Is consignment the answer to your dream closet? Buy items you love and let someone else sell your items to fund new purchases? We thought this was an interesting approach to shopping so we decided to dig a little deeper.
Our Hypothesis: Allocate a fixed annual clothing budget and compare buy and consigning versus renting.
For ease, we are going to assume an annual clothing budget of $1,800 (the annual cost of renting with Armoire). Our analysis is also going to assume you’re too busy to run your own eBay, Poshmark or Tradesy store. Full service consignment has grown dramatically in the last ten years so there are few great options. Additionally, most of us don’t have the time or patience to take pictures, write product descriptions, respond to inquiries and ship. Since we are assuming you aren’t looking for a side hustle, this post is focused on full service consignment versus renting.
We’d also prefer selling our designer items to fund new purchases than wearing disposable fast fashion. More reasons to avoid fast fashion here.
Clothes Depreciate 90%+
While you’ve heard cars depreciate 20% within the first year, clothes depreciate even faster. Once you wear an item of clothing, most depreciate by 90%+. Why is that? Pre-owned clothing has to compete with outlets and discount stores selling new items. Do a quick Google search and thousands of brand new designer items are available for 70-80% off retail. While most of the styles are end of season or possibly last season, the items are all new with tags.
We also searched The RealReal and found over 200K listings for women’s clothing for under $50. On average these items retailed for between $300-$500. After they take 50% of the selling price, you should expect to make $25 or less for your $300 item or 8% or less of the purchase price. Sadly, that is the math of consigning clothes. Clothing isn’t an investment and unfortunately your closet isn’t worth much unless it’s full of Chanel and Hermes bags.
Don’t Buy New to Consign
Buying new items with the intent to consign them to fund future purchases is a terrible option given the math we just outlined. If you purchased $1,800 of new clothing in January and only purchased high quality designer contemporary items so you could sell them later, realistically you could purchase six items with an average retail of $300. Once you’re ready for new items, you can send them to The RealReal or other full service consignment business. All of them take a minimum of 50% of the selling price.
Given the pricing of designer contemporary brands, you could expect to make $150 for all six items. This would give you enough to purchase another item on sale or maybe two basic pieces. If you wanted to sell these next purchases you would be left with less than $25 and nothing left from your clothing purchases. Your $1800 budget would get you about seven new items in a year to wear. Given the value of contemporary designer items on consignment sites, donating the items for a tax credit is probably a better alternative.
If you like purchasing new designer contemporary items, expect to make less than 10% of the value when you sell with a full service consignment site. You could make slightly more if you sold the items yourself, but you will still net less than $300 for your $1,800 worth of purchases.
Buying Preowned and Consigning is Better
If you only purchased pre-owned clothing with your $1,800, you could purchase ~ 36 designer contemporary items (assuming average $50 purchase price). If you resold all of these items, you should be able to recover close to $900. This money could fund another 18 items. As long as you were disciplined and purchased items at an average price of $50, in an ideal scenario you could get close to 72 items during the year.
The challenge would be the time it takes for these items to sell since sites like The RealReal have over 200K listings for items at this price point. The cost of shipping would also impact the number of items you could purchase. Clothing also sells significantly slower than shoes and accessories and it may take months for some items to sell. Additionally the longer it takes for an item to sell, the more price discounting occurs. Finally, many of your purchases will need to be dry cleaned once purchased and during the period of ownership. More realistically you could probably get 60 pre-owned items in a year for $1,800.
Renting Clothes is the Best Alternative
When you rent clothes from Armoire, your $1,800 annual budget gets you a rotating selection of designer items without the hassle or time wasted trying to sell your items. You can decide how many items you’d like to try every month and in a year you could wear almost 200 items if you exchanged all of your items every week. That is over $50,000 worth of clothing you don’t have to buy or sell. Since Armoire is growing rapidly, many items you rent will be new with tags. Regardless if the item is new, everything is ready to wear and freshly dry cleaned.
Renting with Armoire is the best way to access variety, value and sustainability. Stop buying and start renting. You can have a rotating selection of designer clothing to wear delivered to your door without the hassle of buying or selling.
Ten more reasons you should rent clothes here.