Archives: Seasons 1-5
Segment | Economy

Thrift Economy

These days, most everyone is looking for ways to save money. But many people are also looking to make money. When the economy shrinks, what’s known as the informal economy swells. Legions of scrappy entrepreneurs make their way in an industry that operates beyond the four walls of conventional commerce. It's a little known world where people buy and resell used goods. And when times get tough, their business starts booming.

These resellers buy their merchandise at any number of places. But one of the best sources is auctions. Storage facilities auction off the contents of individual units when people don't pay their storage bills. Banks auction off abandoned property in foreclosed homes. Businesses auction off furniture and supplies when they go out of business. And because foreclosures and liquidations are on the rise and people are having trouble paying their bills, there's a lot more auctions taking place.

That's good news for Dan Dotson and his company, American Auctioneers. He's a third generation California auctioneer with 34 years experience. His business is up 20-25% over the last year. And he's working hard six or seven days a week to run as many as five auctions a day across Southern California.

While the number of auctions has increased, so has the number of people coming to buy. Dotson is seeing more and more buyers trying to enter this resale economy as a way to make extra money. But the pro resellers who've been doing this for awhile say even this unconventional system is impacted by the bad economy. And they've had to change the way they do business in order to survive. Consumers are more careful with their money, so most resellers are focusing now on cheaper and more basic merchandise.

Because that's the kind of stuff selling these days, times are good for thrift stores. The Los Angeles based thrift store chain Out of the Closet has seen an increase of 9% over the last year. Consumers are realizing one of the best ways to save money: stop shopping retail and start shopping resale.


RELATED RESOURCES:
American Auctioneers
Out of the Closet
Glendale Community College Swap Meet

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"The Thrift Economy" story of the lady who was buying back her own property reveals how materialism/consumerism obsession penetrates all levels of the U.S. social class system. The lady had bought things for which she had insufficient space in her home. So she rented storage space to store her surplus possessions. She did not have sufficient funds to continue
paying rent on the storage space and the company seized her stuff and put it up for auction. In the piece she was buying back her own possessions for which she could not pay storage and had insufficient space for them in her home.

This deadbeat renter made no sence trying to buy back her stuff she lost for not making rent payments. A lot of times it cost u more time and aggervation then what it's worth. Them other bidders will bid it up on her sometimes costing A lot more then what she owed to begin with. I also pay rent on storage. I make sure they get paid every month even if I pay late cuzz I don't want no 1 bidding on my stuff.

The recession has people in a frenzy to repair credit, especially since the mortgage market all but collapsed, but the lower prices in the Western U.S. have been driving prices up. There may be signs that the market is beginning to correct itself in a display of good, old fashioned, supply and demand. In the western U.S., home sales climbed 13%, whilst prices dropped 26%. It’s the most basic of economic principles – as the supply increases, with the increased number of foreclosures and the decreased availability of credit, the demand drops. Eventually, the decrease in demand drops the price to a point where it stabilizes against the supply, and the system equalizes itself naturally. The western states are beginning to normalize, but the overall American home sales are still down about 11% - as the eastern states have been a bit slower to equalize to the demand curve, but they ought to sort themselves out soon enough.

You are right. Being thrift consumers is vital to the economy in these times of recession. Saving money is an important attitude nowadays. Although recession is an ugly thing to contemplate, we cannot think anything but to accept the reality that changes in our world really exist and we must do something to resist the changes. A lot of people suffer during a economic downturns, with a down economy and loss of jobs; it can certainly feel as though Armageddon is on its way. Armageddon probably isn’t on the way. Some people can still qualify for a personal loan to weather a personal recession of cash due to a sudden expense. If you need a personal loan of some kind, first you better have a job, and second, do all the appropriate research and make sure you’re not getting signed up for funds from a company that will essentially own you and your house, car, arm, leg, and first born until the world ends. The best thing to do is keep your head up and stay active in whatever you need to do to weather a recession.

This is not going to make it, but there is a old fashioned way. But sometimes they spend the money to buying stuff at the swap meet. It's very cool.

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