Thrift stores have unique operational challenges due to the dynamic nature of their inventory. One of the most significant decisions for operators to make is selecting and implementing production methods that fit the store’s pricing strategy and scalability needs.
Let’s review the seven production methods to determine which options you may want to consider for your thrift store.
Keyboard Presets
The simplest of all the options, keyboard presets involve no tagging. Instead, items are rung up by pressing buttons that correspond to predefined prices. This is an excellent option for thrift stores that value simplicity more than data collection.
Benefits:
- Ease of use: This presents the least amount of work for store staff.
- Fast transactions: Minimal pricing control makes for fast checkouts while also allowing for the use of color-of-the-week pricing discounts.
Limitations
This method only offers you a single price point so your pricing options are limited. Also, there is no automated production tracking so you will have minimal sales data.
Scanning of Pre-Printed Tags
In this method, thrift stores use pre-printed barcoded tags. Data is collected by scanning these tags at production and again at checkout. Pricing is predetermined with a single price point per tag.
Benefits:
- Improved data collection: This system allows for the collection of far more data than keyboard presets. All items sold are tracked allowing for informed inventory decisions.
- Simplified pricing process: Pre-set pricing of the tags ensures consistency in a simple and easy-to-use manner.
Limitations:
While this system does allow for the collection of production data, it does not give stores the ability to control pricing dynamically.
Single Price
This method skips price entry, relying on a single price point for all items in specific categories. Pricing is consistent but pre-determined. Tags are produced dynamically for all goods in a way that allows for color-of-the-week discounts.
Benefits:
- Consistency: As the name suggests, this system simplifies pricing across specific item groups.
- Data collection: The barcode scanning tracks production metrics for inventory analysis.
Limitations:
While dynamic tags are being produced, only one price point is allowed per item.
Open Price
The open price method prompts staff to enter prices manually at checkout using a keypad. It’s a flexible approach for stores with varying inventory conditions.
Benefits:
- Flexibility: The most flexible option listed thus far that allows for dynamic pricing adjustments.
- Data collection: Despite its flexibility, it still tracks sales data for reporting and analytics.
- Customizable: The ability to tailor pricing makes this method ideal for unique and high-value items like antiques and furniture.
Limitations
While flexibility is a benefit, it also opens the door to inconsistent pricing and human error due to manual entry.
Good-Better-Best
This method categorizes items into three tiers. Predetermined prices are displayed on the production station for each category.
Benefits:
- Simple categorization: The system is easy to remember and simple for staff to assign pricing tiers.
- Consistent pricing: The simplicity of the system ensures uniformity across categories.
- Data collection: Tracking production data for inventory analysis is possible with this system.
Limitation:
The flexibility inherent in this system opens up the potential for producers to use prejudged value on pricing.
Condition-Based Good-Better-Best
A more complex version of the Good-Better-Best method, this approach focuses on the item’s condition, without showing prices on the production station.
Benefits:
- Condition-based pricing: Customers will appreciate the fact that the price reflects the quality of inventory more accurately.
- Discretionary pricing: Thrift stores can maintain consistency while still having the flexibility to get higher prices for higher-quality items.
- Data collection: This method enables a more detailed collection of data for increased production insights.
This method removes the limitation seen above, by removing prejudged value on pricing.
Condition-Quality Grid
This is the most advanced production method available. Using a matrix of up to 36 pricing options – 6×6 grid – based on condition and quality, without displaying prices on tags.
Benefits:
- Granular control: This system enables the most flexible and precise pricing for a diverse inventory.
- Enhanced data insights: The grid system offers the most comprehensive production data for strategic decision-making.
- Scalable: Increases brand awareness to maximize value per item and boost the average selling price.
Scalability and Flexibility with Multiple Methods
Do you see multiple methods that you think would be beneficial to your business? Or is there one that stands out? You can build the perfect production method based on your specific needs, whether that be by store location, department, or a combined approach.
- Transitioning over time: The system you use can evolve with your thrift business. Start with basic methods like Keyboard Presets or Single Price and move to advanced options like Condition-Quality Grid to help you develop the skills to change your production processes.
- Location-based strategies: One system does not fit all. These production methods can be tailored to each store location based on customer demographics, donation quality, and dynamic item pricing.
- Combination approach: Different departments can use different methods or item categories to maximize efficiency and profitability.
Manage Inventory Your way
Selecting the right production method is just the beginning. The ability to manage inventory “your way” ensures that your thrift store can adapt to market demands, improve operational efficiency, and scale seamlessly across locations. It can take time to find the right fit for you and your store, the sooner you get started, the sooner your thrift store can benefit.
