How to Start a Resale Business

Resale businesses contribute to environmental sustainability by recycling clothing, furniture, and other household items. Many resale businesses operate online, while others maintain physical stores within local communities. Some accept donations only on-site, while others provide pickup services. Resale business owners and employees create attractive displays that change frequently according to available goods and the popularity of particular brands or items. Typically, resale business owners maintain mutually beneficial relationships with charitable community organizations as well as their regular customers.

Learn how to start your own Resale Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Resale Business Image

Start a resale business by following these 10 steps:

  • Plan your Resale Business
  • Form your Resale Business into a Legal Entity
  • Register your Resale Business for Taxes
  • Open a Business Bank Account & Credit Card
  • Set up Accounting for your Resale Business
  • Get the Necessary Permits & Licenses for your Resale Business
  • Get Resale Business Insurance
  • Define your Resale Business Brand
  • Create your Resale Business Website
  • Set up your Business Phone System

We have put together this simple guide to starting your resale business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

  • What are the startup and ongoing costs?
  • Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Resale Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your resale business?

Business name generator, what are the costs involved in opening a resale business.

While opening a resale business costs less than many others due to the fact that some merchandise is donated, it does require some startup capital. The amount depends on whether your business is conducted online, at a flea market, or in a store. For a physical store, business licenses, liability insurance, space rent and merchandise are among the initial startup costs . Those costs can range from as little as $5,000 to as much as $30,000, depending on the type of items being sold and the percentage of your inventory that comes from donations. Start-up and operating costs can be reduced by utilizing software developed specifically for resale businesses. That software allows you to automate tasks such as maintaining customer databases, tracking sales and inventory, and creating sales promotions.

What are the ongoing expenses for a resale business?

Depending on the type of resale business, ongoing expenses may include space rent, website maintenance, a business phone, employee salaries and a company vehicle for picking up donations. For online businesses, your main costs will include managing a warehouse and preparing and shipping orders.

Who is the target market?

Preferred clients are those who purchase items for their own use, rather than for resale purposes.

How does a resale business make money?

A resale business makes money by selling used merchandise at a profit. Competitive pricing that factors in the cost of merchandise and operating expenses is crucial to the success of any retail business.

The amount you can charge customers is based partly on your chosen target market and the amount of competition for that market in your area. Pricing is based in part on ensuring that there is a profit after operating costs are subtracted from sales figures. Other factors that affect pricing include the quality of the items, their current market value, and the strength of the local economy. Some resale businesses specialize in selling large quantities of low-cost items, while others focus on selling high-cost items. High-end designer fashions, appliances, and furniture command a higher resale price than lesser-known brands even though the quality may be comparable. The ambiance of your store and the language used to describe your merchandise can also affect pricing.

How much profit can a resale business make?

The amount of profits a resale business can make depends on its resources. Those resources include merchandise and equipment as well as human resources. Knowledge, expertise and the development of company and community relationships all contribute to increasing profits. Annual earnings for small resale businesses average from between $30,000 and $60,000 .

How can you make your business more profitable?

You can make your business more profitable by conducting regular market research, which includes visiting competitors to compare prices and find new ways to set yourself apart. Increasing your donations by offering convenient pick-up and purchasing items in bulk from wholesalers whenever possible can also increase your profit margin.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your resale business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a resale business business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Certificate of Occupancy

A resale business is generally run out of a retail store. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO) . A CO confirms that all building codes, zoning laws and government regulations have been met.

If you plan to lease retail space:

  • It is generally the landlord’s responsibility to obtain a CO.
  • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a resale business.
  • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

If you plan to purchase retail space:

  • You will be responsible for obtaining a valid CO from a local government authority.
  • Review all building codes and zoning requirements for you business’ location to ensure your resale business will be in compliance and able to obtain a CO.

Certain resale products cannot be sold . These products are determined federally and include products that have been recalled, that don’t comply with the federal limit on lead, unsafe toddler and infant products, and anything in violation of CPSC’s safety standards, bans, rules or regulations.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Resale Business needs and how much it will cost you by reading our guide Business Insurance for Resale Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a resale business

Studies show that for resale businesses, experiential marketing that utilizes all the senses is more effective than traditional marketing techniques. Thrift store shoppers are seeking pleasurable visual, auditory, and tactile experiences as well as unique items at bargain prices. That’s why many successful resale business owners both attend and organize community events such as bake sales, local plays and art exhibitions. It’s also helpful to keep abreast of resale trends by reading articles that discuss recent studies and research within the industry.

