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10 Shades of Grey: The ‘Oshkosh & Fox Cities’ Parallel Economy

Rescued retro office chair rehabbed with vintage leather belts and deconstructed leather coat, “re-made” by L. Palmeri

Rescued retro office chair rehabbed with vintage leather belts and deconstructed leather coat, “re-made” by L. Palmeri

By Lori Palmeri

Susanna pulls up to the KwikTrip convenience store, in her black SUV in time to grab a coffee, while waiting for her “hookup” in the parking lot. Her child sits in a car seat napping. What is her hookup? Nothing illicit. Today, it’s a small gold painted breakfast tray she’s paying $10 for, to use after her upcoming surgery. She found it on a local Facebook selling group page.

Her seller arrives, and they exchange the goods and cash like some clandestine street corner deal but without the clandestine part. They connected on a local Facebook buy/sell/trade page where sellers list items and photos for sale and message back and forth with interested buyers. A price is agreed on, a private message is sent to arrange a time and location (public places with video surveillance is best for safety reasons, according to Sgt. Rebecca Kaiser of Oshkosh Police Department) to meet. Moms are meeting up in places like McDonald’s, convenience stores, Starbucks, and Police Department parking lots as a safe way to buy and sell items rather than at their homes. And, relationships as well as trust and rapport, are being generated and built in the process among repeat buyers and sellers. Community members are connecting on-the-go, to share and swap goods (and sometimes household services) for cash.

We’ve all heard of the black market which is the buying, selling, and trading of contraband items and services. But have you heard of the parallel or grey economy? While there is no one succinct definition, generally, the grey economy is also called the “informal sector”, or shadow economy. That is, the buying and selling of goods in the off-the-books shadows of grey. These goods and services are not part of the GDP, nor are they typically taxed when exchanged between individuals. On-the-record storefront resellers, however, do collect and pay taxes on used merchandise.

The underground, “System D” and what is more familiarized as “under the table”, are other names used to describe low tech marketing or making-do-with-what-you-have goods distribution. But now, the high tech social media networks have put a new spin on old deals. In this article, we do not focus on the informal service sector, nor the darker shades of the grey economy, but rather exchange of used goods. We’ll cover some general statistical background on the grey economy, some anecdotal evolution of the resale market, and look more specifically at how local resale has become high tech and as mobile as an espresso-fueled smart phone app.

Resale is not new by any stretch. But it sure has evolved. The Economist comes out with an article about every five years or so relative to the shadow economy, the grey economy, or some other iteration, which gives global reports on various countries informal sectors, typically contrasting developing countries to industrialized.

couchAt the global level, it has been reported as much as 41% of developing countries’ economy is derived from the informal economy, providing the poor with opportunities not otherwise accessible. Since the 1970’s, the informal sector has become an increasingly popular subject of investigation, not just in economics, but also in sociology, anthropology and urban planning. With the turn towards so called post-fordist modes of production in the advanced developing countries, many workers were forced out of their formal sector work and into informal employment. In 2005, Alejandro Portes et al authored the Informal Economy, emphasizing its existence in all countries by including case studies ranging from New York City and Madrid to Uruguay and Colombia.

For decades in the United States, householders have held yard/rummage sales, estate sales, flea markets and auctions to dispose of unwanted items as a result of our country’s consumer practices producing mountains of discarded and no-longer-desired accumulations that need to go somewhere. And, often that means the landfill. But more recently since the 2008 recession, repair and resale has become en vogue again.

First came Ebay and the online auctions of collectibles, household items, cars, and anything else you can think of. Then came Etsy, with handmade artistic goods for online home shopping. Then Amazon with resale of books and other sundries. And, as far as bricks and mortar, Goodwill has always been known to take donations, reselling items with use left in them as a way to provide jobs for people with limited abilities.  Goodwill Industries (started in 1902 in Brooklyn, New York) has an annual revenue of 4.8 billion dollars, claiming to provide six million people with job training, employment placement services, and other community-based programs for people who have disabilities. Funded by a massive network of retail thrift stores, Goodwill operates as nonprofits. Goodwill’s answer to its profit status is “As a unique hybrid called a social enterprise, we defy traditional distinctions. Instead of a single bottom line of profit, we hold ourselves accountable to a triple bottom line of people, planet, and performance.”

Moreover, there are still the occasional on site auctions complete with a colorful auction “caller”. As a small child, I remember going with my grandparents to the Saturday night auction in a big hall, in a small town nestled at the base of the Appalachian Mountains. It was a form of entertainment, gathering place for local rural people, and a source of household and craft goods (Grandma did quilts and other sewing), canning jars or pots, and the occasional oddball white elephant gift. In later years, as we moved away, we would receive what we called “grandma’s surprise boxes” at Christmas. They would include unwrapped auction or thrifted gifts that were kind of a free for all, including partial miniature French perfume bottles, costume jewelry, scarves, dresses, and all kinds of books and campy kitsch. As teenagers, we were less than thrilled as we saw our peers getting new stuff like the TV commercials showed.

