Tariffs can impact the resale market in various ways, often creating opportunities for secondary markets to thrive including big and small consignment business owners. Aside from using efficient consignment software for your resale business, here’s how tariffs can help the resale market across different countries:
1. Increased Demand for Pre-Owned Goods in Consignment
When tariffs raise the price of new goods (e.g., electronics, luxury items, or clothing), consumers may seek more affordable alternatives in the resale market. This benefits resellers who can offer lower-cost, pre-owned, or refurbished options.
2. Boosting Domestic and Local Resale Business Owners
High tariffs on imports encourage consumers to buy from local or domestically sourced resale markets instead of purchasing new foreign-made products. This helps small businesses, thrift stores, and consignment shops flourish.
3. Higher Value Retention for Luxury and High-End Goods
Tariffs on luxury brands (handbags, shoes, watches, etc.) make new imports more expensive, increasing demand for pre-owned versions of these goods. Resale values of high-end items remain strong, benefiting second-hand marketplaces.
4. Encouraging Circular Economy & Sustainability
As tariffs drive up costs for newly manufactured goods, more consumers and resale business owners turn to refurbished or second-hand options. This extends product lifecycles and promotes sustainability in fashion, electronics, and other industries.
5. Expanding Online and Cross-Border Resale Markets
While tariffs affect new goods, online resale platforms can bypass some trade restrictions by facilitating peer-to-peer sales. Some countries with high import tariffs see growth in domestic online resale marketplaces (e.g., The RealReal, StockX, Poshmark).
6. Incentivizing Bulk Purchasing for Resale
Resellers may import products in bulk before tariff increases, creating inventory that can be sold later at a premium when new goods become more expensive. This can create arbitrage opportunities in certain markets.
Canada imposes high import duties on luxury goods, including handbags from brands like Chanel, Louis Vuitton, and Hermès. A new Chanel bag purchased in Paris or the U.S. may be significantly cheaper than one bought in Canada due to tariffs and import taxes. This drives demand for pre-owned luxury bags on platforms like The RealReal and Vestiaire Collective, as buyers look for more affordable alternatives within Canada.
On the same note, the U.S. imposed tariffs on Chinese-manufactured shoes (e.g., Nike, Adidas, and Yeezy) during the trade war, increasing retail prices for new sneakers. As new sneaker prices rose, the resale market on platforms like StockX and GOAT surged, with buyers turning to second-hand or limited-edition sneakers as investment pieces.
Mexico imposes tariffs and restrictions on the import of new foreign cars, making them more expensive. However, used cars from the U.S. can often be imported at lower rates. This has fueled a booming resale market for second-hand American vehicles in Mexico, especially in border states like Baja California and Sonora. Buyers often prefer used cars over new ones due to price differences.
Each country experiences unique effects, but the overall trend remains the same: higher tariffs on new goods make resale markets more attractive to consumers.
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