank account fee; EFTPOS facility $1200 per year
These costs do not include cleaning products, washing powders, maintenance or repairs to fittings and fixtures/equipment etc.
In summary our weekly takings must be $886.53 before we can spend $1 assisting disadvantage community members.
So the latest response to customers who try to barter over prices, is “Sorry we didn’t receive any discount on our rent, electricity and insurance this week”.  This seems to be effective!"
Sandlewood Op Shop support a huge number of community projects and are always updating their Facebook page with new stock.... which can be posted so please head on over to check out the bargains.  They stock a huge variety from jewellery, vintage, clothing....
Handcrafted bird  pendant - Sold!
A few examples for sale at the moment
Vintage 1950's Cocktail Hour Tray - $12.50
Vintage Oroton handbag $35
1960's twisted green glass vase $20

Their blog can also be followed here
Thank-you again Desley I am in awe of the effort you and all the volunteers at Sandlewood put in, you never seem to stop!!
Designed for Sandlewood Op Shop :-)

10 comments:

  1. That's a crazy amount of money! Such a great insight though. I hate watching people try to barter or get aggressive – it's just so rude. I don't understand why people think it's acceptable to do this in an op-shop, when they wouldn't do it at a normal store.

    ReplyDelete
    Replies
    1. see im totally different their ill barter for everything at stores but i don't barter with op shops i have never actually seen that be interesting to see but any normal shop i feel hurt if i pay the marked price doesn't happen much you would be surprised how much you can get off with a bit of market research and just say it 3 days ago i needed a usb extension cord for my pc i live in the country and was just after 5pm so went to Harvey Norman marked price was $29.99 i payed $8 i would have walked out b4 paying that much and brought it for $6 next time i was in melb if he didn't beat $10 and the $6 is marked price so don't tell me people don't barter with retail shops its easy

      Delete
  2. That doesn’t include the cost of removing rubbish which is donated.

    ReplyDelete
  3. What a great insight into the 'behind the scenes' world of op shops

    ReplyDelete
  4. Well I would never barter, and would of course walk straight out. However every shop has to have these over heads, but they dont get given their stock for free, and have minimal costs for staffing.

    It is just a fact that times are changing and the value of the stock is not as high as they think sometimes, they are not all antique and fashion experts going to heaps of charity shops like the customers, so the customers are in a better position to weigh up the stock and say 'its too pricy'. Found a beautiful little 1912 Royal Doulton mini vase but they put £10 on it, would struggle to make that on ebay in perfect condition and this one was damaged.

    I suppose what I am saying is plenty of places do charge far too much, and I don't think it would be wrong in pointing it out with good reason as they will be loosing business over it. A charity shop is what it is, not an antiques store, and if people can't grab an occasional bargain people will stop searching through all the rubbish to find something priced more than its worth. The availability of so much choice on ebay with ease of searching has really lowered the value of items. They need to keep up.

    To those normal stores Laura mentioned, maybe sports girl/topshop or something? Well I never shop there. How about the local electronics store? Totally ask whats the best price they can do even if I just bought a dvd player. Food shopping? Farmers markets always do discounts and get a locals discount all round town IF I ASK! In these times when most people will never be able to own their own home however hard they work, I do think its perfectly okay.

    ReplyDelete
    Replies
    1. i walk in and look for like a hour yes i turn some profits as i buy and sell but its not the only method i do this liquidation but i do donate regularly just so i can feel good about my money that i make on the side

      iv found items well above the rrp of item new in a shop 400m away

      Delete
  5. I agree that there are plenty of costs involved in running a shop, but I think it's worth op shops having someone who understands price point well to do the pricing in stores. Our local shop has some great bargains, but when you see half a set of kids Ikea cups priced at $5, and a brand new full set is only $2 you have to wonder why! I don't haggle and quite often if I see something underpriced I will leave the change, but when you find things ridiculously overpriced I can understand why people would haggle!

    ReplyDelete
  6. Absolutely mind blowing and great insight, thank you! The op shop I volunteer at is run on the smell of an oily rag I have to say - and whatever they do make, gets "tallied" up into the head store's overall figures for the week. So they don't really get the kudos from their own people, and the head store competes with the others! Ridiculous! I digress... thank you for a great read. I hope you don't mind me sharing this one around? Kel x

    ReplyDelete
  7. This is a very interesting post - perhaps you could repost it on our other opshop blog (I Op Therefore I Shop), as there are a few people who post comments on there about some opshops charging too much. Working in our local opshop, I also get some customers who ask for a discounted price and I look at them in disbelief. All our baby clothes are 50c, and childrens clothes rarely over $2. Adults clothes range from $1 to $10 depending on condition and brand name. How much cheaper do you want us to go before we start giving things away???

    ReplyDelete
    Replies
    1. hey i would never complain if i were paying prices like that adult clothes at min in the country btw start at $10 i have seen them exceed $100 same for kids but max out at $40 we are not in a ritch area either and i wont pay that much at a opp shop they loose sales all the time from me because of this reason iv seen furniture several weeks ago was taken off shelves because of no sale for 6 months and was priced $980 it was not collectors was a average nice ish couch (i thought was ugly) but was nothing extravagant no way id pay that for it at any shop

      Delete