But truth is, when you have grandchildren on a fixed income, it was really quite brilliant of them to cover the bases for the whole year – birthdays, holidays, and just to let us know they were thinking of us. The tradition was passed on to my mom and she began the same practice, carrying on the cross-country collecting and mailing boxes between her sisters. They still do it to this day. My mom’s gathering evolved beyond auctions, to rummage sales and Goodwill, to take care of our clothing or household needs back in the recycling, 1970’s “back to the land” simple living movement as a backlash to rampant consumerism. We also lived in a “re-claimed” school bus as part of that era. So, you could say, we are a five generation family of recyclers, having learned to reclaim and repurpose, and admittedly, the occasional re-gifting. I hunt, gather, and rescue cast offs that need minor repair via thrift shops, curb, Facebook and Varagesale.com, as well as the occasional flea market for furniture and textiles for what is now called upcycling. That is, essentially repair with a creative twist. Giving old things new life is most satisfying and currently re-trending.

Regionally speaking, enter now, a new age of reclaim, resale and re-use. The local grey economy of online sales and service, are bringing strangers together to buy sell and trade without having to shop endless miles of rummage sale tables of stacks of baby clothes and spring cleaning cast offs.

Not that I am interested in giving Facebook any more exposure than it already has and does for itself, but for informational purposes, the following data was gathered to illustrate a sampling of the breadth and width of the local grey economy, relative to resale goods. VarageSale.com, OfferUp, and Facebook are now giving Craigslist a run for their money on the “free classified” list, TechCrunch.com, an online Zine reported. This year, Forbes magazine reported on a study that claims between 2000 and 2007, Craigslist.org took $5 billion from newspapers through its free classifieds. However, owner Craig Newmark, disagrees. He claims there is no direct cause and effect. In any event there is a strong correlation with re-sale uptick as a result of smart phone applications.

It seems that new technology has created a Pac Man game of gobbling up the dots – Craigslist and Ebay appear to hurt the newspapers classifieds, then along comes Facebook and makes a dent in Craigslist. Then comes VarageSale and other similar apps that gobble up Facebook. The evolution of how to bring buyer and seller together for resale just keeps getting faster and evading the middleman fees through a multitude of channels. Are we soon to see our own private drones buying and selling for us as Amazon has hinted at? Perhaps that sounds Sci-Fi, but is it realistic that millennials’ offspring could see that version of the market interaction?

As of this writing, some local stats on social media resale pages, such as Facebook include:

Facebook Buy Sell Trade Group Page Name # Members
Wisconsin Buy Sell Trade 9054
Fox Valley Used Furniture Sales 5586
Oshkosh Grayslist 3047
Oshkosh Resale and Rummage 2,970
Furniture and Décor 1,079
The Exchange 2,034
Omro & Surrounding Area BST 1,507
VarageSale.com community name # Members # Items Listed
Appleton 7,417 43,075
Oshkosh 2,317 6,554
Fondy 2,921 3,495
Mid Wisconsin Marketplace 5,637 29,998

Many of these pages have members that float across multiple selling pages “cross-posting” for maximum exposure. Some members create their own personal buy/sell/trade page as an online rummage and invite friends and family. I have also seen swap parties created for bartering everything from kids clothes to lamps and more.

No longer do you have to haul your stuff out to the driveway and pack it away for donation or next year’s sale. Snap a photo with your phone, upload it, describe it and wait for interested viewers/shoppers to comment.

A number of the Facebook buy/sell/trade group pages will grow large enough, their admins can no longer keep up with all the postings. Several local Facebook pages have migrated to VarageSale.com, a website similar to Craigslist, but has no anonymity, and can better handle the diversity of entries and listings.

VarageSale.com is like Craigslist but more localized and has a stronger sense of community since there is no anonymity, a sense of being safer because people are required to register with their verified Facebook Profile, is not like Ebay since there is no wait for an auction. If a buyer sees an item and comments” “take, they have first dibs and are required to be ready to pick up within 48 hours of final deal arrangements. And just like Craigslist, there are no-shows. But some groups have a 3 strikes you’re out rule, so that if someone reports you no showed and did not communicate, you can be removed from the group.

There are additional, pitfalls to using the social media platforms for buying/selling. Some users don’t read the rules or know the etiquette, or are simply not very good communicators. The pros include an option to praise someone for good transactions which is similar to Ebay’s feedback system. In any event there is no middleman like ebay to take their 10% cut, so far VS has no advertising or fee structure. I keep waiting to see how this Toronto- based company makes money – are they collecting and selling data to Big Data?? Another one from Canada based in Seattle, OfferUp along with Varage Sale could mean trouble for Craigslist according to business analysts. They both have free mobile apps which make the transactions even more mobile.

