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Is Charity Shop Flipping Immoral?

Writing about the financial sector, lean manufacturing, and life in general.

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What Is The Charity Shop Model?

The way charity retail works is an important factor here. Most of the larger charity retail businesses have a similar model which I'll explain here. This will help people to understand why eBay / Depop flippers are actually crucial to the charity shop ecosystem, and why, if you're debating whether to flip from charity shops, you can do with a clear conscience.

So, just to set the scene. A few months ago my girlfriend answered an online post from one of the regional children's hospices. They have around 7 or 8 retail shops in the north of England. The post was asking for volunteers to spend time at their distribution center where they sort through the bags and bags of donated items. They separate the items into sellable things, and unsellable things. Then they sort into categories like clothes, children's items, household items and so on. Once sorted, the items are then distributed out to the retail shops to be displayed and (hopefully) sold.

My girlfriend was shocked at the number of items and clothes at the distribution center that needed sorting. Around 15 volunteers turned up that day (like most days). She came back after a full 8 hours and was slightly deflated that the team of volunteers didn't even make a dent in the sorting that needed doing. In fact, there was more there when they actually started because they have vans collecting drop-offs from the shops and taking them to the distribution/sorting center and added to the pile.

Why the Model Is Important

All this dictates the most efficient business model for the charity, which is turning items over as quickly as possible. The first thing you need to keep in mind is they simply don't have the time to properly price the items up. They can't process the donations quickly enough as it is. They certainly don't have the time to check each item online and hazard a guess at a fair market value.

The second thing to keep in mind is that they don't pay for the items and they have warehouses full of them. So maximising profit per item isn't actually logical. The only practice that makes sense here is to find the sweet spot in pricing for each category to ensure they get the items onto the shop shelf and sold as quickly as possible so the next batch can be brought in and sold.

They don't care if they have a woman's jacket that RRPS's at £150 or £50. All they want to do is get the item on the clothes rail and sold as quickly as possible to make room for the next item. They know that pricing that "practically new" £150 jacket at £60 means it'll sit on the rail for considerably longer than if they priced it to move at £10. Having a jacket that sells for £60, sat on the shelf for 5 months is actually costing them money. They could sell 200 items at £10 each during that time.

You have to remember here that the shops are the bottleneck in this operation and the most efficient way to remove the bottleneck is to price the items down and sell them as quickly as possible.

So you can see from the above that the name of the game is purely to move items as quickly as possible.

The point of the article is to address the debate that "flippers" are somehow taking profits from the charities or denying someone an item they wouldn't normally be able to afford isn't true. We can see that the charities have zero chance of running out of donated items for the people who genuinely need them. And we've also demonstrated that the flippers are keeping the items moving off the shelves and money flowing into the cash registers clearing space for the next batch of items to be sold. So the fact that someone sold on a jacket for double the profit is irrelevant. The charity shop was never going to sell it at the same price as the flipper did.

It's also worth adding to this that these eBay / Depop flippers aren't predatory or taking advantage. They are people who are either trying to make an honest living or are supplementing a wage. The second-hand market is worth hundreds of millions of pounds and if it wasn't for these flippers then millions of tons of unsold items would end up in land-fill as the charities simply wouldn't be able to keep up with it all.

They're also keeping a lot of niche markets alive. So many vinyl records, VHS tapes, and vintage consoles are sold to enthusiasts that would never normally be able to find these items in regular stores and websites.

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