How to keep customers coming back

Successful resale business owners know that one of the things that keeps their customers coming back is the constantly changing inventory. Prominently displaying the most popular brands and highest-quality items is a good way to attract attention to them. Offering specials such as buy one, get one free is also an effective marketing strategy. Discounts and markdowns using colored tags are also great incentives for budget conscious customers. Whatever strategies you use must include friendly, helpful customer service. Not even a free gift can replace a warm greeting or an offer to help a customer find exactly what they’re looking for.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

TRUiC's Startup Podcast

Welcome to the Startup Savant podcast , where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.

Is this Business Right For You?

This is a great business for those who enjoy interacting with people while treasure-hunting for bargains at flea markets or estate sales. Those who have a talent for finding bargains and negotiating prices can transform that talent into a successful resale business. It’s also a good choice for recycling enthusiasts who want to save usable items from landfills and help conserve natural resources. Community-oriented people who want to help provide necessities for low-income residents at reduced prices are also good candidates for this business.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a resale business?

  • Accepting donations and purchasing merchandise from various sources such as wholesalers, local charities, estate sales, and yard sales
  • Separating, cleaning, repairing, pricing and displaying donated and purchased items
  • Market research and targeted advertising
  • Attending community events, advertising and creating sales promotions
  • Interacting with donors, vendors and customers
  • Training, scheduling and managing employees

What are some skills and experiences that will help you build a successful resale business?

Many people gain experience in the resale business through garage sales, flea markets, or selling items online before starting their own businesses. Whether your store is online or has a physical location, negotiation skills are essential, since profit depends on purchasing items for less than their resale price. Market research skills are as vital for pricing merchandise as good customer service skills are for building a regular clientele. An artistic eye is also helpful for creating attractive displays that showcase your goods in the best possible light.

What is the growth potential for a resale business?

Resale businesses can become so successful that they are able to offer franchise opportunities for others. Play It Again Sports is a good example.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

Although it is possible to start and maintain a small resale business without assistance, successful expansion requires additional help. There are a number of options for building a team. One is to create a partnership in order to share expenses and responsibilities. Another is to hire employees at a regular wage, as your revenue increases to allow for an expanding staff. Profit sharing is becoming an increasingly popular option, since it reduces expenses and increases incentive.

Useful Links

Industry opportunities.

  • Association of Resale Professionals
  • Franchise opportunity

Real World Examples

  • Profile on a thrift store
  • Experience of couple that started a resale shop
  • 19 different types of resale shop
  • Independent resale shop
  • Article on the resale industry

Further Reading

  • Graduate thesis on second-hand retailing

Have a Question? Leave a Comment!

Starting a Business | How To

How to Start a Consignment Shop in 9 Steps

Published January 12, 2022

Published Jan 12, 2022

Meaghan Brophy

WRITTEN BY: Meaghan Brophy

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This article is part of a larger series on Starting a Business .

Starting A Business?

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  • 1 Choose the Right Type of Consignment Shop
  • 2 Create Your Budget
  • 3 Create a Business Plan
  • 4 Select a Storefront
  • 5 Acquire Merchandise
  • 6 Design & Outfit Your Store
  • 7 Advertise
  • 8 Hire & Train Employees
  • 9 Plan & Launch Your Grand Opening
  • 10 How to Start a Consignment Shop FAQs
  • 11 Bottom Line

To start a consignment shop, as with any business , you’ll need a prime storefront and a strategy for acquiring customers and merchandise. It involves choosing a niche, establishing a budget and business plan, finding merchandise and laying out your store, advertising, staffing up, and, finally, opening to the public.

Starting a consignment store can cost up to $10,000, according to a commonly reported figure from Entrepreneur, with average salaries for consignment shop owners ranging from $40,000 to $60,000. Here’s how to start a consignment shop―as a brick-and-mortar store―in nine steps.

