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Abstract
Are online markets replacing or remaking second-hand markets in cities? The restructuring of secondary markets in light of virtual outlets like eBay is not well understood. In this article, we describe secondary markets and their important historic, economic, cultural, and social roles in cities. The literature on e-Commerce suggests that virtual retailers compete with bricks-and-mortar stores and potentially displace them. We question whether the internet can substitute for second-hand stores, which have traditionally relied on a loyal and local customer base, personalized shopping experiences, and surprise encounters. Given the historically embedded nature of exchange, we focus on one large Mid-western city, drawing upon survey and interview data from Chicago retailers. Our exploration of supply, demand, and geographic practices reveals subtle and complex alterations in second-hand exchange, rather than a displacement of second-hand markets by eBay. We also find substantive integration, fluidity, and hybridization within and across market sectors. Rather than supplant the production of new goods, secondary markets are intertwined with and deepen primary markets, calling into question some of the presumed benefits of and meanings associated with second-hand exchange as well as the usefulness of categorical distinctions. [Key words: secondary markets, second-hand, resale, thrift, e-commerce, eBay.]
Acknowledgements
This research received financial support from the Urban Planning and Policy Department at the University of Illinois at Chicago. The authors wish to thank April Jackson, Jennifer Wichmann, and Megan LaFrombois for assistance with research and edits. We are also grateful to three anonymous reviewers for their productive comments on earlier drafts of this article.
Notes
1 Buy-and-trade refers to customers selling items directly to a store for resale. Consignment stores accept items from sellers, who agree to accept a percentage (typically 40–60%) of the sales price of the goods, if and when they are sold within a certain time frame. Vintage clothing is typically considered to be at least 25 years old and noted for the designer, styling, and fabric used.
2 NARTS numbers are based on industry mailing lists and inquiries received by the organization. The discrepancy between the two sources is likely a result of stores reporting under another NAICS category, thereby getting lost in the census (A.R. Meyer, personal communication, January 26, 2011). Used merchandise stores (NAICS 4533) are “establishments primarily engaged in retailing used merchandise, antiques, and secondhand goods” (USCB, 2007b, p. 339) including books, household appliances, clothing, and sporting goods. This category does not include pawn shops or any type of used vehicle or parts. The number of stores reported reflects those with employees; there are an additional 60,000 used merchandise “stores” with no paid employees (USCB, 2007b).
3 EBay has a variety of auction types available, the most common being the so-called “English” auction where a relatively low starting price is first provided by the seller and the bids increase until a specified length of time expires. Sellers pay eBay a fee for each listing as well as a commission for completed sales that varies based on the transaction price (Baron, Citation2002). EBay's format and business model have evolved over time to include selling items at a fixed price and also focus not only on trading, but also on payment and communication networks (Kopytoff, Citation2006).
4 While lower- and middle-class households tend to shop more for furniture and clothing at second-hand stores, higher income households tend to shop for antiques and trinkets.
5 The Council for Textile Recycling estimates that 2.5 billion pounds of post-consumer textile waste (which includes anything made of fabric) is collected and prevented from entering directly into the waste stream. This represents 10 pounds for every person in the United States, but it still only amounts to about 15% of the clothing that is discarded (cited in Claudio, Citation2007).
6 One study found that 68% of the income spent by consumers in locally owned businesses stayed in the city, compared to 43% of consumer money spent at chains. Moreover, 70% of residents surveyed indicated that they preferred traditional, diverse business corridors and to shop at locally owned stores (Civic Economics, Citation2004).
7 Urban residents comprise 84% of the United States population but account for slightly less than 50% of purchases (Black, Citation2007). This author also found that residents of the Mid-western states, many of which are predominantly rural, make more eBay purchases than any other region.
8 When the university redeveloped the street, the market was moved several blocks east. Morales et al. (Citation1995) estimated that the market's closing resulted in $3.2 million in lost income for vendors and $15 million in losses incurred by consumers.
9 Researchers tracked eBay item counts during February 2012 and found that men's and women's clothing accounted for 8% of all items listed on eBay during this time with gross item counts ranging from six million to nearly eight million on a given day. The category of “Clothing, Shoes, & Accessories” accounted for 15% of all items and consistently had the second highest number of items listed behind the “Parts & Accessories” category of eBay Motors.
10 Our research coincides with the global financial recession that began in 2008, so in some cases it is difficult to separate the effects of eBay from the broader economic decline that affected all sectors and industries.
11 Neighborhood clusters were determined by identifying groups of, at a minimum, five second-hand stores within a radius of 1,000 feet from each other. The maximum number of stores in one cluster was 24.
12 In both samples, women's clothing was the category sold most often, and consignment was the most popular method of sourcing items. Our Chicago sample consisted of smaller stores, with an average of 2.5 paid employees and only 1,000 square feet, compared to an average of 5 paid employees and 4,000 square feet for stores in the NARTS survey. The respondents to our survey were all sole-proprietorships; whereas the majority of NARTS survey respondents (59%) were corporations. This discrepancy could explain the smaller store size and number of employees. Finally, 34% of our survey respondents sold online compared to 23% of NARTS respondents.
13 From Buffalo Exchange's website. The website also notes that it “isn't a consignment store – it's quicker than that – if we accept your items, you can get cash or trade on the spot.”
14 Another observes: “The flea market is not as sterile as a mall…There's lots of different people around the flea market-it's more of a social atmosphere. … It's an event to go to the flea market” (quoted in Sherry, Citation1990, p. 19). These consumers often draw a line between articulating individual hipness and style through thrift and dressing entirely in second-hand clothes, which would signal poverty, and exclusion from first-cycle consumption (Gregson and Crewe, Citation2003). The difference here is choice: buying second-hand out of necessity is not the same thing as expressing one's individuality and knowingness through select consumption of second-hand commodities.
15 The critiques embedded in these movements are varied, but many point to the uneven and exploitative practices of global capitalism; the spiritual or emotional problems related to excess materialism; the depletion of local community and local economies; and the environmental degradation associated with overproduction and consumption (see Charbonneau, Citation2008; Clausen et al., Citation2010; Dickson et al., Citation2009; Elgin, Citation2010; Gregson and Crewe, Citation2003; Hess, Citation2009; also referred to as “voluntary simplicity”).
16 On its website Buffalo Exchange advertises that its stores “are located in the heart of progressive, urban neighborhoods, minimizing pollution, congestion, habitat loss and urban sprawl” (accessed January 6, 2012).
17 Take the example of “Allyson”, an eBay seller from Michigan whom we interviewed at the conference. Allyson began her eBay business by scouring garage sales, selling her own possessions, and selling for her family and friends. She also attended Pottery Barn and other store closeouts, and resold these goods on eBay. When we met Allyson, she was looking to make her supply chains more consistent and was searching out new, trendy product lines that she could sell after purchasing from a wholesaler.