Unlock hidden value within charity shops

New technology could help charity shops get higher prices online for some goods, writes Trish Dromey.

For the charity shops which are set to receive a deluge of donations of unwanted gifts after Christmas, Dublin startup Thriftify has technology which can help.

It offers an e-commerce solution which is designed to allow the charities using it to achieve higher prices for higher value donated items by selling them online.

Since starting out last November by offering an online book selling service to charity shops , the company has used its technology to value 500,000 items and to sell over 80,000 of them online.

Thriftify cross-sells the item on its own website and on Amazon, eBay and other online retailers and also arranges collection and delivery by courier.

“Charity shops using our technology can increase their monthly profits by between 15% and 25%,” according to Thriftify co-founder and CEO Rónán Ó Dálaigh, revealing that the company’s customers include the National Council for the Blind in Ireland (NCBI), the Irish Cancer Society, Dublin Simon Community and Oxfam in Ireland.

“The system, now being used in 25 shops, operates by using intelligent algorithms which can value any item with a barcode and identify those with the potential to sell for higher prices online,” Mr Ó Dálaigh said.

Mr Ó Dálaigh said online purchasers are typically willing to pay higher prices than charity shop browsers.

This month Thriftify has launched a new version of its technology, which in addition to being able to value books, CDs and console games can now be used for second hand designer dresses.

The valuation of items with barcodes is relatively easy, but putting a value on second hand clothing is much more complex, said Mr Ó Dálaigh, explaining that the newest version of Thriftify’s technology uses machine learning and image recognition.

In order to develop technology capable of valuing all types of second hand clothing and also to expand into the UK, Thriftify is now fundraising.

“We have some investors lined up and expect to close the round in the first quarter next year,” said Mr Ó Dálaigh who is applying to Enterprise Ireland for High Potential Start-Up funding.

For Thriftify co founders Mr Ó Dálaigh, Rahil Nazir and Timur Negru setting up the company has not just been about creating a profitable business but also about sustainability.

“We’re a socially driven enterprise — by providing charity shops, which are one of the largest sources of sustainable goods, with access to wider markets we want to boost their income and create the go-to market for sustainable goods.

Mr Ó Dálaigh came up with the idea when he found a college book for €1 in a charity shop that cost €60 online. Believing that there must be thousands of other items being undervalued in charity shops, he decided to test the premise by conducting a trial with 1,000 books from an NCBI shop.

Finding that higher prices could be found online, he secured €50,000 Competitive Start Funding from Enterprise Ireland in early 2018 and hired a contractor to develop a minimum viable product to value second hand books. He also found his two co-founders to join him in the venture.

One year on from the launch last year, Thrifify has improved its technology and is making ambitious plans involving the sale of used clothing.

“After oil, fashion is the second most environmentally damaging industry on the planet — it causes mass pollution and creates enormous waste. Some 60% of new clothing is discarded in the first year,” said Mr Ó Dálaigh pointing out that charity shops provide a sustainable solution to help reduce this waste.

Thriftify’s goal is to establish itself as a leading global player in the world of sustainable fashion and used goods.

“Looking at the data we’ve collected so far, we believe our platform can be used to turn the €2bn bricks and mortar-based charity retail market in to a €20bn omni-channel industry.”

Thriftify is aiming to grow brand recognition and expand first into the UK and subsequently the US. Plans for 2020 including growing the staff size to 10 and signing up its first UK charity shops by the summer.