Rag Trade

Folks,
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We have a little over 100 people on this list and it probably wont get lively
and daily until we have about 500...which will be later in the year...
On another matter, I dined with a fellow who told me about his fellow, and
wrote up a report to you on what he told me about his biz. I find these
fascinating and sometime get ideas from them. Here ya go:

The Rag Trade
Trade in clothing has long been referred to as the rag trade, but in addition
to this humorous appelation is a complex business distributing cast off
clothes. Those clothes donated to charity are supposed to clothe the poor and
help fund charities. The indeed do both, but the clothes follow a fascinating
path into the hands of the needy, a path that very much may surprise you.
First, the donated clothes are taken to Goodwill or Salvation Army centers
where the clothes are sorted by quality. Various grades are applicable: like
new, worn, and rag. This sorting work gives valuable employment to the
handicapped.
There are buyers for the various grades of donated clothes:
the retail operations of the charities themselves, high end consignment and
used clothes stores, and for the lowest grade rags, rag companies who shred
and recycle the material.
In between those grades are a wide range of grades that are largely exported
from the United States to poorer countries. Used clothing brokers bid for a
contract to take the results of the charities' sorting, and usually the bid
lasts for three years. The rag broker then sells the rags overseas.
Curiously, these rags originated overseas in many instances, so they are in
fact merely exported after americans have used the clothes.
In poorer countries the clothes are retailed where people are delighted to get
good clothing at low prices. In this way, true needs are met. The charities
have work for the needy, the charities gain revenue from the sales of the
garment to fund other programs, and people in third countries have access to
good clothes.
Although this system is fairly fine tuned, there still are problems. The
clothes are sorted to an extent, but not the the exclusion of the Philipines
getting too many winter coats and Siberians getting too many swimsuits.
Herein there is an opportunity for someone to bid a higher price, gain the rag
trade flow, and pass the cost onto overseas buyers who are happy to pay a
premium to avoid the wasted effort on unneeded garments. This is my friends
plan.

John Spiers

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