Female Traders Drive Guatemala’s Secondhand Clothing Economy’s Real Value

The prominence of women in Guatemala’s SHC economy is more than a statistical nugget. It reflects how survival strategies and small-scale entrepreneurship converge in a country where most jobs lie outside the formal economy. For thousands of households, ropa cruda is not a sideline but the cornerstone of income — and women are the ones running the trade.

Yet the system is fragile. Jennifer Wang, Chief Executive Officer of Full Cycle Resource, warns that looming regulatory changes could erode the margins on which traders depend. “Policy changes affecting how import quality standards, compliance requirements, or associated costs could directly erode profitability, impacting women concentrated in lower-value market segments. To strengthen economic resilience, policies should maintain accessible market entry while integrating targeted capacity-building, financial inclusion, and mechanisms that safeguard traders against adverse shifts in trade and quality regulations.” Her concern highlights the vulnerability that accompanies empowerment: while the sector gives women ownership and agency, it leaves them exposed to shifts far beyond their control.

The data illustrates just how precarious those margins are. In market surveys, traders reported balancing purchase prices of bales against uncertain resale outcomes, relying on knowledge of local demand to extract value. Unsold goods are pushed through markdown cycles and then redistributed into rural areas as saldos. At Megapaca, roughly 25% of stock remains unsold after its retail cycle and is channelled into the saldos market. This redistribution underscores the layered resilience of the system but also the absence of safety nets: if garments cannot be sold at some price, traders risk losses that directly impact household survival.

Megapaca’s experience mirrors this logic of redistribution. Mario Peña, General Manager of the retailer, explains: “We work closely with our suppliers to track the quality of items, choosing partners that source items carefully and that look after their product during initial sorting and transport because they know that these are valuable, reusable garments that customers want to buy. The percentage of product that remains unsold at the end of our markdown cycle is not waste – it is reusable, and we send this unsold inventory to smaller retailers and to rural markets to continue the reuse cycle. Our priority is always reuse: we also have repairs, we have shoes and household items. We repair, clean and rescue these products, which we know are not waste.

For female traders, this cycle of circulation represents both opportunity and risk. They manage purchasing, grading, repairs, sales and markdowns, while also juggling household responsibilities. The flexibility of stall ownership makes participation possible, but the volatility of earnings leaves them exposed to shocks. Policy interventions that alter supply chains or impose new costs threaten to push already fragile livelihoods on the verge of collapse. At the same time, the persistence of redistribution cycles highlights the ingenuity with which women sustain incomes from resources often dismissed abroad as waste.

Empowerment here is not about high margins or capital accumulation. It is about securing consistent cash flow, narrowing income gaps, and creating stability in an economy where formal employment options are scarce. The Guatemala Report suggests that the secondhand clothing sector is unusual in giving women a relative advantage, even if modest, in comparison with other industries. That advantage, however, depends on a system that remains politically vulnerable. The empowerment achieved through ropa cruda is therefore inseparable from the risks women face if policy frameworks fail to account for their role.

For years, debates about secondhand clothing in Guatemala have been shaped by numbers that only tell part of the story. Official trade statistics record imports at their CIF value — the cost, insurance and freight paid at the point of entry. On paper, this makes the industry appear small compared to Guatemala’s formal export sectors. But the real value of secondhand clothing is generated after the bales are unpacked. It lies in the labour of traders, the redistribution of goods through multiple channels, and the environmental savings of reuse.

Jennifer Wang argues that measuring value only at the point of import fundamentally misrepresents the sector. “Indeed, value-added calculations in the SHC trade should extend beyond conventional metrics tied to cost, insurance, and freight (CIF) values or material throughput. Current trade statistics often undervalue the economic significance of the sector by ignoring the downstream value that comes from functional circularity and labour benefits. In many importing countries, the bulk of value addition occurs after importation, through, for example, sorting, grading, repair, retailing, and redistribution, all of which can generate employment, sustain micro-enterprises, and prolong the lifespan of products.

“Focusing narrowly on material flows and CIF valuations, existing frameworks can obscure the sector’s role in extending product utility, reducing waste, and supporting livelihoods. Instead, we could be incorporating indicators for labour intensity, skill application, and waste diversion outcomes into trade and circular economy reporting. This would better capture the developmental and environmental contributions of SHC markets, providing policymakers with a fuller understanding of how functional circularity intersects with economic inclusion, showing that value is measured not solely at the point of import but across the entire lifecycle of the product.”

