How to Start Your Own Thrift Store
Resale shops, Thrift stores, Junk shops, Second Hand stores and Vintage markets are very popular with lots of shoppers. Thrift stores and antique store sales amount to billions of dollars in revenue each year. In the United States alone, used merchandise stores have a combined annual revenue of nearly $17 billion! People looking for bargains in clothing, or collectors looking to add to collections or even those interested in the “funky” find, have been flocking to these venues for years. If designed properly, they can be a very fun and a profitable way of having your own business. But, like all start up businesses, there are some basic rules and steps to take to make sure that you have a success!
Opening a thrift shop does involve some licenses, a good inventory and lots of planning. You don’t have to have a packed shop to open a thrift store.Just a few items for sale, a place for people to come buy what you have and a way to take the money and you can be in business.. But, making a thrift store operation successful is a bit more complicated.
Many thrift shops are not for profit and they benefit a certain organization. It may allow you to apply for free or low-cost rent, advertising and other business necessities but your day to day management may be inhibited by additional government regulations. Whereas, starting a for profit thrift store business will allow more freedom in your management style and allow for larger profits. It may also mean you are eligible for fewer grants and fewer low-interest loans. Your business may not qualify for tax-exempt status even if you are donating some of the proceeds to charity. Decide if you want to start a thrift store that is a for profit or not for profit business. There are benefits and drawbacks to both. Talking with a certified business planner or attorney before you decide can help with the direction that you pursue.
Write a business plan that carefully outlines the way your store will operate. Include how you will find and then purchase your inventory. And show the projected profit margins, the estimated payroll and other details that demonstrate that you understand what is involved in the business. You will refer to this plan often as it is the Map for your business.
Paying taxes is the rule of life and business so you will be required to get an Employer Identification Number, or EIN, which you can get from the IRS online. Your EIN will also come in handy when registering your business for state taxes. The licenses required for your store depend on the location of the thrift store and its purpose. If it's run for and by a charity, rather than for profit, the licensing and registration may differ. The store will most likely need to have a reseller license, sometimes called a sales license, to collect state sales tax.You will also need a business licenses required by your local municipality, insurance policies and tax account status forms.
Location, location, location as the old saying goes! You will need to look for a space somewhere in, near or around where people shop. It should have ample parking, good lighting and a display-style window where you can set up prime items to entice shoppers into the store. Choose a spot that gets lots of drive-by traffic. If possible, situate the thrift store near other bargain stores or manufacturing outlets and second hand stores. When choosing the site, keep in mind how much inventory you'll be offering. A crowded store is difficult for customers to navigate and find what they want. A large store with the merchandise spread out looks like it doesn't have much to offer.
Now the fun part! Sketch out a basic floor plan that includes “areas” or “rooms” and then decide what type of merchandise you are going to sell in each area. This will help you narrow down what type of display fixtures you need to purchase. You can buy them at fixtures stores or buy them from businesses that are closing.
Thrift stores can offer all sorts of products from clothing to baby furniture to gardening products, or the store may specialize in one type of product, say, gently used dishes. Scout the competition to decide if you should generalize or focus on one type of product and, if so, which one. Select something that you are interested in and knowledgeable about.Things you can choose from may include;
Bridal and prom dresses
Washers and Dryers
Games and sports cards and vintage game systems
Art and art supplies
Computers and parts
Purses and shoes
Stock your current inventory and make it ready to sell and see how much space you have left over that you need to fill up.Then, go out on a shopping spree! Buy only those products that you know can get a markup of at least 50 percent or more. The typical retail markup is 50 percent. In the retail industry this is called "keystone." For example: If you purchase a product at $1.00, then the retail price will be $2.00. The markup is $1.00 and is calculated as a percentage of the retail price, or 50 percent.
Most thrift stores stock gently-used, previously-owned goods with a lot of variety. More than likely, you will need much more inventory and back stock in order to look full enough to open. Advertise for donations to stock the store. Visit bulk distribution centers where used goods can be purchased by the pound instead of per piece. Check your local paper for storage unit auctions. Visit yard and estate sales toward the end of the sale and offer to purchase the unsold items as a lot. And you should attend Storage Unit auctions where you can buy full unit full of possible treasures!
When you are satisfied that you have enough inventory, let the world know that you are open.You will want to start advertising heavily 2 to 4 weeks before your grand opening date. Create a Facebook page and a Website that you can easily and inexpensively make all announcements. Run a marketing saturation campaign using direct mail postcards, banners and signs. The week before your grand opening date, issue press releases to the local media and take out an advertisement in the local media. Then, after you have opened, you will need a marketing plan to let potential customers know what’s new and exciting and what kinds of products you have. Use newspaper advertising, establish a website and develop a promotional program. Your shop needs to stay front and center and keep your communications going for the long term.
And finally, cash and checks may seem to be the most convenient ways for you to collect the money from sales. Credit or debit card transactions involve fees and applying for and being accepted for a merchant account with a company that processes the transactions. Talk to your bank and inform them of your plan. They have many new ways for you to collect payment and they will help you all along the way.
If you are a collector of treasures and know a thing or two about the value of unique finds, then a Thrift/Junk/Resale/Vintage Store can be your dream come true!