Paragon Textiles finds hot second-hand clothing markets

Paragon Textiles is one of the second-hand clothing brokers, buying, sometimes repairing, then selling what thrift stores don’t want, and shipping it mostly to Africa and South America. At least that’s how Paragon Textiles CEO and owner Murtaza Haji got his start in the 1990s, selling a few containers at a time.

Today, the company works on a 42,000 square foot lot warehouse in Los Angeles, CA and sources, not only from thrift stores, but also buys excess inventory and returns from a few retailers. Sometimes Paragon deals directly with stores, and sometimes through brokers.

“We process and ship overseas to microentrepreneurs who are starting small clothing boutiques. Some quit their day jobs where they earned the equivalent of a few hundred US dollars a month. They realize they can buy products and make more money by selling one ball at a time,” Haji said.

The most ambitious small buyers and sellers earn up to thousands a month, according to Haji.

Paragon recycles, or sells as wearables, 97% of what it receives, most from thrift stores in bales of around 40,000 pounds; the Paragon team has no idea what’s inside until they open them.

Paragon sorts everything, and it’s a complex process. First, workers separate clothing for men, women, and children, and by size, removing what isn’t torn or stained.

These usable garments make up the bulk of the mix and are destined for the two main overseas markets. Some of the rest is cut into cleaning rags sold to US-based companies that manufacture windshield wipers in bulk and supply them to end users. A small remnant is converted into other items, for example irreparable sweaters are shredded and the fibers are used in India to make recycled yarn, clothing or carpets.

Paragon’s gross revenue is only 20% and it incurs 10-15% overhead.

“So if we do 5 to 7%, that’s it. But it’s a comfortable life because of the volume,” Haji said.

He got his start when a cousin visiting him in Los Angeles from Congo Africa offered to find second-hand clothes, sell them and ship them overseas. Haji explored unfamiliar territory, learning more from a friend with a clothing company in Canada who asked him for help finding used clothing suppliers in Los Angeles, and at the same time teaching Haji the second-hand textile market.

This was the start of a decades-long journey focused primarily on establishing and developing relationships to build a strong network.

“The first steps are to find a strong buyer in your overseas market and a good supplier with quality goods. You also need an established relationship with a freight forwarder who does transcontinental shipments,” he says.

Another key lesson in exporting is to be diversified.

“There are a lot of ups and downs and political and economic instability in some of the areas where we work. But if business slows down in one country, we move the product elsewhere.

And you have to find what is requested. Buyers pay shipping costs and customs duties, so you have to send what they want,” says Haji.

In its strongest market, this demand is for quality garments, not raw materials or garments in need of repair.

Paragon’s sister company, Casa de Ropa in Chile, stores what Paragon sends and distributes it to local microentrepreneurs, mostly women. Casa de Ropa helps them determine their target customers and recommend what they should buy.

“She brings balls home and can clean clothes. She takes them to the flea market, displays them and sells them,” says Haji.

Haji sometimes bets that if she seems serious, he sends her the product for a deposit, and almost always gets the balance refunded.

“They are responsible and determined. So we support it; little by little she grows. We no longer have to finance her because she now has a solid business. They come back and stay loyal because you trusted her and you trusted her, and now she is grateful to you,” Haji says.

Paragon’s model and merchandise work, he thinks, because its brand represents America in the eyes of consumers. They see what intrigues them on social media and in the Hollywood movies they watch on Netflix.

“What attracts them might be a t-shirt or other item of clothing displaying a picture of Madonna or Michael Jordan, or the words ‘Nike’ or ‘Florida… They love American fashion,'” Haji says.

Born Primitive, a fitness clothing brand, sells overstock at Paragon with a steep discount.

“With the help of Paragon, we now have the ability to liquidate our inventory in a way that has a positive social impact in less privileged regions of the world, while contributing to our company’s sustainability goals,” says Bear Handlen, owner and CEO of Born Primitive.

Paragon’s proposal struck a chord with Handlon, bringing him back to an earlier era.

“We started our business in our garage and went to countless events trying to sell t-shirts from a card table for the first few years. When I think of the people who will buy our products to make profits for their own small businesses, it’s really come full circle for me, they’ll basically do what we did, but in a totally different part of the world.

It is only recently that Handlon’s clothing business has grown to the point where he is challenged to make accurate forecasts and as a result has ended up with overstock.

But oStockpiles of textile inventory and returns are common, especially for medium and large retailers, where goods accumulate in their warehouses, often ending up in landfills or burned.

“That’s where we come in, giving another option,” says Kay Litwin, Paragon Textiles Head of Partner Relations and Social Responsibility.

Paragon now recovers around 10,000 to 20,000 pounds per month from a total of three retailers, which, like thrift store finds, are shipped overseas. Litwin is trying to expand the retail side of the business – which now accounts for just 5% of the mix – to grow Paragon’s model.

“Some people say, you sell to these poor women? But for our foreign entrepreneurs, relying on donations would not be a long-term solution,” says Litwin.

“You need to help countries create a sustainable economy rather than flooding them with handouts. Now these women can start a business and participate in a global market. »

What motivates Haji?

“It’s like a two in one. As a private company, if we don’t make money, we can’t do what we do. But the nice thing is that we also do a lot of good for the environment and help entrepreneurs overseas.

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