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Big Money In Reuse Business; Profits Double in Two Years

Tiffany Finley | Friday March 4th, 2011 | 2 Comments

Reuse comes before recycle when dealing with the Rs, and for good reason according to the skyrocketing profit and earnings statements from Winmark Corporation. Winmark owns four specialty reuse stores: Play It Again Sports, Plato’s Closet, Once Upon a Child, and Music Go Round. The company has reported nearly double in earnings this year, and almost 10 times as much from two years ago. Ringing in at a handsome 10.3 million for 2010, 5.85 million for 2009, and 1.14 million in 2008, it is fair to say the reuse business is doing quite well.

The increase is attributed both to expansion and increased store sales according to Winmark Chairman and CEO, John Morgan. Yet the rise in reused goods comes as no surprise given the state of the economy and the drastic increase in environmental awareness over the past five years.  As individuals trade in their newer items to get cash quicker, reuse stores are rising to the ranks for affordable items that are in good shape and in style. In fact, several reuse stores’ price tags put Wal-Mart’s low prices to shame. Other higher end stores that carry reused designer clothes are also seeing an increase in interested buyers. Just this past year, Goodwill, which currently operates both Goodwill Stores and Goodwill Outlets, opened a more refined reuse store for fashion and accessories called Second Debut.

As for the reuse industry, these profit numbers signify something deeper. Individuals are shopping at reuse stores for both thrift and to keep items out of the waste stream, creating the perfect solution for shopping during a down economy and an environmentally-critical time in human history. Purchasing reused goods creates a plethora of positives, from reduced ecological impact to an increase in jobs that are fair and equitable. It is estimated that that 10,000 tons of materials create 1 job at the incinerator, 6 jobs at landfills, 36 jobs at recycling centers, and 28-296 jobs for the reuse industry according to the US EPA and the Institute for Local Self Reliance.

Of course for every happy ending there is always a slight catch. Since nothing is a perfect system, reuse centers can only contain a small portion of all of the excess “stuff” we produce. Winmark’s business model is particularly geared toward success because it deals with items that not traditionally toxic, whose quality is easy to quickly distinguish, products that are for the most part small in size and in consistent demand. Yet in our consumer-oriented society there is a multitude of disposable items that slip through this closed loop system and on to the landfill. Recycling hazardous waste requires extensive amounts of permitting and ample quantity to justify as a business venture. Hence, a great deal of electronic waste is shipped elsewhere to be disassembled and recycled. Winmark’s success could prove to be a valuable model for future efforts in diverting items out of the waste stream into usable, and desired items down the road.

If you are interested in learning more about this company and their business model, visit Winmark Corporations website, or any one of their reuse stores. Play It Again Sports for used sporting goods, Plato’s Closet for stylish clothes and accessories, Once Upon a Child for kid-specific items, or Music Go Round for, well music! If you would like to follow their company’s stock, visit Nasdaq: WINA. They are headquartered in Golden Valley, Minnesota.

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  • http://www.cose.org/blog Tim Kovach

    It is good to see that the reuse industry is succeeding in (or perhaps in part because of?) the difficult economic times. As you mention, there is a tremendous potential for job creation & wealth generation from increasing reuse and recycling. In Cradle to Cradle, McDonough & Braungart point out that for industries which rely on extractive, virgin materials, 25% of the labor & 75% of the costs are associated with extraction costs. The remaining 75% of labor occurs in the rest of the product cycle, but only 25% of the costs are housed here. Thus, if products were reused and recycled more readily & easily, there is tremendous potential for job growth from shifting resources to more labor-intensive areas. Hopefully this trend will continue.

    - Tim Kovach,
    Product Coordinator, Energy Programs at COSE
    http://www.cose.org/blog
    http://www.twitter.com/COSEenergy

  • http://www.rootedinsustainability.com Tiffany Finley

    Excellent point, Tim. I am a big fan of Cradle To Cradle thinking as well. Do you think that this may also provide incentives for consumer product companies to build longer lasting products? Since items are being reused more often, durability and quality of work start to dictate what clothes, furniture, and other items will cycle back through the system. With an expanding consumer market for reused items, it would be interesting to know how much brand name recognition plays a role in first purchasing reused goods, and then how much of that filters into the association of a brand’s quality for new purchases as well.