Thrift Stores: How Profitable Are They?

thrift store profitability

Thrift Store Business Plan

In the United States, there are over 30,000 shops selling secondhand items. These shops bring in about $17 billion a year from customers. Thrift stores are known for being stable during tough economic times. But, they don’t make a lot of money, with profits around 3.3% in 2016. The people running these shops make about $52,000 a year on average.

Key Takeaways

  • The U.S. resale, consignment, thrift, and antique industry generates around $17 billion in annual consumer spending.
  • Thrift stores are considered “recession-proof” businesses, but their average profit margins are relatively modest at 3.3%.
  • The average annual salary for a thrift shop manager is approximately $52,000.
  • Thrift stores generate revenue by selling donated items at discounted prices, with a wide range of merchandise categories and price points.
  • Understanding customer segmentation, pricing strategies, and operational efficiency are key to maximizing thrift store profitability.

Understanding Thrift Store Revenue Streams

What Do Thrift Stores Sell?

Thrift stores have a wide range of secondhand goods for those on a budget and eco-conscious shoppers. You can find everything from clothing, accessories, household goods, electronics, books, media, toys, and unique or quirky collectibles. They carefully pick and organize their items to attract many customers, helping people save money and shop sustainably.

Nonprofits often run thrift stores to make money, as these items can be quite profitable. If a thrift store sells mostly donated merchandise, it might get tax breaks. This is because the IRS sees these sales as part of the nonprofit’s charity work and doesn’t tax them as much.

But, thrift stores have to deal with sales tax on their secondhand goods. Nonprofits might set up a separate group just for the thrift store to avoid legal issues. Selling donated items at thrift stores is usually tax-free, which helps charities a lot.

Thrift Store InventoryPercentage of Total Revenue
Clothing and Accessories50%
Household Goods25%
Books, Media, and Toys15%
Electronics and Collectibles10%

By knowing how thrift stores make money and what they sell, nonprofits can use these assets to help their causes. This makes their business more sustainable.

Pricing Strategies for Thrift Store Merchandise

The thrift store business has grown a lot, making over $10 billion in 2020. Pricing their items right is key. They need to make things affordable for customers and still make a good profit. Prices vary a lot, from $2 to $30 for clothes, $1 to $5 for accessories, and so on.

Thrift stores use different ways to set prices. Psychological pricing, like selling for $X.99, can really help sales. Also, variable pricing, where prices change with demand, helps make more money and gives customers a good deal. Good signs and displays help customers understand these prices better.

Discounts and sales are big for thrift stores. For example, red tags might offer 50% off, and blue tags 75% off. It’s important to watch what customers say and how much they buy to keep prices right. Offering bundles can also make more money by giving customers a good deal on several items.

Special deals and making things seem scarce can make people buy faster. Loyalty programs and rewards can make customers come back more often. This makes them happier and more loyal to the store.

Thrift stores can use special software to help with pricing. This lets them set prices based on how old or worn an item is, or how popular it is. Consignment shops can also share profits with sellers, making the store more profitable.

It’s important for thrift stores to keep an eye on their prices and change them as needed. Using online tools, they can see what their competitors charge and adjust their prices. Selling online is also a way for them to make more money.

“Effective pricing strategies are crucial for thrift stores to strike the right balance between affordability and profitability, ultimately enhancing the customer experience and driving sustainable growth.”

thrift store pricing

Thrift Store Customer Segmentation

Thrift stores attract a wide range of customers, from those looking to save money to those who love vintage items and care for the environment. Knowing who these customers are and what they like is key to making thrift stores more profitable.

Who Shops at Thrift Stores?

Customers at thrift stores fall into several main groups:

  • Bargain Hunters: These shoppers look for quality items at low prices. They often visit thrift stores for designer brands, vintage pieces, and unique items.
  • Vintage Enthusiasts: These customers love the nostalgia and uniqueness of vintage clothing and furniture found in thrift stores. They might pay a bit more for these items.
  • Eco-Friendly Shoppers: These people choose thrift stores to help the environment. They buy pre-owned items to reduce waste and support the circular economy.
  • DIY Crafters: Thrift stores are perfect for DIY fans. They use secondhand items to make new, personalized projects.
  • Community Supporters: Some go to thrift stores to support local charities or community programs. They like the store’s mission.