WhiteDresserVarageSale as an online market place, differs from Amazon, and Ebay because it is local goods being resold. It features the advantages of rummaging and thrifting because of the money savings, but the best of local, because buyers are repeating and making relationships. Their description states: “VarageSale is the fun and safe way to buy, sell and connect with real people in your neighborhood.” And, unlike Facebook buy sell pages, there is so far, little interpersonal drama which seems to crop up navigating the rules and communication via the Facebook interface.

According to another tech news report, e-zine Re/Code offers the following observation, “So why are investors chasing after these companies? Both apps are seeing unbelievable growth in both users and items sold, according to people familiar with the companies. OfferUp, for example, has consistently ranked in the Top 10 free shopping and lifestyle apps in the Google and Apple app stores, respectively, over the past few months.

But the companies still don’t generate any revenue, which means investors are currently placing their bets on each company’s user growth and in the value of items sold. Neither service has made any serious attempt to bring in meaningful sales and instead has focused on growing their user bases, sources say. The apps are still a work in progress — neither have the ability to broker transactions, and the buyers and sellers often have to exchange money in person.

The apps also don’t charge for listing items, but that could change in the future, even if it could stunt growth. The companies could also decide to allow for purchasing on their own platforms, charging the sellers a percentage of sales. EBay, Amazon and Etsy all employ such a model on their giant marketplaces.”

Low Tech Grey Markets – Rummage and Estate Sales
The rummage and estate sale season begins now that the weather has broken into more favorable temperatures. Soon, city-wide and neighborhood rummage sales abound. Though the ordinance is not frequently enforced, Chapter 30 of Oshkosh City Ordinance says rummage sales can last no more than 4 days in duration, nor occur more than once every 4 months. What is enforced? Signage – law enforcement can and do frequently remove signs if placed improperly on terraces or street poles. Etc.

So just how do these individual transactions impact local reseller storefronts? Competition by private sellers does not necessarily harm resellers/retailers.

Marilyn Ochowicz, Owner of Marilyn’s Resale Therapy, with 17 years reselling experience, says that her clothing and furniture storefront at 511 N. Main Street is not impacted so far by these types of transactions. She has built solid relationships with her suppliers and customers. She went into the business as a way to support her family and as a way of expressing her style. Her opinion on the technology advancements of bringing buyers and sellers together via social media is that it’s great and that there is room for all sellers regardless of what connects them with buyers.

The added benefit of shopping your local reseller is that they take time to help you with your project and go the extra mile to satisfy their customers. These cottage industries have fueled the DIY and “Makers Movement”, supplying with bits and parts for home decorating to neo-industrial inspired commercial spaces.

The National Association of Resale Professionals states that reselling is a recession proof segment of retailing. Resale attracts a new demographic of both suppliers and customers during difficult economic times. “People who previously gave away clothing, household goods, and furniture are seeking other ways to dispose of unwanted items during an economic pinch,” says Adele Meyer, Executive Director of NARTS.

As stated, not all reclaiming, repurposing and reselling fits into black or white categories, but rather multiple shades of grey. Just be sure you know all reselling is buyer beware and inspect your items thoroughly. Further, take special care to determine if a free item is reasonably repaired and can still be used functionally or parted out for artistic purposes. And if you wander into the DIY repair online forums, be sure to see if you can fix your broken vacuum cleaner via Youtube how to videos or even replace your own cell phone cracked screen with step by step instructions on Ifixit.com.

Caution!
Picking up upholstered furniture on the curb can be hazardous and that “free” curb item could have undetectable bedbugs or flood damage, mold, pet or other health hazards.

Check recent recall lists for items such as cribs, car seats and children’s toys.

If purchasing a used cellular phone, check with the carrier or the police department to confirm it is not stolen or locked preventing usage.

The Oshkosh Police Department reminds citizens that posting signs in the right-of-way and posting handbills on utility poles, street signs and the like are ordinance violations.

City of Oshkosh Ordinance 25-26 prohibits posting of all signs in the public right of way and on public property. This includes yard or garage sale signs, political signs and any other advertisement signs.

City of Oshkosh Ordinance 25-27A allows seizure of all signs in the public right-of-way by order of the City Manager, Police Chief, Police Officer or the Department of Public Works.

Lori Palmeri is an urban consultant, creative re-maker, and resident of the central city neighborhood of Middle Village, Oshkosh since 2008. As a UW Oshkosh alumna, she served Oshkosh’s neighborhood identity and association renaissance, received her Master’s degree in Urban Planning from UW Milwaukee, and served as a local neighborhood organizer and advocate for revitalization. She has worked in central city neighborhoods in Southeast and Central Wisconsin since 2010. She appreciates the unique opportunities of living in the heart of downtown Oshkosh, saying, “Think Big, Live Small.”

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