Right Way to Open a Thrift Store!
Merchandise Bought for $.10 a pound
How to get merchandise for a Thrift Store!
Everyone whether they admit it or not shops thrift stores so why not open your own. Many people open consignment store because they do not know how to get merchandise for their store any other way. In this article I will lay out a way to get quality merchandise for pennies on the dollar. People are use to donating their used or unwanted clothes to thrifts run by charities across the country. Many people do not even know that these thrift stores only give a small percentage of the money to the charity that is on the door. They are run for profits and big profit at that.
I have helped set up thrift stores across this country for people and organizations from all walks of life. The major problem in starting a thrift store is where to get and keep getting good merchandise. If you have a charity to affiliate your business with in order to get donations of goods. Then this is a great way to do it. For most people they do not want to go to the legal steps necessary to take donations and advertise a charities name on their door while being a for profit business. It is not that difficult to set up because I do this on a regular basis but it is not necessary.
I started several years ago helping people start thrift stores by advertising to buy clothing for a few cents a pound. Usually about four to five weeks before the store opens I have them put ads on sites like craigslist and other local internet posting sites. The ad reads simply “Wanted Used Clothing-Will come to your home and pick up. We pay $.10 a pound-Cash paid on spot”. Be sure to list a phone number as well. If you do not want to go to their homes you can have them come to your future store. I have found that going to the homes is a much better way to get started and the merchandise is a better mix. Now you can advertise to buy other products like furniture and household items if you wish. It has been my experiences that when you buy their used clothes and shoes for $.10 or whatever number you come up with that is fair for your area that if you ask if they have anything they wish to donate. You will get the other items.
You will need a SUV, pickup or other type truck to make the pick-ups because when you are buying a few hundred pounds of clothes it takes up room. Usually within two weeks in most areas 5 to 10 thousand pounds of clothes and shoes can be purchased. Let us say you buy 10,000 pounds of clothes and shoes for $.10 a pound that would be $1,000 dollars. The average is about 3 items per pound so you would have 30,000 or so items of clothing to sell. Shoes weigh around 1 pound to 5 pounds depending on whether they are children’s, men’s or women’s. That gives you a cost basis for your clothing of around $.03 per item. Now you will have some of the clothes that are not suitable for reselling and those should be saved. Anything you cannot resell can be saved up and sold to rag businesses. Large thrift stores sell a container of rag clothes for around $.20 a pound. Large thrift stores also sell most of the clothing that is donated to them in container form to wholesale operations that pay around $.30 to $.60 a pound for the clothing then resale it small consignment or thrift stores by the item or several dollars a pound.
By purchasing clothing direct from people you cut out the middleman and set your business up to make huge profits. Even if you sold your clothing for an average of say $2.00 an item you are making a huge profit margin. As you are picking up the clothing you are should also collect email addresses and phone numbers. This is your start of a marketing base to send weekly emails to drive business.
Thrift stores are profitable but like anything you can have the huge profit margins of a thrift store that runs the way I described and still not make it if you do not plan a great marketing structure. Word of mouth is the best and by using this way to buy your merchandise you will get the word out fast.
When you start to set up the store you will need fixtures and racks. These are expensive if you buy them used or new. For thrift store remember you do not need a department store look. So when I buy racks and fixtures for stores that I am setting up I first ask local chain stores if they have racks they are getting rid of and I drive behind the local strip malls to see what has been put next to the dumpsters. By doing this I would say 90% of the fixtures and racks can be gotten if you start around two months before you open. What you cannot find then go online to liquidation auctions and you usually can find fixtures for a few dollars. As a last resort I would go to fixture dealers because you will pay threw the noise and a pretty fixture in a thrift store does not make you money. Hangers are another big expense and these can be gotten the same way I described getting the fixtures by going to local chain clothing stores and asking for them. If they say no their dumpsters always have lots of hangers. Most stores do not reuse the hangers and simply throw them away when someone does not want the hanger.
If you have any questions please post a comment with an email and I will try to get your question answered. A 2,000 to 5,000 square foot store opened the way I have described usually can be opened for around $10,000. Most of that expense is taken up with rent, paint, advertising, cash register and other non-merchandise items. If you have most of these items then you can open for little of nothing.