By knowing what drives these different groups, thrift stores can improve their marketing and product choices. This helps them meet their customers’ needs and increase profits.

For more tips on making your thrift store more profitable, check out www.businessconceptor.com. They offer business plan templates and more resources.

Average Customer Spending and Lifetime Value

Thrift stores have become very popular lately. They offer a unique shopping experience and let customers find great deals. Understanding how much customers spend and their lifetime value is key to making more money.

On average, customers spend $5 to $30 each time they visit. They usually shop 1 to 4 times a month. This means the average customer could be worth $60 to $1,440 over their lifetime. They could bring in about $750 a year.

How much customers spend and their lifetime value can change a lot. This depends on the store’s location, appeal, and market trends. But these numbers give thrift store owners a good idea of how they’re doing. They help owners see where they can grow.

To make customers come back more often, store owners can try loyalty programs and easy return policies. Targeted marketing can also help. By knowing what their customers like, owners can increase repeat business and make more money.

MetricValue
Thrift Store Average Transaction Value$5 – $30
Customer Visit Frequency1 – 4 times per month
Customer Lifetime Value$60 – $1,440
Annual Revenue per Customer$750

For more tips on making your thrift store more profitable, check out our Business Plans at BusinessConceptor.com.

Thrift Store Profitability

Thrift stores are often seen as low-margin businesses, but they manage to stay strong even when times are tough. Let’s look at the numbers to see how much money these stores can make.

In the United States, the thrift store industry is worth a big market size of $12.6 billion. But, each thrift shop makes only around $0 a year on average. Still, they keep making money thanks to a gross margin of 43%.

Thrift shops make about approximately $0 every week. For stores in great spots, this can go up to around $0 per week. These stores have a profit margin of about 43%, which is pretty good for retail.

Thrift store owners can make a good living. A successful store owner in a top location can earn around $0 per week. This shows how profitable these stores can be.

Even though the earnings might not be as high as some other retail areas, thrift stores are very resilient. They do well even when the economy is down. This makes them a strong choice for investment. By knowing the industry well, new store owners can make smart choices and succeed.

For those thinking about starting or growing a thrift store, Business Conceptor has great resources. They offer detailed business plan templates for thrift stores. These tools can give new entrepreneurs the help they need to succeed in this exciting market.

thrift store profit margins

Factors Influencing Thrift Store Profitability

Location and Customer Base

The success of a thrift store depends a lot on its location and who shops there. A small town store might make about $2,000 a month, serving a few customers. But, a trendy store in the city could make $15,000 monthly by drawing in many shoppers looking for deals and unique finds.

Stores in busy spots with strong community ties tend to do better. They pull in more customers and sell more items. The size and layout of the store also matter. They affect how much stuff you can display and sell.

To make more money, store owners should think about the costs of their location. They should make sure the sales and customers are worth the investment. Knowing what makes a thrift store successful helps owners make smart choices and take advantage of this growing market.

Thrift Store LocationAverage Monthly RevenueCustomer Base
Small Town$2,000Limited
Urban Area$15,000Diverse (Bargain-hunters, Vintage Enthusiasts)
Prime Location (Curated)$30,000High-end Collectors, Enthusiasts

For more insights and comprehensive business plans for thrift stores, visit BusinessConceptor.com.

Operational Efficiency and Cost Management

The success of a thrift store goes beyond just making money and knowing who buys things there. Being efficient and managing costs well is key to making more money. Things like effective inventory management, optimized staffing levels, and controlling expenses on things like rent and marketing matter a lot. These can greatly affect how much money a thrift store makes.

Using best practices and always looking for ways to do things better can help thrift store owners make more money. Industry numbers show that thrift stores usually make about 30% to 40% profit. But, some stores can make up to 10-12% profit if they’re really good at what they do. The path to making money can take a year or three for a new thrift store.

To make thrift store operations better, owners should think about these strategies:

  • Make inventory management better to cut down on waste and sell more
  • Manage labor costs by having the right number of staff
  • Keep overhead expenses like rent and marketing under control
  • Use technology to make things run smoother and see things better
  • Keep training staff to work better and serve customers well

By focusing on doing things well and keeping costs low, thrift store owners can make more money. This lets them put more money into their community programs. With over 50 years of helping retailers, including thrift stores, Business Conceptor can help make operations smoother and more profitable.

