The resale market is about to get a boost.

Imagine being a manufacturer in China, and your entire life is devoted to growing your business and creating products that are sent to other parts of the world. From small items to big items, your production line would need to be moving to keep up with demand, until there isn’t any. By no fault of your own, the demand is drying up as business owners on the other side of the world reconsider the landed cost of your products and the final price tag for the consumer. Heavy tariffs are dictating how many people you employ, the hours you operate your factory, and how much your order from your own suppliers to create these products (eg, cotton from India to make a t-shirt).

When cargo ships don’t arrive at US ports, it signals that production has slowed down. When production slows down, it is hard to get it pumping again when so much uncertainty looms over business owners. Let me walk you through the production process. In order to produce a cotton shirt, it requires a long process of design, and ordering textiles that need to be manufactured around a year before production begins. When it all comes to a halt, you can imagine how long it will take to get back to where it once was. Every supplier slows down manufacturing of all parts needed to create a finished product.

While I am just a marketing strategist in Toronto, I have worked with brands who have produced overseas and I understand what effects a slow down could have. Having operated as a retailer in Toronto for many years, I know that the impact on businesses selling goods will be hard. They sell products, and if they don’t have products to sell in their stores or online stores, then they won’t be able to pay their staff, rent, and themselves.

Is it time for small businesses to start re-evaluating the resale market? Economics and sustainability had been driving the resale market for nearly a decade, contributing to the growth of Meta (facebook marketplace) and sites like Poshmark that sell everything from sports equipment to clothing and accessories. If less offshore products get delivered to the USA, consumer needs may be directed to resale. A favourable alternative to empty shelves with pricier (tariffs absorbed) goods. The trajectory of growth for resale has been very strong since covid, and continues to climb.

Maybe you are wondering how small businesses will adapt selling higher priced goods while consumers are leaning towards used options. As a Marketing and Business Coach creating marketing strategies in Toronto, I can tell you that I wonder the same, but I also consider that if prices go up, so should margins? When there is more demand, the price of supplies will rise if there is a shortage. We saw this clearly during covid when PPE demand was very high, but supply was low. Five years later, no one can accuse business owners of price gouging amidst a trade war. Consumers will know that prices will be dramatically impacted and they will be prepared to buy based off their needs and wants, if it is still economical to do so. If the businesses still apply their traditional margins, then they stand to make more money off every product sold when the tariffs are absorbed. They may sell less products, but they retain more profit from each item sold. This can sustain their business until the dust settles.

So, could this mean we could see the rise of resale in the next couple of years as the economy slows? Two factors play a part in this. A slumping economy (what affects our neighbours, will affect Canada too.) and supply vs. demand.