1. Choose the Right Type of Consignment Shop

If you’re wondering how to start a consignment shop, the first step is to narrow down exactly what kind of store you want to open . The most successful stores cater to a specific audience and have a specialty or focus area that helps them stand out from other online or offline retail competitors. To make the most money with your new business, choose a product area that is in high demand and/or hard to find, to lure shoppers into your store.

Designer & Luxury Goods

The secondhand luxury and designer goods market was worth an estimated 33 billion euros in 2020 (about $37 billion), a figure expected to continue to rise. These are popular items because shoppers can purchase products that may otherwise be outside their budgets. People looking to get rid of gently worn designer products often opt to sell them to a consignment store rather than donating to get a partial return on their investment.

Popular designer goods to sell include watches, jewelry, sneakers and other footwear, handbags, wallets, jewelry, and apparel.

Showing different kinds of apparel.

The apparel resale market will hit $77 billion in the next five years , according to ThredUP.

LXR is an online consignment shop for luxury and designer handbags and accessories. The store focuses exclusively on authentic designer label goods. It also purchases used goods to sell on its site.

Apparel & Footwear

Clothing and shoes are popular secondhand items, even if they’re not expensive designer-label. More than three-quarters of people who’ve never done it would consider selling secondhand clothes. They’re relatively easy to source—more than 95% of the 36 billion tossed clothing items each year could be salvaged—and they’re items for which there will always be demand.

In fact, clothing is the most-purchased secondhand good . And as much as 7% of the average person’s wardrobe consisted of used items in 2019, a figure expected to hit 17% in 2029.

The largest target market for this type of consignment shop are Gen Z women, according to ThredUP. So keep those styles and trends in mind if you’re going after that audience.

Omnia is an excellent secondhand apparel and accessories shop to check out for inspiration. It sells a carefully curated selection of used vintage goods.

Showing an Omnia shop page.

Secondhand books are another popular consignment category. In addition to regular paperbacks and hardcover books, some used bookstores deal in rare books, such as antiques and signed copies, or specialty books like cookbooks and textbooks.

Popular websites like ThriftBooks and Better World Books are examples of online retailers that have found success swelling used books. Puerto Rico-based El Coquí Bookstore sells used books in-store only—shoppers have to visit the shop and explore the wide array of books in a variety of languages.

Children’s Wear

Clothing for children and babies is a popular and profitable type of consignment store. Since parents have to purchase clothes for growing children very often, many turn to secondhand stores as an affordable option. Plus, you’ll have a steady supply of parents looking to sell their children’s gently used clothes.

Once Upon A Child is an example of a secondhand shop that sells both children’s clothing and toys. The brand operates several retail shops as well as a full online presence.

Online Consignment Shop

During the past several years, online consignment stores have become very popular, especially for apparel and accessories. Starting an online consignment shop gives you a wider customer base than a local store.

Check out these resources to help you learn how to start selling online:

  • How to Start an Online Store
  • Best Ecommerce Platforms
  • How to Set up Click and Collect

One key thing to remember when starting an online consignment shop is that you’ll need to photograph each item individually. This can be time-consuming, so it’s important to weigh how much time it’ll take you against the opportunity for profit.

Pop-up Consignment Shop

If you’re not ready to commit to a full-time storefront, having a pop-up business is a great way to test products and locations before diving in. If you’re looking to start a consignment business as a part-time venture or side gig, having temporary stores is a good option as well.

Pop-up shops come with less commitment, so they’re a great way to get into retail without all the overhead of running a permanent storefront. This is exactly the approach that Grapevine Events takes with their secondhand goods pop-up shops. As a result, they’re also able to offer higher rates to consignors.

2. Create Your Consignment Shop’s Budget

Once you know what kind of store you want to open, the next step in how to start a consignment shop is setting a budget for your store . To set your budget, first consider your current income and savings. What can you save and set aside for your new business venture? How much outside funding will you be able to get from personal loans, business loans, business credit cards, and so on? Opening a consignment business requires a lot of upfront cash. Once you’re open, it will take time to build your sales volume.

Next, estimate your expenses for opening your store. Include how much you can spend on a storefront, outfitting the inside of your store, signs, and marketing, and your initial product purchase.

Now, estimate your monthly expenses for once you open. Include set bills like rent, phones, internet, payment processing, and so on. Also factor in advertising budgets, employee salaries, merchandise purchase orders, and other store supplies.