“Maximizing revenue while minimizing costs is crucial for directing more resources towards community programs.”

Marketing and Branding Strategies

Attracting and Retaining Customers

Successful thrift stores use many marketing and branding tactics to draw in and keep customers. They use social media to show off deals and unique items. They also join local events, run special sales, and have workshops. Plus, they make sure their online presence is strong to reach more people.

This makes shopping at thrift stores welcoming and personal. It helps build a loyal customer group and brings people back.

To get more customers and keep them coming back, thrift stores can try these ideas:

  1. Use social media to share cool finds, budget tips, and connect with the community.
  2. Have special events like themed sales and workshops to make shopping fun.
  3. Make their website easy to use on phones for better online shopping.
  4. Start a rewards or loyalty program to get people to visit again.
  5. Support local charities and events to engage with the community.

With a strong marketing and branding plan, thrift stores can draw in new customers, build a strong brand, and keep a loyal customer base.

Marketing InitiativeObjectivePotential Impact
Social Media CampaignsShowcase unique finds, engage with customers, and build brand awarenessIncreased customer acquisition and customer loyalty
Themed Events and PromotionsCreate a unique shopping experience and drive customer engagementImproved community engagement and increased sales
Optimized Online PresenceProvide a seamless shopping experience and reach a wider audienceEnhanced online presence and increased conversions
Loyalty ProgramIncentivize repeat visits and foster long-term customer relationshipsImproved customer loyalty and increased average customer lifetime value

By using a detailed marketing and branding plan, thrift stores can draw in and keep customers, build a strong brand, and grow their business. To make more money, thrift store owners can look into other ways to make money and work more efficiently.

“Successful thrift stores create a unique and engaging shopping experience that keeps customers coming back.”

Exploring Alternative Revenue Streams

Savvy thrift store owners can find new ways to make money beyond just selling used clothes. They can set up an online sales platform or work with local consignment businesses. These are just a few ways to make more money.

Hosting events is another great idea. This could be special shopping days, workshops, or teaming up with local groups or artists. Renting out space for events or photoshoots can also bring in more cash. Plus, offering crafting workshops lets customers learn to make something new from old items. It builds a creative community.

Diversification StrategyPotential Benefits
Online SalesExpanded customer reach, reduced overhead costs, and opportunities to showcase unique thrifted finds
Consignment PartnershipsAccess to a wider selection of merchandise, revenue sharing, and leveraging complementary customer bases
Event HostingIncreased foot traffic, enhanced brand visibility, and opportunities for community engagement
Rental SpacesPassive income generation, efficient use of retail space, and potential for complementary collaborations
Crafting WorkshopsFostering a sense of creativity, building customer loyalty, and generating additional revenue streams

By trying new things, thrift stores can make more money and stay strong in tough times. They can offer more to their customers and grow in the secondhand market.

“Thrift stores that can adapt and diversify their revenue sources will be better positioned to weather economic fluctuations and stay ahead of the curve in this competitive landscape.” – Retail Industry Analyst

Want to make your thrift store more profitable? Check out our website for great business plans and resources.

Industry Trends and Future Outlook

The thrift store industry has seen steady growth lately. In the U.S., the market size grew by 0.9% each year from 2017 to 2022. Younger shoppers, like Gen Zers and millennials, are driving this growth. They make up over 40% of those buying resale clothes.

More people are choosing sustainable shopping, which has made thrift stores more popular. This trend is expected to keep growing.

Thrift stores need to keep up with new trends, like online resale platforms and technology. These changes help improve shopping and make things run smoother. Laundromats and dry cleaners are finding new ways to make money as the industry changes.

The resale industry is growing fast, with about 7% more stores opening each year. There are now over 25,000 resale shops in the U.S. The used goods market in the U.S. has around 20,000 stores, making about $15 billion a year.

The secondhand and resale market is set to hit about $53 billion in the U.S. by 2023. Worldwide, it’s expected to grow by 24% in 2022. By 2026, the U.S. market is predicted to double, reaching $82 billion.

These trends show how important sustainability, e-commerce, and technology are becoming in the thrift store world. As things change, successful stores will be those that adapt and offer great shopping experiences.

“Almost three-fourths of retail executives are open to providing secondhand goods to customers.”