The Guatemala Report backs this up with evidence. A single bale of ropa cruda can pass through several owners, each extracting income at different price points. Higher-quality garments might be sold at urban stalls, while cheaper items are channelled to rural markets as saldos. Along the way, garments are washed, repaired, ironed and displayed—activities that require time and skill. These processes not only add economic value but also create employment, much of it for women. In comparison, CIF values ignore this multiplier effect and reduce the sector to the cost of imported bundles.

Lisa Jepsen, Chief Executive Officer of Garson & Shaw, emphasises that this undervaluation also distorts debates about circularity. “Reuse remains one of the most effective and immediate ways to reduce the amount of clothes going to landfill. While fibre-to-fibre recycling represents significant potential, it remains far from being commercially scalable today. Clothing reuse, on the other hand, is already successfully diverting textiles from landfills, reducing environmental impacts, and supporting local economies in Guatemala and elsewhere. In our view, reuse directly reduces waste, conserves resources, and must be prioritised and actively supported in policy and investment decisions as a proven circular solution.” Her point is that reuse delivers tangible outcomes now, while recycling remains largely aspirational.

The environmental logic is reinforced by the report’s data: between 88% and 92% of imports are reused, waste averages around 10%, and in pre-sorted consignments waste drops to 8.4%. These figures compare favourably with textile disposal rates in higher-income countries, where recycling systems are more advanced on paper but less effective in practice. In Guatemala, reuse operates as functional circularity, keeping products in circulation and extending their lifespans.

The tension between perception and practice is stark. Critics in the Global North frame the trade as dumping because they see clothing at its point of arrival. What they miss is the work that transforms those imports into livelihoods and stretches the usefulness of garments far beyond their first purchase. Value here is not just monetary but social and environmental. When measured correctly, Guatemala’s secondhand clothing sector emerges not as a problem but as an undervalued solution.

In Guatemala’s SHC economy, credibility is as important as commerce. With critics in the Global North quick to brand imports as dumping, the ability to demonstrate rigorous data collection and transparent supply chains is essential for market legitimacy. Without credible evidence, policymakers in the Global North can dismiss the trade as informal or unregulated. With it, Guatemala can show that reuse is real, livelihoods are genuine, and circularity is already functioning.

Richard Wang, Co-Founder of Full Cycle Resource, places credibility at the centre of their research design. Wang speaks about approach: “The survey was deliberately designed with built-in redundancy, crossreferences, and verification checks. This approach ensured data reliability but also meant that each interview required, on average, about 20 minutes to complete.

“In the survey, several questions were repeated in different formats to enable cross-verification. For instance, retailers were asked to indicate the total number of clothing pieces in a bale, followed by a breakdown of the sub-categories within that bale. The sum of the sub-categories was then checked against the overall figure to ensure consistency. Waste stream evaluation was carried out by comparing the number of pieces respondents identified as waste with their separate estimate of waste volume, also expressed in number of pieces.”

For businesses, credibility requires more than surveys. It also means transparency in how stock is managed and who handles redistribution. Mario Peña of Megapaca explains how centralisation serves this function: “As the report published by Garson and Shaw points out, the amount of used clothing that comes to Guatemala is significant, and we are one of many companies that are working to help reuse these items. In our case, we make sure that the items all come to a central location where we consolidate them and ensure they can be reused. We work solely with reputable partners and sell to companies that are tax registered.”

The contrast with municipal systems is striking. Waste management in Guatemala is weakly enforced, and textile separation is rare. In this vacuum, private actors such as Megapaca step in, using business processes to substitute for absent public oversight. The result is a hybrid system where circularity is maintained not by state intervention but by traders and companies whose survival depends on proving their credibility to both consumers and regulators.

For the broader debate, this credibility is more than technical. It is political capital in a world where the future of SHC is being debated in international policy forums. If evidence can show that imports generate jobs, extend product life, and narrow gender inequities, then Guatemala’s markets move from being framed as waste sinks to recognised examples of circular practice. Legitimacy here is not abstract; it is the difference between having a seat at the table or being regulated out of existence.