The hardest part of setting a budget for a business that is not yet open is predicting your monthly sales volume. This is especially hard for apparel and retail businesses as sales can fluctuate drastically, depending on the season, holiday, weather, economy, and consumer confidence. According to the Retail Owners Institute , used merchandise retailers had an average inventory turnover rate of 4.1 in 2021. That means they sold through and replaced all of their inventory about four times throughout the year.

Keep that number and your total inventory value in mind when estimating your monthly sales. Err on the side of caution, and plan for lower sales when you open, so that you have enough cash flow to cover expenses. Subtract your estimated monthly expenses from your estimated monthly sales, and that will give you an approximate monthly cash flow for when you open.

Pro tip : Retail is an extremely seasonal business. Most retail businesses bring in a ton of money around Christmas and the winter holidays. There are also spikes in revenue around back to school shopping, and spring holidays such as Mother’s Day and Father’s Day. Your monthly sales can vary, so always have extra cash on hand to cover slower months.

3. Create a Business Plan for Your Consignment Shop

Once you figure out what kind of consignment business you’d like to open, you’ll need a solid business plan to piece together all your ideas and form a strategy for making your store profitable. If you’re seeking outside or startup funding such as a bank loan, your business plan will be evaluated during the approval process.

Here are the nine elements found in a typical business plan :

  • Executive summary : An introductory paragraph outlining your consignment shop’s purpose, mission, and why it will be successful.
  • Business description : Describe what need or market hole your consignment store is filling in the community, who your customers will be, and the talent on your team.
  • Market analysis : Write an overall outlook on the consignment and resale industry including trends, what successful competitors are doing, and what your strengths will be.
  • Organization and management : Outline who will be running your business and the experience your team members have in retail, consignment, or your store’s area of specialty.
  • Product line : Outline what kinds of products you will sell, how you will sell them, and where your supply will come from. Include research on why you’re selecting those products, such as sales trend data.
  • Marketing and sales : Describe your general marketing strategy and your plan for attracting and retaining customers.
  • Funding requests : If you need outside funding, outline your needs and specify exactly how you will use the funds.
  • Financial projections : Detail how your business will become stable and profitable, including a projected financial timeline of at least five years. If you are borrowing funds, include a plan on how you will be able to repay the loan.
  • Appendix : Use this space for any supplemental documents, such as logo or branding designs, sketches of what your consignment shop will look like, credit histories, licenses, permits, etc.

When writing a business plan, use the format and software you’re most comfortable with. Many people use a traditional word processor like Microsoft Word or Google Docs. You can also create your business plan in a presentation format using PowerPoint or Google Slides. There are also business plan software programs that offer templates and guide you through the process.

Choose the Best Legal Structure

Choosing a legal structure for your consignment business is important because it dictates how you will collect and report taxes, your level of personal liability, and how you will get paid from your business. There are many types of legal structures, but the three most commonly found in retail are sole proprietorships, limited liability companies (LLCs), and corporations .

  • Sole Proprietorship
  • Limited Liability Company
  • Corporation or C-corp

If you don’t set up a legal structure for your business, this is the default. Operating under a sole proprietorship essentially means you’re doing business as an individual and, therefore, are not separated from your business in any way. Sole proprietorships are popular options for freelancers, business consultants, and other individuals conducting low-risk and low-visibility work by themselves.

With sole proprietorships, your business revenue is considered personal income. This means you will pay sole proprietorship taxes based on your personal income bracket. While you are subject to self-employment taxes, you do not have to pay any corporate taxes, which is a plus.

However, sole proprietorships also come with greater risk because you and your business are one and the same. Your personal assets, such as your house and car, are at risk if there is any kind of lawsuit against your business or if you declare bankruptcy.

LLCs are legal structures for small businesses that protect your personal assets, such as your house and car, in the case of lawsuits or business bankruptcy. This is the most popular legal structure for small retail businesses and the one we recommend if you are planning on maintaining a single consignment storefront.

If you’re the single owner of the LLC , you’ll likely still pay taxes the same way you would as a sole proprietorship but with the benefit of personal assets protection from liability. However, many states have separate LLC taxes, which may make it more expensive than operating as a sole proprietor. It’s always best to check with your local regulations.

