Working Capital - Mission Blog

<<Mission Blog Home Posted: 06-23-2021

It seems that almost every day we drive down the street and notice a new business that’s opened in the nearby strip mall or taken over a space vacated by a business that closed. It seems so common that we don’t think twice about it. But what seems mundane actually requires quite a bit of work. Every retail business is set up uniquely to help reflect brand consistency, shopper and curb appeal, and the type of product(s) they are selling.

Goodwill is no different. We are also unique in that our stores require space to donate product in addition to selling it. This poses all kinds of additional challenges because not every retail location offers the type of ingress and egress necessary to manage the traffic flow.

Goodwill also has to consider locations very carefully. Given that Goodwill is a nonprofit charitable agency that sells donated goods in order to fund our mission services, the common misperception is that the best location for a Goodwill store is in low-income communities. However, it’s actually just the opposite.

Years of research shows that Goodwill shoppers are very intuitive. They know that if a store and donation center are set up in higher-income communities, the store will likely receive better quality donations, which means better merchandise to buy. Goodwill shoppers are far more likely to drive several additional miles in order to shop in a store with a better selection than in a store that may be closer to them but in a less affluent area.

However, donors are not as flexible with their driving time. Donors are motivated by doing good, but also by convenience. A donation center that is closer to them will often become their location of choice. If that donation center is in an affluent community, then residents of that community are more likely to donate there. That’s why Goodwill actually prefers to set up stores in higher-income areas while also serving shoppers of all levels of affluence throughout the region. Prices are kept as low as possible, while still ensuring they allow Goodwill to make enough money to pay salaries, cover rent, utilities, transportation, insurance, and all of the other fixed costs that are required to run the operation.

While the location is one key variable to consider when opening a Goodwill store, other factors such as square footage, and cost per square foot must be taken into account as well. Goodwill is a nonprofit and must invest responsibly. We are held accountable by our donors and always seek to find a location that is affordable while also meeting a variety of logistical and geographic requirements.

The donation center at each new retail location generally opens about a month prior to the store. This is so that the new location can begin accepting donations that will be sold when the store opens. We can’t open a store without product on the shelves. While Goodwill does have a warehouse with overstock and uses that inventory to supplement the donations a new location will receive, the goal is to eventually ween each store off of the overstock so that it becomes self-sufficient. What you see on the retail store floor at most Goodwill stores was actually donated at that location and reflects the generosity of the local community. Fortunately, the people of the greater Washington metropolitan area are very generous!

Variety of clothing for all family members

Each store creates about 25-30 new jobs including management, retail sales team members, donation attendants, and merchandise processors. While the sales associate and donation attendant are jobs most people are very familiar with, a merchandise processor is really the heart of any Goodwill retail operation. They are responsible for sorting, hanging, and pricing the goods our customers buy. The more efficient they are, the more merchandise we’re able to move to the floor for our shoppers to browse.

While Goodwill stores operate in a very similar manner to most retail operations, we do have some unique jobs and processes. But at the end of the day, what makes Goodwill different from virtually any other retailer is that 91 cents out of every dollar we earn is funneled back into our mission services: providing free job training, education, and employment programs for people with disadvantages and disabilities. That is what makes us the most proud every time we open a new store.

Speaking of which, Goodwill of Greater Washington is preparing to open its 21st retail store at 725 Rockville Pike, Rockville, MD before the end of the summer. We hope you’ll stop by for a visit. We’ll announce the grand opening date on our Facebook page as soon as it’s confirmed. Happy Goodwill hunting!

Working Capital, Goodwill mission blog author
This article was written by: Brendan Hurley
Chief Marketing Officer

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Goodwill of Greater Washington stores and donation centers transform lives and communities by supporting our free career and employment services for people with disabilities and disadvantages.

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