Recently I learned of the passing of Kirsten Block (https://www.azcentral.com/story/entertainment/people/2025/09/23/buffalo-exchange-founder-kirsten-block-obituary/86296310007/) founder/owner of Buffalo Exchange.  Ms. Block epitomized a concept my mother taught me as a child that has guided my life and been passed on to my children, “If you do what you enjoy executing it at a superior level with integrity you will be remunerated at a high level for your efforts”.  Ms. Block made her living selling curated, quality used clothing.  In 1974 after years of shopping thrift stores personally she opened her first store in Tucson, Arizona in a space of 400 square feet. At her passing, the company, now run by her daughter, Rebecca, had over 40 stores and annual revenues of approximately $100 million.

Business models that sell pre-owned or consignment inventory have the potential to be highly lucrative for ownership.  A retail business has three major expense lines in their profit & loss statement.  They are labor, rent, and cost of goods.  Reducing labor expense can be problematic due to minimum wage requirements and the foundational ownership desire to provide superior customer support to shoppers at the venue.  Rent rates are based on location and the quality of the space. For example, a location on main street in downtown will often demand a higher rent rate than a rural strip mall. It is not uncommon for retail businesses to pay premium rents to have “50 Yard Line” locations.  In these situations, a percentage of the rent conceptually can be allocated to advertising as a cost. The final major expense is cost of goods, or the cost of the products merchandised for sale.  It is not uncommon for retail prices to be approximately twice as much as the cost of the products being sold.  The beauty of a company employing a business model that sells pre-owned or consignment inventory is that the cost of goods has the potential to be less as a percentage than is found in a store selling new merchandise creating an opportunity for more robust profit margins.   In the case of preowned inventory the retailer has a high degree of control of what they buy items for from product sellers.  As an avid reader, I periodically take completed books to Half Priced Books to sell.  I am always disappointed at what I am offered for books I bought new at the buyer counter.  At the same time, I am happy to clear room on my bookshelves at home and know the alternative is probably giving the books away to family and friends.  A walk through of the store with dollars available to buy new books after completing a transaction will often see the same books which I just sold offered at a significantly higher values to customers, however in that case the risk that the product will sell and the allocation of space to merchandise and store the product is possessed by the store.  Buy product right that sells profit will be made. Buy product wrong that does not sell, store profitability is diminished.

The other option in this retail sector is to take product on consignment. The benefit of this arrangement is that the cost of product only needs to be paid, if an item sells.  A secondary benefit is that when a business is sold, the price is lower because there is no inventory component for the buyer to purchase. The business buyer simply needs to assume relationships with the consigning parties.  The risk is that valuable retail space will be occupied by product that cannot be sold or that is eventually sold at a lower than anticipated value.

Few business brokerage firms have successfully facilitated as many transactions involving the sale of retail businesses merchandising pre-owned or consignment inventory as IBA.  IBA embraces the space as an intermediary firm welcoming projects and possesses significant knowledge on how to price, market, and complete sales involving these niche retail companies.

Past transactions IBA has been professionally involved in as business brokers have sold consignment furniture, estate jewelry, designer handbags, clothing, equipment, vehicles, and a spectrum of other products.  Recently IBA facilitated the sale of a multiple location furniture store chain that sold both new and consignment furniture.  This company historically and presently is well positioned to support baby boomers who are downsizing and first-time home buyers who want to furnish their homes at an affordable budget.  The story of Joey Ghioni, the founder of the business, was told in IBA’s American Dream Achieved series (https://ibainc.com/blog/nesha-ruther/the-story-of-joey-ghioni-ballard-consignment/).  An interesting jewelry business that IBA sold was Old Cities.  Ownership of Old Cities would travel the United States and buy product at estate sales with attention to detail and a professional eye.  It was not uncommon for actresses to purchase items from Old Cities and wear them as a unique accent at the Academy Awards and other red carpet events to stand out from the crowd.  In the industrial sector, Camcal (http://www.camcal.com/), another IBA transaction would replace and upgrade petroleum equipment. Frequently, they would remove and restore equipment from jobs and resell it creating a high profit margin revenue stream and being able to offer lower priced products internationally and to remote customers, like native populations living on islands in Alaska.

Seattle natives, Macklemore and Ryan Lewis, launched their musical careers nationally singing about thrift shopping and “popping tags”.  https://youtu.be/QK8mJJJvaes?si=dBa7IlWaOF0y7JnF  As the saying goes, “What is one person’s junk is another person’s treasure”.  As a consumer shopping for pre-owned merchandise can allow a person to get more “bang for their buck” and help reduce waste in our society. As a business owner, it can be a rewarding and lucrative form of entrepreneurship.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, and accounting communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.