To form an LLC, you need to choose an official name and file paperwork to establish your company, whereas a sole proprietorship doesn’t require any paperwork. Luckily, the paperwork isn’t overly extensive and can be filed easily in a few steps using a tool like LegalZoom .

Corporations are the most structured legal form for your consignment business. They have strict tax guidelines. When you create a corporation, it’s a completely new and separate entity in the eyes of the government and the IRS.

Corporations are an ideal structure for consignment businesses that want to expand into multiple storefronts, become a public company, or want to secure a lot of outside funding. Corporations provide you the most personal liability protection out of the three legal structures. However, you will need to pay federal corporate tax on top of personal income tax. Corporations are also expensive to form and require you to keep detailed business records.

Organize Your Finances

No matter which legal structure you choose, getting your finances in order is a crucial step. This involves opening a business checking account to separate your personal and business finances right from the beginning. Having two separate accounts makes it easier to monitor your business’ cash flow and track expenses accurately and will make the process of filing taxes much easier.

Chase is a great banking solution for retailers because it offers small business checking, business credit cards, and merchant services―payment processing―so business owners can manage all their cash flow in one place. Plus, Chase offers competitive rates and great customer service. Contact Chase to learn more about its small business retail solutions.

Learn more about the best small business checking accounts .

4. Select a Storefront

Choosing a storefront is a critical step that needs to be considered carefully. The location you select can all but make or break your business. The decision can seem overwhelming. So, start by narrowing down a geographic location. You’ll be spending long hours at your consignment shop nearly every day when you first open. Think about how far you are realistically willing to commute and choose areas that are accessible from your home easily.

Spend time in each area to become familiar with specific neighborhood demographics and preferences and scope out other local businesses. There are many factors that go into choosing the right location for your business, but it all comes down to picking the location that will attract the most customers.

A woman looking at a storefront.

Choose a storefront that gets a lot of foot traffic for increased sales and visibility.

Determining foot traffic can help you figure out how many walk-in customers you can expect in each location. In addition to staking out your prospective storefront locations, ask other local business owners questions about the traffic, shopper demographics, and neighborhood.

Additionally, consider details such as parking and signage. A Main Street location is ideal, but only if your customers can park near your store easily. Likewise, you’ll want a location that allows for a big storefront sign. Some locations have strict rules about the sizes and types of signage they allow.

Showing a map of used clothing store buffalo exchange locations across the US.

Used clothing store Buffalo Exchange has several locations across the US. Many of the stores have been strategically placed in college towns where they have a steady stream of supply and demand from students. (Source: Buffalo Exchange)

5. Acquire Merchandise

Finding merchandise to sell at your consignment shop is trickier than sourcing products for traditional retailers . You’ll want to have a buying strategy in place before you open to ensure a steady stream of products to sell. You’ll probably use a combination of tactics to keep your store stocked.

Popular secondhand product sourcing strategies include:

  • Joining the Association of Resale Professionals (NARTS) : This professional organization connects resale buyers with suppliers through its directory.
  • Advertising to potential consigners : Advertise in print and online (on social media too!) regularly that you’re purchasing gently used items. Many of your potential shoppers could also be suppliers.
  • Purchasing from flea and thrift shops : You can find some great deals on products to sell in your store by searching through flea markets and other thrift stores.
  • Finding an off-price supplier : Off-price products aren’t secondhand, but they’re deeply discounted products that are either overstock or slightly damaged. You can find them through trade shows.

6. Design & Outfit Your Consignment Store

After securing a storefront and finding product sources, it’s time to start strategically planning your store layout . Your store layout has a dramatic impact on in-store sales. A well-designed layout will welcome shoppers, make them feel comfortable, and direct them toward specific products.

The first thing you need to decide is what type of floor plan you want. Most retail stores fit into one of three basic layout categories:

  • Loop or racetrack : Best for specialty stores, showrooms, and retailers that want to lead shoppers on a specific path throughout the store.
  • Grid or straight : This floor plan is exactly what you would expect: straight, angular aisles that are typically found in grocery and box stores. A consignment bookstore may also follow this model.
  • Free flow plan : This is a popular plan for boutiques and allows for lots of creativity in the design process. Most apparel or decor consignment shops will follow this model.

