As Barack Obama battles to delay the impending budget cuts scheduled for March 1, it is clear that the U.S. economy is reaching yet another critical juncture. The president is proposing short-term measures to replace those discussed as part of the fiscal cliff deal, suggesting that the latter could be economically damaging if they are implemented in the spring.
If Congress cannot reach an agreement, the American economy may lose up to 1.4 million jobs through the existing fiscal cliff legislation. With the economy having already displayed signs of contraction and dramatically diminishing growth during the fourth financial quarter of 2012, the likelihood of a further recession appears to grow daily.
The Growth of the Thrift Market
Given that consumer credit rose at a 7% seasonally adjusted rate to $2.768 trillion last November, it is fair to surmise that U.S. citizens are not preparing themselves adequately for a prolonged period of recession and austerity. There are signs that suggest otherwise, however, as the American thrift market continues to grow at a rapid pace. According to the National Association of Resale Professionals (NARP), the thrift industry is now a multibillion dollar concern expanding at an annual rate of 7%.
With more than 25,000 resale, thrift and consignment stores now trading nationwide, it is clear that there is a rising demand for discounted used items and secondhand stock. Up to 18% of Americans plan to shop at a thrift store during any given year, which is extremely positive news in the current economic climate. It suggests that consumers are finally heeding the harsh lessons of frugality and responsible spending.
Becoming a Part of the Thrift Market
Although purchasing items at thrift stores may be a great way to save money, it requires a certain amount of forethought and attention to detail. Not all goods make for suitable secondhand purchases due to poor quality, excessive wear or issues relating to hygiene. The quest to save money while shopping should never compromise your health or quality of life, so you must think carefully before committing to a discounted purchase.
If goods such as food preparation equipment, cutlery and used makeup are all to be ignored at thrift stores, then what exactly should you be looking for? Products such as books and fashion accessories often make for excellent thrift purchases, especially if they have been well looked after by previous owners. It may even be sensible to buy discounted furniture from thrift outlets, although the pieces that you select may require modification and you must therefore account for additional time and financial costs.
Making Money from the Thrift Market
Saving money when shopping at thrift outlets is just one feature of the market. There is also the opportunity to generate cash by selling unwanted items. Flea markets, garage sales and craft shows can all be used as vehicles to sell unwanted goods. They also allow creative individuals to sell their own products. Online resources such as eBay also serve this purpose, although this market is now extremely competitive and not always conducive to a quick sale.
Once you have targeted a market and a method of selling, the next step is to ensure that you are legally set up to trade. There is a huge distinction between selling as a hobby and operating an independent business. Additionally, flea markets, garage sales and craft shows all have different regulations with regard to licensing and taxes. You may need a tax identification number and permits if you intend to sell merchandise regularly. Regulatory requirements are often the most complex part of making money through the thrift market.
The Bottom Line
The continued rise of the thrift market has created an opportunity for American consumers to both save and make money, regardless of their social standing or financial circumstances. Its prominence and increasing popularity also suggests that Americans may finally be learning their lessons in the wake of the Great Recession as they embrace the concept of frugal living and thrift buying. These behaviors may have a positive impact on the immediate future of American society, especially if President Obama is unable to prevent the onset of another recession.