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.

Related Articles
  1. Retirement

    Suddenly Pushed into Retirement, How to Handle the Transition

    Adjusting to retirement can be challenging, but when it happens unexpectedly it can be downright difficult. Thankfully there are ways to successfully transition.
  2. Savings

    How Parents Can Help Adult Children Buy a Home

    Owning a home isn't easy thanks to stringent lending standards. Thankfully, there's ways parents can help their kids buy a home.
  3. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  4. Entrepreneurship

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
  5. Retirement

    4 Ways to Boost the Amount You Save for Retirement

    Retirement can easily last more than twenty years, which means you have to save a lot. Thankfully, there are ways to enhance the amount you put away.
  6. Savings

    Craft Beer Clubs – Bargain or Not?

    If you're an aficionado of artisanal brews (or would like to be), a beer club can be a palate-pleasing, albeit pricey, way to expand your hops horizon.
  7. Credit & Loans

    Adjustable Rate Mortgage: What Happens When Interest Rates Go Up

    Adjustable rate mortgages can save borrowers money, but they can't go into it blind. In order to benefit from an ARM, you have to understand how it works.
  8. Retirement

    How to Stretch Your Retirement Savings

    What does "nest egg" mean for your personal situation? Will you deplete it, or will you nurture it to generate income that lasts throughout retirement?
  9. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  10. Stock Analysis

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  1. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  2. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  3. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  4. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  5. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  6. Is the retail sector also affected by seasonal factors?

    Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center