Finally, you will need to position your checkout counter. A well-positioned checkout will open up floor space for displaying products and encourage shoppers to move through more of your store. As a rule of thumb, try to position your checkout on the left-hand side of your store.

Shoppers naturally veer toward the right side of a store, so that’s where you want to display your best products. Some department stores and larger mall retailers place their checkout counters at the back of the store. However, for smaller retailers, placing your checkout toward the front makes it easier for staff to attend the register and keep an eye on the entrance.

Select a POS System

Point-of-sale (POS) systems are cloud-based software programs that replace traditional cash registers and offer additional tools such as inventory management, sales reports, and customer data and marketing. Your POS system is the central hub for your business where you process all transactions. Look for a system that has all the features you need, including payment processing, for an affordable rate.

Showing Lightspeed Retail POS hardware.

Lightspeed Retail POS simplifies the process of running a retail store. (Source: Lightspeed Retail)

Some of the criteria we use to evaluate the best POS systems include:

  • Price : Most POS software programs charge a monthly fee, and some also charge extra for certain features.
  • Ease of use : Test out each POS with a free demo or trial to make sure the interface is easy to navigate, and also read user reviews.
  • Customer management tools : Almost all POS systems have a customer directory feature but, otherwise, they vary greatly in what loyalty, marketing, and customer feedback features are included.
  • Sales reports : Each type of POS solution will have some kind of reporting tools, but some offer more details and features to create custom reports.

For brick-and-mortar stores, we often recommend Lightspeed. It’s a small business POS with big-business functionality such as custom report builders, detailed inventory tracking, a loyalty program, and built-in payment processing. Plus, it has built-in capabilities to handle consignment products. Visit Lightspeed for a 14-day free trial.

Visit Lightspeed

7. Advertise Your Consignment Shop

Before opening your consignment shop, you’ll need to start advertising and marketing your retail shop . Because you’re on a budget, make sure your strategy is effective by choosing a combination of online and offline marketing efforts.

  • Social Media
  • Search Engine Optimization (SEO)

In order for customers to find your business, you’ll want to have a website. Creating your own website from scratch can be easy with the right tools. There are many easy ways to make a business website for little or no cost. You need a registered domain and a web hosting service.

Showing Olive My Stuff, a consignment shop page.

Olive My Stuff, a consignment shop in Connecticut, has a professional website with information on shopping and consigning.

Create social media accounts on channels like Facebook, Instagram, and TikTok to promote your brand and consignment items. You can even sell your secondhand goods on Facebook as well as sell them on Instagram directly. Run paid social ads targeting people who fit your target market in your local area.

Focusing on your SEO strategy is an excellent way to put your consignment shop in front of people who may not have otherwise heard about you. Local SEO , in particular, can help you increase your visibility for local searches. This is an excellent marketing tactic because users searching for “consignment shop near me” are likely high intent.

  • Store Signage
  • Window Displays
  • Customer Loyalty Program

The storefront signage is the first impression shoppers will get from the in-person experience with your consignment shop. Make sure the sign is easily visible and easy to read, while also being reflective of your brand. You want to stand out enough to make passersby curious about what’s inside, especially if you plan to rely heavily on foot traffic. Check out these business sign ideas for inspiration.

While your signage might make the first impression, your window displays have the potential to make the biggest impact. A well-designed storefront with captivating window displays can lure even the most hesitant shoppers into your consignment store. Here are some resources to help you get started:

  • Create a Stunning Store Window Display
  • Visual Merchandising Techniques

Once your consignment shop is up and running, loyalty programs are a great way to encourage repeat customers and higher transaction amounts. Simple punch cards can be effective. However, using a loyalty program that’s tied in with your POS system offers deeper insights like who is using the program and how effective it is. Lightspeed  offers a sophisticated loyalty program that you can add onto Lightspeed POS for a monthly fee.

8. Hire & Train Employees

Last but certainly not least, before opening your store to the public you need to bring on a stellar group of employees to serve as the front lines of your business. If you haven’t hired an employee before, navigating the process can be intimidating. Follow a new hire checklist that outlines all of the gritty steps you need to take such as obtaining an employer identification number (EIN), registering for state and local taxes, and so on.

