As we reveiw applications for the 2012 Inc. 500|5000, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. One that caught our eye was Tucson, Arizona-based Buffalo Exchange.

Kerstin Block’s life passion is fashion. And like many successful entrepreneurs, she managed to turn her passion into a successful business.

“I was addicted to shopping for used stuff and bargains, and I figured maybe I was not the only person,” she says.

In 1974, Block and her husband opened the first Buffalo Exchange store in Tucson. According to her, it was the first for-profit store to offer customers the opportunity to buy, sell, or trade clothes and accessories on consignment, a model that has resulted in steady profit growth and expansion since the store’s inception. Now, nearly 40 years later, Buffalo Exchange boasts 42 stores, three franchise locations and more than $72 million in yearly revenue.

Kerstin, 70, originally came to the U.S. from her native Sweden in 1960 to study at the University of Arizona, and returned for good in 1968 after marrying her husband, a U.S. citizen. She started her fashion career working at the Marshall Field’s in Chicago, but was fired for getting pregnant.

After that, she decided to turn her insatiable urge to shop into a store.

“The motivation was that I wanted to buy all these things for myself,” she says. “But I knew there were other people as equally crazy about this as me.”

For $100 per month, Kerstin and Spencer rented a storefront and named it Buffalo Exchange. (Kerstin thought the buffalo was an iconic American symbol.)

The business model is much the same today as it was in 1974: Buffalo Exchange buys clothes at 35% of what it plans to sell them for, or gives sellers 50% off the sale value if they elect to trade. If an item isn’t sold within a month, which Kerstin says is atypical, its price gets cut in half. The company’s cost of goods sold is around 45%, a model that has spurned slow but steady growth.

After a successful first year, the Blocks expanded into the space next door. The company outgrew that location, and opened up a second Tucson location. The continued success led the Blocks to dispatch employees to different cities to open up new locations. Next came Tempe, Arizona; then the California Bay Area in 1978; then Southern California; from there, Oregon and Texas; and then to New York City and other cities along the East Coast. Buffalo Exchange is now available in 15 states nationwide.

However, Kerstin’s store is no longer the only consignment shop on the block. Kerstin ran Buffalo Exchange with her brother-in-law, Gerald Block, for many years. But in 1991, the two had a falling out, and shortly thereafter Gerald co-founded Crossroads Trading Co., Buffalo Exchange’s chief competitor. Kerstin claims that Crossroads opens stores in locations where Buffalo Exchange is already established.

“We do it all first, and then they copy us,” she says. “But (the competition) has made me a better businessperson.”

Despite saying that his business relationship with Kerstin failed, Gerald says Buffalo Exchange is a "good competitor" run by "good people."

Kerstin has remained unfazed. This year, her company is projected to increase revenue by about $4 million and to open a new location in Washington, D.C.