Spring-clean your closet and make money
We have all been there: standing in front of our closet or dresser drawers, looking at the contents, and waiting for something to emerge. That surprising dress or just-so shirt. That pair of pants that fits like it was tailored. That pair of shoes that is the sort of pair of shoes people refer to when they advise their friends to judge others on their shoes.
Once in a while, a surprising, just-so, tailored-seeming, universally impressive article of clothing appears, though rarely of its own volition. The rest of the time we just stare.
Maybe it's time to go shopping.
Or maybe it's time to clean out your closet.
Last week, I spoke to Tracy DiNunzo, serial entrepreneur and savvy founder of Tradesy.com. She delivered one of those stunning statistics about halfway through our call: most women (her business focuses exclusively on women's clothing) use only about 20 percent of their wardrobe each year. (One source has it at 30 percent, but still.)
What this means is that, not only are we spending a lot of money on clothes — in the U.K. that number is said to be about $1,000 a year — and in the U.S. figures of $125,000 over a lifetime have been bandied about — but we are also tying up a huge amount of value in our closets. IKEA says it's over $1,500, although I'll bet many could assess the retail value of their wardrobe at lots more than that. According to Tradesy, their clients have a whopping $12,000 in closet retail value. (Mine is probably more like $20k or $30k, but I do still have lots of my work clothes from my life as an investment banker.)
So we have what could be 70-80 percent of a quite high number sitting there, unused. That, said DiNunzo, is what inspired her to start her business. “If this is true, why aren't women selling and monetizing the other 80 percent? It's too hard,” she said.
Can I turn my closet into a profit center?
Ok, it's probably never going to be a profit center. (Unless you're super savvy at yard sale and thrift shopping or have a ton of hand-me-downs.) But your closet could pay its own way, especially if you haven't done a purge in a while.
We've covered closet cleanouts before, so I'll be brief on the how-to:
1. Divvy. Mark out some time in your calendar, preferably a weekend or an evening. If you can, says DiNunzio, “grab a friend and some champagne and some music — cleaning your closet is a miserable thing, and you may as well make it fun.” She recommends (and I do, as well) having someone with you to help you make decisions; “we're not as objective about our own closet,” she says. Go through everything and make four piles of clothes/shoes/accessories:
- 1st pile: Hopelessly torn or worn out or stained clothes. Make them into rags, or if they are synthetics, throw them away.
- 2nd pile: Clothes that are not in sellable condition, but still wearable. Donate these (I love the non-profits which provide clothes to low-income job-seekers, single parents and the like) or save for your next clothing swap.
- 3rd pile: Things are in great condition, but not for you. Maybe you wore it a few times and found it uncomfortable or unattractive on your body, or maybe you never even wore it at all. Sell these.
- 4th pile: Clothes in good condition you love and wear. Keep them!
According to DiNunzio and other closet organizing types, you should have a goal of “purging at least 50 percent of what you've got; your keep pile shouldn't be more than half of what's in your closet.”
2. Sell. The thing about selling clothes is that, while I would never suggest spending a lot of time shopping and a lot of budget on designer clothes, the better quality (and more recognizable brand name) your clothes are, the higher percentage of retail you'll be able to get when you sell them. But there are also ways of getting back your value (or better) if you shop at thrift stores or yard sales (or, yep, even free boxes). Here's how I'd do it:
- Designer clothes, especially those purchased recently, should be sold on a site like Tradesy or eBay (if they're men's clothes). DiNunzio makes it sound really easy and I'm eager to try it out: “hang them one by one on a hanger, shoot a photo, add a few words; we make a pricing recommendation, we clean the background off the image,” she says. Then once the item sells, Tradesy.com will send you an already-addressed package to mail it off in. (This is my favorite part of her business!)
- Thrift store finds or older clothes in good condition could be sold on Etsy. I have a friend whose career is finding great pieces and reselling them on Etsy; she gets very high value compared to what you could at a yard sale.
- Low-value brands and casual clothes should go in a yard sale or rummage sale. Often, $1 or $2 is the most you could get for a pair of kids' sweat pants or a cute Target t-shirt you don't wear anymore. But they may have only cost you $4 or $5; not really that bad of a resale value.
3. Systemize. I've heard this advice before (never used it, but I admire it greatly!): separate and restock the closet with the clothes you're keeping, putting them all the same direction on the hanger and shoved to one side; theoretically, you'll have plenty of space! When you wear something and put it back, move it to the back and turn your hanger around. At the end of the year, the things you've never worn can go up for sale, too. Do it all over again!
How much do you spend on clothes each year?
DiNunzo surprised me when she said her surveys show their customers actually spend more each year on clothes while using Tradesy actively, by about 20 percent. My own spending depends a lot on how much I'm taking in; in years when I'm making upwards of $40k, I'll spend $1,200 or so on clothes; other years I spend as little as $200, mostly in socks and running shoes. (I'm a sucker for pretty wool socks.) When I don't have a lot to spend, I get most of my wardrobe from clothing exchanges, free boxes and thrift shops.
So I'd love to know from our Get Rich Slowly audience, who probably spends far less than the typical shopper: how much do you spend each year in clothes?