As a consignment store owner, it’s likely you won’t have a dedicated human resources (HR) team member. Using an affordable solution like Homebase can save you plenty of time and stress by simplifying hiring, employee scheduling, time tracking, and payroll.

Visit Homebase

Training Your Employees

You’ll want your consignment store staff ready to provide top-notch customer service from the moment you open your business. Providing great customer service is a skill that requires practice. If you don’t start training your employees before you open, they’ll be practicing their service skills on your customers.

Instead, hold a weeklong training boot camp before you open. In addition to running through customer service scenarios and role-playing, teach employees about store policies and procedures, the items you’re selling, and any other pertinent information.

9. Plan & Launch Your Grand Opening

Hosting a grand opening celebration is a great way to kick off your new business venture while also gaining some press coverage. To have maximum attendance, recruit friends and family, draft a press release for local media and surrounding businesses, make a Facebook event, notify your local Chamber of Commerce, and take an advertisement out in the local paper.

“One mistake a lot of companies make is staying under the radar until launch. If no one knows what you’re doing and when you’re opening, then you have zero chance of making any sales. Start building some excitement at least six weeks before your launch. Get active on social channels. Interact with likely customers and get the conversation started. Build anticipation with enticing photos, and maybe even incentivize purchases in those early days.” ― Deanna Thompson, Blogger, Closet Full of Cash

Showing an open sign board.

Plan a grand opening to celebrate the launch of your new business.

How to Start a Consignment Shop Frequently Asked Questions (FAQs)

Opening and running a consignment shop can be a tricky business.

What is a consignment shop?

A consignment shop is a store that sells secondhand items, typically clothing and accessories. Consignment stores purchase gently used goods and resell them at a markup to make a profit.

How does a consignment shop work?

As the owner of the consignment shop, you will purchase secondhand goods from customers, professional suppliers, flea market vendors, and so on, and own those items until they are resold in your store for a higher price.

How much does it cost to open a consignment store?

The exact price can vary a lot depending on your location and local real estate prices. However, opening a consignment store will cost roughly $10,000.

Why do consignment stores fail?

Part of learning how to start a consignment shop is figuring out what not to do. There are many reasons a consignment shop could fail. Common reasons include choosing the wrong storefront location, not having in-demand products, too-small profit margins, and insufficient marketing.

Bottom Line

Consignment shops are a great business idea for making money in 2022. More than 20,000 US-based used merchandise stores have a combined annual revenue of $17.6 billion , according to First Research. And these numbers continue to grow, especially as the world becomes more aware of the environmental challenges consumerism brings.

Starting a consignment shop is an excellent way to promote sustainable consumerism while also making a profit. And with the market growing the way it is, there’s plenty of opportunity for consignment shops of all kinds. There’s never been a better time to start a consignment business of your own.

About the Author

Meaghan Brophy

Find Meaghan On LinkedIn Twitter

Meaghan Brophy

Meaghan Brophy is a Retail Expert at Fit Small Business focusing on small business retail and ecommerce content. Meaghan’s 10+ years of retail experience includes working at local book and dance supply stores, handcrafting gifts at an eco-friendly manufacturer, developing private label brands, and managing a team of more than 40 sales and service professionals at a local spa.

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Knallerfalke – Reselling & eCommerce

Creating Reselling Business Plan: Step-by-step guide

Are you thinking of starting a reselling business ? Great idea! Not only is reselling a fantastic way to make some extra money, but it’s also a great way to get rid of unwanted items and make a bit of space in your home.

Before you get started, though, it’s important to create a reselling business plan. This will help you define your goals, choose the right products to sell, and set up systems to streamline your business.

You might be feeling overwhelmed at the thought of creating a business plan. Don’t worry! This step-by-step guide will help you create a reselling business plan that will set you up for success.

What is a Reselling Business Plan

A reselling business plan is a document that outlines the goals, strategies, and objectives of a reselling business. It is typically created by the business owner or a team of reselling experts. The purpose of a reselling business plan is to provide a roadmap for the business so that it can be successfully launched and operated.

creation of reselling business plan document

There are many different elements that should be included in a reselling business plan. Some of the most important elements include:

1) Executive Summary

An executive summary is a brief overview of the business, its goals, and its strategies. It should be no more than one or two pages long. The purpose of an executive summary is to provide a brief overview of the plans, objectives, and potential benefits, and to convince potential investors or lenders that the plan is worth investing in.

