Business From Scratch: Used Clothing Store

Taking into account the fact that there are a lot of poor people in the country, you can earn good money selling second hand clothes without huge investments.

We will explain you in detail what exactly should be considered before you start.

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Key success factors of a used clothing store

The success of a second-hand store largely depends on three “L”: location, location, and location once again!

You don’t necessarily have to locate your second-hand store in the close vicinity of merchandise and food markets, or any other crowded places. You can open a decent shop and trade successfully in a household services center, a former tailoring and dressmaking establishment, former cinemas and department stores.

Be careful about renting premises in the city center, since stores in a residential area costing three times less than the ones in the city centre, are capable of providing a much greater turnover.

The second important factor for your future success is the goods, or rather its “price-quality” correlation. You should realize that there are two types of goods: good and cheap. There is nothing in between, but there is always the possibility of purchasing both kinds.

Purchasing of goods and selecting the assortment

Choosing between a cheap and a good product, it is necessary to try different combinations, but it will be impossible to abandon one or the other kind completely without losing certain percentage of your customers.

The required quantity of the goods at the time of a store opening is about 10-15 kg per square meter of premises. Do not forget that once or twice a week you will have to bring more goods, and therefore you will need to have some additional product in stock.

While sorting the clothes experienced traders pay attention to the degree of product run-out in the first place (it is the main indicator of future price formation) and then to the item’s seasonality or trendiness.

When sorting sweaters, blouses, shirts, etc. you have to pay attention to the condition of the collar, cuffs and underarm place. When sorting trousers – look at the inside of the thighs, knees, “seat” areas; skirts – to the “seat” and “stomach” areas. It is important to evaluate not only how shabby the clothes are or whether there are any holes, but also take into account the brightness of the color, the quality of the material, and whether there is a lot of lint.

After sorting the goods into groups, you will have to assess the approximate price per kilogram of things in each of them and set the price for the product on the individual basis.

Store Opening

You won’t need full-scale renovation of the premises since stands with clothes will cover almost all the wall surface. You will just have to refresh the whitewash;
as for the equipment: you will only need tubes to hang hangers with clothes, a few shelves, a couple of baskets and a few mannequins;
fitting rooms with mirrors, and rugs on the floor;
a packing table near the cash register, a place for the storage of bags, a couple of chairs will also be necessary;
you should not create any dark corners in the shop. Good lighting increases the sales.
you will have to control daily cleaning and airing of the premises at any time of the year.
a salesman should be a person whom you trust (since it is quite difficult to monitor sales). At the start of your business you will need to personally be in the store, so you can examine the demand, eliminate drawbacks; and make the shop “alive”.

Pricing

A fixed price per kilogram is used mostly to sell cheap second hand clothes;
selling at variable price per kilogram is a very effective method for the average product category: for instance, on the day of the goods delivery the cost can be as high as 50 USD/kg, and then decrease to 10 USD/kg;
selling used clothing at a fixed price for a thing is a very time-consuming, but effective method for trading average and expensive second hand clothes. In this case every item is examined and given a price tag.

Remember: the cheaper the goods are – the more you will work with the price per kilogram, the more expensive the clothes – the more you will work with price tags.

How much you can earn

A second-hand shop pays off in about six months.

Your average monthly revenue will be more than $ 3 thousand. You will have to spend $ 700 to purchase the goods. Half of the goods will be sold at their prime cost, and you will be able to make 120-150% of profit on the second half.