The scene is calculated and efficient.
Dozens of employees sort and measure clothing. Several feet away, photographers flash photos of the best items. Still farther down the line, other workers pack the clothes to ship to buyers.
To someone who didn’t know better, this open-space, 116,000-square-foot warehouse could be an Amazon distribution center. But it’s not. It’s Goodwill.
The E-Commerce Center, operated by Goodwill Industries of Monocacy Valley (GIMV) on English Muffin Way, has been open only since the fall of 2018. But GIMV’s business plan to collect and sell donations nationally online has brought big revenue increases and has helped change the financial future of this nonprofit from a gradual decline to a bright future full of possibilities.
Before the center opened, GIMV had no revenue from online sales. This year, its online revenue was $4 million. Online sales has helped bring GIMV’s total revenue from less than $2 million in 2015 to $16 million in 2019, Chief Executive Officer Michael Meyer said. With online shopping consistently on the rise, tapping into the market was important to upkeep Goodwill’s mission.
“Why we’re doing this is to stay relevant. Our funding source for our programs is our retail operation. That retail operation has to stay relevant with the buying habits of consumers,” Meyer said. “And if we do not do that, we will lose market share.”
Resale is becoming the fastest-growing segment of retail. In 2018, consumers spent $24 billion on resale items. That number is expected to grow to $51 billion by 2023, according to a report by ThredUP, the leading online consignment shop. More and more of that shopping is happening online, which sets up a huge opportunity for Goodwill.
What sets the nonprofit apart from its competition, however, is its mission to provide job training and help people gain employment.
“For every two items sold on our platform, it equals one hour of training,” Meyer said. “Not only are we creating jobs but we’re also taking the net out of the sale item and [putting] that back into job training programs.”
In recent years, GIMV has received funding from the state and federal levels in order to provide job training to people with disabilities, through the Developmental Disabilities Administration.
“As we get better at doing that and have more opportunities to not just create a job but to create skills training, we get more referrals,” Meyer said.
But besides those revenue streams, selling donations is the top priority for keeping Goodwill’s operations going.
“First and foremost, my responsibility is to make sure this organization is positioned to best maximize the revenue from the goods that are donated to us that can get put back into programs,” Meyer said.
The E-Commerce Center — which had a ribbon-cutting ceremony on Thursday — helps maximize that revenue, by allowing them to sell goods faster and at higher prices.
More sales, higher pricesThe move to E-commerce has provided Goodwill with several opportunities. First and foremost, there’s plenty more opportunity to sell. An item has a 30 percent chance of being sold in a Goodwill store, but a more than 90 percent chance of being sold online, Meyer said.
A used coffee maker that was worth $200 and donated in good condition was placed for sale in a store for $7. After four weeks with no sale — the maximum amount of time an item can sit — it was placed at auction on the website, with a starting price of $9.99. It sold a few days later for $36.
“I have to be hoping someone walked into my store on a given day where a coffeepot was there and they needed it,” Meyer said. “And that’s a very small number of people who would walk into the store, versus, I put that coffeepot online and I have millions of people looking at it.”
Items on the website are seen by more people than those that sit in the store. Over a four-week period, an item in a Monocacy Valley Goodwill store will be seen by 14,812 people. Over the same period of time, it could be seen by over 4 million people online. And better yet, it doesn’t have to be pulled off the shelf after four weeks. It can stay for up to two years.
Items also typically sell at a higher price online — another opportunity for increased revenue. The average price of an item sold in the Monocacy Valley stores is $4.60, while the average price of an item some from Goodwill’s E-Commerce Center is $19.84.
A response to AmazonAlthough the E-Commerce Center didn’t open until last year, Goodwill International established its online shopping site in 1999. The site was originally a response to eBay, which opened up the world to online resale, and consumer-to-consumer sales.
“One of the first misses, and probably still to this day, the largest miss for Goodwill, was eBay — eBay should have been gBay,” Meyer said. “We already dominated the thrift marketplace. What we didn’t have was the direct connection between the consumer to consumer, which is what eBay created.”
Now, Goodwill has yet another giant to respond to: Amazon. The company allows for the sales of used goods, connecting thrift shops with shoppers across America. The E-Commerce Center is a response to that challenge.
In addition to providing online shopping, Meyer has had a commitment to improving the store experience.
“I want our Goodwills to be the equivalent of the Nordstrom experience. Not in price, but the experience. That you came in, you felt good, the store was alive, there was energy, there were people taking care of you,” Meyer said. “I believe we should be providing that same type and level of service.”
In the future, he wants to hire stylists who can help curate clothing for customers, so they don’t have to wade through a ton of different clothes. He would also like to introduce furniture refinishing services, where customers can improve used furniture in-store.
For now, Meyer’s focus is the E-Commerce Center, but he hopes to introduce more in-store elements by 2020.
The processThe E-Commerce Center has also created jobs in the community. Seventy-eight people work there. Goodwill hopes to have 98 jobs at the site by the end of 2020, and 245 by the end of 2024.
Goodwill Industries of Monocacy Valley is the only Goodwill to partner with an organization called Give Back Box, which allows customers who make a purchase on websites such as Amazon, Nordstrom and REI to use the shipping box to send unwanted clothing and items back to be donated. The center has received 30,000 Give Back Boxes since their opening in 2018.
In addition to providing Goodwill with a national supply of goods, Give Back Box has also greatly reduced how many items end up in landfills.
When someone makes a donation to GIMV at a donation center or bin, about 60 percent of the items are unsellable. Goodwill then foots the bill to get rid of those items, at about 5 cents a pound, Meyer said.
However, when someone donates through Give Back Box — at an average of 16 items per box — only about 20 percent of the goods are not sellable. That saves GIMV a substantial amount of money on disposal.
“That is because of the act of intentionality. Give Back Box is asking you to go to your closet, get some things, and put it in a box, and then put it on your front porch and the postman will pick it up. Versus, if you’re donating at our back door, you’re typically doing what we would call a clean-out,” Meyer said. “Whether it’s seasonal, whether it’s the end of the school year, you’re just gathering a bunch of stuff, you’re putting it in a bag, and you’re bringing it to us.”
FedEx ships the Give Back Boxes to the warehouse, and the sorting and selling process begins. Employees are responsible for opening each box and determining what can be sold and what cannot. Anything that is sellable gets measured or weighed, and details about the item are filled out on a tag. From there, the item and tag are passed along to a photographer, who takes pictures of the item.
Then all of that information is passed along to “listers,” who list the items on the website. Each listing, from opening the box to being put on the website, takes about three minutes total.
Goodwill will be introducing automated software that will cut that time down to one minute. It lists about 2,000 items every day, and ships 400 orders.
The center has recycled about 15,000 pounds of cardboard and prevented 420,000 pounds of goods from winding up in landfills, which Meyer hopes to improve even more in the future as well.
“We’re looking at that triple bottom line, and not only having an impact on the lives of people through our mission support services, but also having an environmental impact,” Meyer said.