The Used Clothing Story

1990

How I found a good business not to be in

written 2010* 1215 Words*

#170 By Howard Yasgar

One day, I was having breakfast while reading the Miami Herald newspaper.

There was a frontpage story about a fellow who was getting rich by buying used clothing from Goodwill and the Salvation Army.

The article said he was buying clothing by the pound for next to nothing, and then he was selling it for big money.

According to the newspaper story, Goodwill Co. and the Salvation Army receive more donated used clothing than they can sell in their own stores, so they bail it up and sell it to whoever wants to buy it.

I had always known that there was a tremendous market out there for used clothing, especially in the Caribbean and Central and South American markets.

At the time, I was in the automotive parts business in Miami, but now I wondered how come I wasn’t in the used clothing business also, it sounded like an easy business to be in. As a matter of fact, it appeared to be a business almost too good to be true, I could become rich like the guy in the newspaper article.

So, the next morning, my partner Don and I drove over to the Salvation Army.

At the Salvation Army, we saw that the used donated clothing was coming in by the truckload, and they had a very efficient assembly line set up to process it.

As the used clothing moved along on a conveyor, Salvation Army employees picked out clothing they thought would sell in their own retail stores, and all that clothing was immediately pulled out, put on hangars and hung on racks with a price tag firmly stapled on them. I think that the employees were also checking pockets for money.

The rest of the used clothing continued down the conveyor, eventually dropping into a hole in the floor and down into a giant baling machine located on the floor below.

Then we went downstairs where all the bales of used clothing were stacked up.

I asked the price, and they said it was only 12 cents a pound.

I couldn’t believe that used clothing was so cheap, I was already thinking about all the money we were going to make.

Back at our company, I cleared out a large area in one of our warehouses and then I set up four or five tables to sort clothing on.

My partner and I went back to the Salvation Army and we bought three 1200-pound Bales of clothing for 12 cents a pound.

The first problem was that we hadn’t considered the transporting of the bales to our warehouse, so we started calling trucking companies.

The best price to deliver 3 bales was $150.00, we thought it was expensive, but I was confident we would make it all back as soon as we started selling the clothing.

When the delivery truck arrived, we realized there was no way for us to unload the Bales, they were just too heavy, and they were as wide as the inside of the truck was.

So, I called over to all our employees to help, and it took them over an hour to drop the Bailes off the back of the truck and onto the ground, but we did it.

Once they were on the ground, we had no way of getting them into our building.

It took another hour for everyone to push and pull to get the 3 bales inside the building.

That’s when I stopped trying to calculate how much money this was all costing us.

The next day, I went to the building with a pair of metal cutting pliers, I wanted to cut open the steel bands

on the bale of clothing.

As I cut the band on the first bale, there was a loud poof noise and the bale exploded into a mountain of loose clothing that nearly knocking me off my feet.

I never realized how many types of clothing there were in the bale.

There were dresses, pants, shirts, coats, baby clothes, underwear, winter coats, and loads of polyester dresses and shirts.

I was just overwhelmed with so many different types of clothing.

As I continued sorting, I wondered where all the good saleable clothing was, I couldn’t find anything that looked good, and not only that, but some of the used clothing wasn’t even washed.

I went to the yellow pages and found there were several used clothing dealers in Miami. So, we decided to go and visit some of them.

I started asking the clothing companies lots of questions, most of the people were tight lipped, but a few talked to us.

They all said there was no market for polyester, and there is no market for dirty clothes unless you wanted to set up to wash them, so that meant they had to throw most of the used clothing they bought in the trash.

I then found out that throwing clothes in the trash also costs quite a bit of money, it was money that I hadn’t expected to spend.

I spoke to my daughter in Connecticut, she said she just had a garage sale, and had sold all the baby clothing she had.

I was excited, because I had lots of brand-new baby clothing. So, then I put together a 100-pound bundle of the best baby clothing I had, and I paid to have it shipped to her.

Then one of my employees, a nice young fellow from Nicaragua said his mother in Nicaragua could sell all the jeans if we could ship them to her.

The problem was, it cost a fortune to ship to Nicaragua by air, and shipping by ocean it could take forever.

There were several other problems, like having to pay duty in Nicaragua and then also paying off custom inspectors.

But our employee said he could do it all for us.

So, we paid to ship several bundles of used jeans by air freight, and we also sent the young boy to Nicaragua on the same plane. Don’t ask, but the cost to do all this was horrendous.

Once in Nicaragua, our young fellow called and said the Jeans were selling like hotcakes, but there was a problem.

His mother was being paid in local Nicaraguan currency, so every evening he had to negotiate and sell the local currency to get U.S. dollars, that became another costly problem, because no one wants Nicaraguan money.

The next call from him presented a bigger problem, the Jeans that they had left were all unsalable, because the waists sizes were way too big.

Nicaraguans are small people, the Jeans we had were American waist sizes that were too big to be sold there.

While we were deciding what to do about it, I received a letter from Poland.

I couldn’t believe it, but they wanted heavy winter coats, and we had plenty of them and all were like new.

We had so many heavy winter coats; I was going to throw them in the trash.

I pulled out 50 pounds of the nicest and heaviest winter coats I ever saw; they looked like they came from Alaska, then I shipped them all to Poland.

In the meantime, my daughter said no one wanted the baby clothing I had sent her, and she was throwing it all away.

Next, my Nicaraguan employee flew back to Miami, leaving all the oversize jeans there with his mother.

Then a letter came from our customer in Poland, they said the winter coats I sent were too light, and not heavy enough for winter in Poland, they wanted their money back.

Then came the final indignity, I had to pay the trash company to have all the remaining bales of used clothing hauled to the dump.

So much for getting rich in the used clothing business.