To stay ahead, thrift store owners should think about making more money. They should invest in technology to improve shopping and match new sustainability and e-commerce trends. By doing this, thrift stores can keep doing well in the future.

Conclusion

The thrift store industry is full of business opportunities for those looking to start their own venture. It offers a chance to make a steady profit and tap into the growing demand for affordable, sustainable shopping. By knowing how to make money, set prices, find the right customers, and run the store well, new owners can aim for secondhand retail success.

Thrift store owners can make between $35,000 and over $100,000 a year. This is more likely in big cities, where stores can make 20-30% more than those in smaller areas. Also, having a strong online sales platform can increase revenue by 15%, showing how important being online is today.

The secondhand retail market is always changing. Thrift stores that keep up with trends and talk to their customers well will do well in the future. They have the advantage of low start-up costs and can connect with their community. This makes it easier for entrepreneurs to succeed and help make retail more eco-friendly.

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between and . Accessories are

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between $2 and $30. Accessories are $1 to $5. Household items range from $1 to $30.

Books and media are $1 to $5. Electronics can be $5 to $50. Shoes are $5 to $20. Children’s items are $1 to $10.

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend $5 to $30 per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to $1,440 a year, adding $750 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make $11,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

to . Household items range from

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between $2 and $30. Accessories are $1 to $5. Household items range from $1 to $30.

Books and media are $1 to $5. Electronics can be $5 to $50. Shoes are $5 to $20. Children’s items are $1 to $10.

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend $5 to $30 per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to $1,440 a year, adding $750 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make $11,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

to .

Books and media are

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between $2 and $30. Accessories are $1 to $5. Household items range from $1 to $30.

Books and media are $1 to $5. Electronics can be $5 to $50. Shoes are $5 to $20. Children’s items are $1 to $10.

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend $5 to $30 per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to $1,440 a year, adding $750 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make $11,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

to . Electronics can be to . Shoes are to . Children’s items are

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between $2 and $30. Accessories are $1 to $5. Household items range from $1 to $30.

Books and media are $1 to $5. Electronics can be $5 to $50. Shoes are $5 to $20. Children’s items are $1 to $10.

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend $5 to $30 per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to $1,440 a year, adding $750 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make $11,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

to .

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend to per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to

FAQ

What do thrift stores typically sell?

Thrift stores have a wide range of second-hand items. These include clothes, accessories, home goods, electronics, books, media, toys, and unique items. They appeal to those on a budget and those who prefer sustainable shopping.

What are the typical price ranges for thrift store merchandise?

Prices at thrift stores vary widely. Clothes usually cost between $2 and $30. Accessories are $1 to $5. Household items range from $1 to $30.

Books and media are $1 to $5. Electronics can be $5 to $50. Shoes are $5 to $20. Children’s items are $1 to $10.

Who are the main customer segments for thrift stores?

Thrift stores attract many types of customers. These include those on a budget, bargain hunters, vintage lovers, eco-conscious shoppers, DIY crafters, and community supporters. Vintage enthusiasts and bargain hunters are key to their success.

How much do customers typically spend per visit at a thrift store?

Customers usually spend $5 to $30 per visit. Regular shoppers visit 1 to 4 times a month. This means they can spend up to $1,440 a year, adding $750 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make $11,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

,440 a year, adding 0 in revenue annually.

What are the typical profit margins for thrift stores?

Thrift stores make about 3.3% profit on each item. This means a 10-person store might make ,880 a year. They remain profitable in good and bad economic times.

What factors influence the profitability of a thrift store?

A thrift store’s profits depend on its location and customer base. It also depends on how well it runs and manages costs. Good inventory management and keeping costs low help increase profits.

What marketing and branding strategies can thrift stores use to attract and retain customers?

Thrift stores can use social media, local events, and special promotions to attract customers. They can also improve their online presence and offer unique shopping experiences. This helps build a loyal customer base.

What alternative revenue streams can thrift stores explore to enhance their profitability?

Thrift stores can earn more by selling online, partnering with consignment shops, hosting events, renting out space, or working with local groups. These strategies can increase their income.

What are the current industry trends and the future outlook for thrift stores?

Thrift stores are growing, thanks to younger shoppers and a focus on sustainability. They need to keep up with trends like online sales and technology to improve customer experiences and efficiency.

Thrift Store Business Plan

Thrift Store Financial Plan

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