Sports fans can soon bid on unique experiences and merchandise, like a round of golf with National Football League Hall of Famer Marcus Allen or a game-worn jersey, but the special auctions won’t take place at a fundraiser.
Starting this month, Goodwill of Orange County’s e-commerce website, Shopgoodwill.com, will offer a steady stream of exclusive NFL merchandise, thanks to a new partnership with the Retired NFL Players Congress.
Goodwill of OC Chief Executive Frank Talarico said the deal makes perfect sense for the Santa Ana nonprofit organization.
“(We) have the opportunity to attract an entirely new market, the sports enthusiast, the casual fan, everybody in between,” he said.
“Traditionally, they’d have to go to either a charity event or a local store and pay God knows how much with no charitable aspect. Now they can come to our website, bid (or) do a purchase-now option, knowing that 100% of the proceeds are going to charity.”
NFL memorabilia is just a starting point for Goodwill and the players congress. The partners plan to roll out merchandise from the National Basketball Association and other leagues in coming months.
“We’re going to be covering all sports,” said Ron Brown, executive committee member of the players congress and a former Los Angeles Rams wide receiver. “I told Magic Johnson he’ll have to sit down for a couple hours and sign (his photos).”
Shopgoodwill might be an unlikely source of premium sports memorabilia, considering its top sellers are Legos, jewelry and media, including books. But the site’s sales hit $545 million last month. It was also named the second-best auction website after granddaddy online auctioneer eBay last month by technology site Lifewire. The site launched in 1999, four years after.
Dan Wallace-Brewster, vice president of corporate marketing for El Segundo e-commerce services company Onestop Internet, said the partnership capitalizes on a shopper known for paying top dollar—ironic, given Goodwill stores typically attract bargain hunters.
“You go to Goodwill to buy at a discount, but with sports memorabilia, you’re expecting to pay a premium,” he said. “Sports memorabilia has a very consistent market. There’s going to be a fan for every single player and team associated with the NFL. So even if it’s not a top-tier player but you can have lunch with them, I think people will love that.”
Making an Offer
The e-commerce platform was one of the first nonprofit auction sites. Former Goodwill Chief Executive George Kessinger started it to help boost the organization’s revenue, but the early days were met with challenges.
Talarico said it was losing $11,000 to $13,000 a month its first year.
“It was a dog, but Kessinger convinced the board not to pull the plug.”
Shopgoodwill has sold more than 21 million items since it held its first auction, and is still operated by Goodwill of OC.
The nonprofit contracts with 160 of the 162 international Goodwill locations to sell their donated goods on the site. Talarico said that roughly 116 Goodwill stores are actively posting merchandise at any given time.
Goodwill of OC takes a 2% to 2.5% sales fee on each item sold compared to the 15% fee charged by other e-commerce sites, he said.
When walking through its 36,000-square-foot warehouse in Santa Ana dedicated to Goodwill of OC’s portion of auction site offerings, it’s easy to forget the organization is operating as a nonprofit. It says nearly 90% of proceeds go toward programs that include the Tierney Center for Veterans Services. Its 95-member staff includes 35 Goodwill program participants, among them employees with barriers to employment, including employees with disabilities.
Donated items are first checked by a quality-control department, then passed through a series of steps, from photography to shipping.
Merchandise posted by Goodwill of OC typically has an opening bid of $4.99; products will sometimes be sold in bundles to boost the value of the starting price. For example, a handbag may be sold with a piece of jewelry.
Legos are the hottest commodity, according to Technology Services Manager Ryan Smith. A one-pound bag of the colorful plastic bricks once sold in-store for 10 cents but can now command an average of $47 online, and a set of Lego characters typically sells for $100 to $300.
Smith said Goodwill of OC continually tries to make the posting and selling process more efficient to help increase margins. Last year, it purchased a custom packaging machine that helped reduce the number of staff handling shipping from 12 to four.
“The more we can improve efficiency, the more product we can get online and the more margin we can extract from the items donated to us,” he said. “It’s our responsibility to make sure our process is as efficient as possible so we’re not wasting your donation.”
Full Steam Ahead
It also plans to introduce new software to help make the selling process quicker and easier for its territories.
Beyond improvements to its internal business, the organization will launch a mobile shopping app this quarter and plans to aggressively market the site this year.
Shopgoodwill may be getting good business, but Talarico said it won’t replace its traditional bricks-and-mortar shops. He added that e-commerce still makes up only about 4% of the organization’s $4 billion in annual revenue.
“E-commerce is part of the revenue mix for retail,” he said. “It should be an addition to, not instead of.”
It’s why Talarico said he’s bullish on the idea of opening additional locations of its higher-end boutique shops.
The nonprofit opened its first boutique location in Tustin in 2013 with the idea of introducing clothing, furniture and home goods that target brand-conscious buyers. It also has a boutique location each in Huntington Beach, Anaheim, San Juan Capistrano and Lake Forest. Talarico said it’s in talks with retail developer Shaheen Sadeghi of Lab Holding LLC to open a sixth boutique but declined to reveal the location.
It seems counterintuitive to expand its bricks-and-mortar presence at a time when traditional retailers are struggling to survive and many are focusing on e-commerce, but Wallace-Brewster of Onestop Internet said the approach may work in Goodwill’s favor.
“The more unique items you have online, the harder it is for them to be catalogued, searched, found and purchased, and logistics is a whole different animal,” he said. “With a business model like Goodwill, people need to touch and feel because it’s been gently used. They need to know how gently it’s been used, and you can only do that by touching and feeling it.”
Talarico said his push to increase the nonprofit’s physical and online footprints by having a for-profit mindset is a shift from the traditional way of thinking on how nonprofits should operate.
“The object of our game is to ensure that the programs and services we offer to people are going to be here tomorrow and the next day. We do that by generating our own revenue. I never want to have to worry about coming to work tomorrow and saying I can’t turn the lights on because we didn’t get enough donations.”
