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I've been to LA recently and I wonder if anybody here knows the answer to this: one thing I noticed there is a lot of people selling clothes (and other things but mostly clothes and shoes) on the street. And I mean right on a random street (maybe not random, but looked random to me), not even a tent, nothing, just some hangers or tarps and clothes and shoes on them. A lot of those.
Who are they? Why are they doing it on the street? Where these clothes come from - are they stolen? I have hard time imagining legit wholesaler giving people their goods to just sell randomly on the street - but maybe I'm wrong? What is the basis for this business, how that works? How people wouldn't just steal all the clothes if they steal massively from regular retail shops - are the criminals providing security for them? Or maybe corrupt cops? No regular cops for sure since I haven't seen a single policeman around for all the time I've been in LA.
I've never seen such a thing in any other major city that I can remember. I've seen kinda grey marketplaces or genuine street markets, but those are always in certain designated places and usually have at least some infrastructure, not just randomly deployed on the street. Why this is specifically in LA?
This is pretty normal in the third world, and in the places that are becoming it. Street sellers in Paris and Barcelona, open air markets in Brussels. In the US pretty much all are illegal migrants, maybe a few are just soli citizens but certainly very few. The clothes are sourced from others in the community, maybe a couple of whom acquire big volume discount merchandise from discount store closings, perhaps wholesale outlets etc, then sell them on.
The object is really just to make a few extra dollars a day, by ‘hourly wage’ these people are making far below even minimum wage (let alone the average unskilled wage somewhere like LA). You will notice almost all the sellers are women, maybe with a few children / teenagers, and some men incapable of hard manual labor. These are people who can’t find other employment due to lack of documentation, language or any other skills.
Their husbands, brothers or other male family members may be day laborers waiting for clients in the home depot parking lot. The rest of their income will be charity, handouts, soup kitchens, church programs etc. Their objective is just to make a tiny bit of extra money, anything is fine, since they have nothing else to do. 8 hours standing by the side of the road to make $10 vs 8 hours at home making $0 is the calculation.
In economic terms, they are prevented from starving (by family, by charity, by the state, or by some combination of the three) but their labor has no real market value. Industrial modernity has also created an extreme surplus of cheaply produced material goods (like clothing). The consequence is this kind of retail.
I still don't understand the economy. The volume of this can't be large - I never actually witnessed anybody buying anything, I assume that somebody does, but not that frequently. The clothes themselves seem to be pretty standard ones, similar to what I see in every store, not some junk or second hand ones, so they must cost something? How these costs are covered? How are they ensured against loss or theft? How much can they be sold for to make it viable - I mean, I can just go to the store and buy the same, so it has to be significantly cheaper than in the store, but it's not that expensive in the store already. I mean, I can buy a shirt at Costco for something like 10 bucks or less, if price is what I'm after, how much lower can they go and still be profitable on low volumes?
Handful of seller's cousins standing nearby, I presume.
As @2rafa said, the purchase cost of this merchandise is near zero, and so is seller's opportunity cost of labor/time.
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