LIVINGSTON, Guatemala- “It is difficult to sell clothes here because the government gives it away for free through the churches,” a Guatemalan lady who resells used clothing on a street corner of Livingston basically told my wife, Chaya. But this clothes vendor has an interesting business model: she travels to Los Angeles, buys clothes from thrift stores, and then carries them back to Guatemala to resell. Her husband lives in Los Angeles, and she travels there often, bringing back new clothes to resupply her sidewalk store.
The lady said that if she buys a skirt from a Los Angeles thrift store for $5 that she needs to sell it in Guatemala for $7, which adequately explained the inherent price markups of her merchandise.
After browsing for a few moments, Chaya walked away from the clothing ranks that took up the entire corner of a sidewalk in Livingston.
“I’m not going to pay $7 for a skirt in Guatemala,” Chaya spoke.
From what the merchant told her, it seems as if this sentiment is widespread here.
The well worn models for import/ export, in which people travel to developing, cheaper countries, buy goods, and then transport them to more expensive countries to sell at a profit, may be coming to an end — or, at least, it is changing. The clothes vendor’s model works in reverse of what has become the global standard of merchandise movement: she skims unwanted goods of the top layers of excess in an expensive country and then tries to sell them as designer merchandise in a more isolated location of the world. I am trying to work out the logic of this exchange, but the dollars and cents do not initially add up — there is an income differential between the buying and selling location that does not exactly reek of profit. But this business model is the future.
If a person could identify an unmet demand for goods in a poorer country that are sold in excess in a richer one, then I am sure that a profitable business could ensue. I have noticed that many goods are sold far cheaper in the USA than in many far cheaper countries. A person COULD buy goods in the USA, transport them to a country like Guatemala, and sell them for a profit, but the goods would need to be what people cannot ordinarily obtain through ordinary means.
There is a massive charity infrastructure in Guatemala that takes clothing donations from the USA and distributes them around the country for free. There is also the Ropa Americana chain of stores throughout the region that receives their stock from Goodwills in the USA, and then sells them for a reasonably price in Guatemala. Nobody is going to pay money for something they can get for free, but if someone was to sell basketball team jerseys, do-rags, shiny diamond costume jewelry, baggy jeans, hair extensions, or other types of apparel that are highly sought after in this region of Guatemala, then the profit margin of this type of import/ export business could make itself known.
In my opinion, this is now probably a better business trying to sell used products from the USA in Central America than trying to do something like buy cheap silver in Mexico to sell in the USA. The days of going to cheap countries to buy a stock of goods that can be sold for shear profit in the USA and Europe may be on the decline, now is the time to travel the opposite direction. I once went to Rajasthan in search of silver jewelry to bring back to the USA to sell. The jewelry that I found that was of immensely low quality, and the vendors wanted prices that extended beyond that in the USA: it became apparent to me that I could by a commercially imported piece of Rajasthani silver cheaper in the USA than I could in Rajasthan.
The pinnacle of the current age of commerce is selling to the developing world. Countries are developing for a reason, and it is, apparently, to buy cell phones, SUVs, TVs, single family homes, and The rule of this age is to buy, buy, buy, things, things, things. Well being is based on buying power, all of the world is now a player.
There is a wave of “thing” mania that has stretched over the globe, the cell phone phenomenon shows how it works clearly. Everybody, or nearly everybody in the world wants a cell phone, it is something that everyone can agree on — we all want hand held phones. Within a decade, businesses mobilized to provide cellular infrastructure to a surprisingly high amount of the world’s populated surface area. The cell phone companies also made sure that they could sell their products cheap enough so that just about everybody could afford to buy and use one.
Now, almost wherever you go on the planet, a very high percentage of people have cellular phones. Even people who seem very poor in very poor countries have cell phones strapped to their hips. This happened in the span of a decade, this was truly a global phenomenon.
The central tenants of globalization is to make every person on the planet a consumer. The object is to raise living standards of the global village just high to enough to make each man, woman, and child a customer. I do not think this lady selling used clothes that she imported from the USA is nuts, rather, it seems as if she is onto something.
I may have been better off buying Rajasthani jewelry wholesale in the USA and re-exporting it back to the source.
(Photos to be included later, cell coverage in current location not adequate for full publishing)