‘Pre-owned’ market rising on hard times

Image courtesy stock.xchnge (bizior)

Image courtesy stock.xchnge (bizior)

People are buying and selling more expensive second-hand goods, as rapidly advancing technology drives the consumer’s desire to own the latest gadgets, while obvious financial pressures limit the amount of disposable cash available to fund these purchases.

Marketing manager for Cash Crusaders Alaine Rossouw says the quality of goods coming into their stores are of a much higher value, indicating that more affluent people are selling goods for cash. “I don’t think they are selling these goods because they plan to go without them, but because they want to upgrade or make money from items they’ve been hoarding, rather than give them away,” she explained. “We’ve always traded very well in a downturned economy.”

Cash Crusaders and rival Cash Converters confirmed that most of the goods being traded are electronics, including iPads, iPods, smartphones, laptops and flatscreen TVs. “We have a high turnover of cellphones and the market we sell to, with an average household income of between R11 000 and R14 000, tends to have more than one cellphone,” Rossouw said.

Richard Mukheibir, chief executive of Cash Converters, said the average value of products that the store is selling has doubled over the past five years. Although inflation has contributed, Mukheibir said that primarily, the quality of products has improved. “As technology enhances, the goods we are buying and selling are of a higher quality. Apple products barely featured five years ago, now we are trading in iPads, iPods and smartphones, which have a significantly higher average value.”

He said Cash Converters does most of its business in the LSM 6 to 10 range. “This portion of the market has more disposable income, more products to buy and sell and is more conscious of the technology they are using.”

Losing its stigma

Mukheibir said that the stigma of buying second-hand had largely been driven out of peoples’ minds. “Money is so tight these days. Everybody is looking for value for money, whether you live in LSM 2 or 12, because expenses have increased.”

“Many people don’t want to be seen walking into a Cash Crusaders, but I think people will worry less about their social status this year and more about the weak rand, rising interest rates and the repayment of debts, which will be positive for a business like ours,” Rossouw said. “We have become more acceptable and selling goods second-hand seems less messy than it was perceived to be before.”

Online shopping and the advent of websites like Gumtree have further bolstered trade in second-hand goods, helped along by improved internet access and increased smartphone use.

CEO of online marketplace bidorbuy, Jaco Jonker, explained that the low costs involved in selling products online to a vast number of potential buyers translates into lower selling prices.

“I would say that when times are tough, price definitely plays a much bigger role in the purchasing decision and leads to an increased uptake in platforms like bidorbuy.”

Commenting on online trade, CEO of the accredited Second-hand Dealers and Pawn Board Tom Fuhri, said he expects that trade over Facebook will soon far exceed trade across Gumtree, for instance. “Facebook is area bound and restricted to a circle of friends, making it more accessible and trustworthy,” he explained.

He said that in Potchefstroom, where the Board is based, there are close to 200 general second-hand dealers, with 69 second-hand cellphone dealers in Randfontein alone.

“We are led to believe by the SAPS that the industry has in excess of 10 000 registered general second-hand dealers. This excludes the second-hand motor and recycled metal trade, which is enormous,” Forshaw noted.




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