2) Company Description

This section provides more detail about the company, including its history, mission statement, and any unique selling points. It should include an overview of what your business does, as well as your company’s goals and objectives. It should also provide a brief history of your company, including any milestones you’ve achieved. Lastly, your company description should give a general idea of the products and services you offer.

3) Products and Services

This section outlines the reselling products and services that the company will offer. It should include information about the target market, pricing strategy, and product positioning.

4) Marketing Plan

A marketing plan is an important part of any reselling business plan. This section outlines the company’s marketing strategy, including its advertising and promotion plans. It should also include information about the sales channels that will be used to reach customers.

Here are some tips for making a successful marketing plan:

  • Research your target market. This is essential in order to understand what motivates them, what their needs and wants are, and how best to reach them.
  • Develop a unique selling proposition (USP). This is what sets you apart from the competition and will make customers want to buy from you instead of anyone else.
  • Create a marketing mix. Make sure to include the right mix of traditional and digital marketing tactics. Make sure you allocate enough budget to each so that you can execute effectively.
  • Measure and track your results. This will help you continually improve your marketing strategy. This data will help you make informed decisions about where to allocate your resources for the best return on investment.

5) Competitor Analysis

This involves studying your potential competitors to see what they are doing well, and where they may be vulnerable. Competitor analysis can help you to:

  • Find gaps in the market that you can exploit
  • Develop strategies to differentiate your products or services
  • Price your products or services competitively
  • Build a more robust marketing plan

6) Operational Plan

This section outlines the company’s operational procedures, including the manufacturing process, fulfillment process, customer service process, etc. In this section, you’ll need to include a few key points:

  • How you will acquire inventory – Will you buy from wholesalers, manufacturers, or other retailers?
  • How you will store your inventory – Do you have a warehouse or storage space set up?
  • How you will fulfill orders – Will you ship products yourself or use a fulfillment service?
  • How you will advertise and market your products – Which online platforms will you use to reach your target market?
  • What kind of customer service policies and procedures you will have in place – How will you handle returns and refunds?

6) Financial Plan

This section outlines the company’s financial projections, including revenue streams, expenses, and profitability. It should also include information about funding requirements and capitalization plans. At this point, consideration can also be given to whether a business account is needed. Separating private and business expenses can be helpful if loans are to be taken out at a later date.

7) SWOT Analysis

This will help you identify the Strengths, Weaknesses, Opportunities, and Threats associated with your business.

  • Strengths: What are the unique selling points of your business? What do you do better than anyone else?
  • Weaknesses: What are some potential areas of improvement for your business? Are there any areas where you are vulnerable?
  • Opportunities: What trends or changes in the market could you capitalize on? Are there any new customer segments you could target?
  • Threats: What could potentially harm your business? Are there any competitors that pose a threat?

reselling business plan swot analysis

Why you need a reselling business plan

The purpose of a reselling business plan is to articulate a clear and concise strategy for how the organization will go about acquiring and selling products or services in order to generate profit.  It is a great way to get feedback from potential investors, customers, and partners. It can also be a valuable tool for managing and growing your business.

Here are a few reasons why you should create a reselling business plan:

  • It will force you to think through all aspects of your business
  • It will help you identify your target market and understand your competition
  • It will help you set realistic goals and track your progress over time
  • It will give you a roadmap for success
  • It will make it easier to get funding from investors or lenders

Create Reselling Business Plan: Step-by-step guide

Without a reselling business plan, it’s easy to get off track or make decisions that are not in line with your overall goals. So take the time to create a comprehensive reselling business plan before you get started. So, now that you know the importance of a business plan, let’s take a look at how to create one.

Step one: Define your business model

As with any new business venture, it’s important to have a solid plan in place before you get started. When it comes to reselling, this means having a clear understanding of your business model and how you plan to make money.

There are a few different types of business models for resellers:

1. Wholesale model

In a wholesale model, you purchase products in bulk from suppliers and then sell those products to retailers or other businesses. It is a popular choice for businesses that want to be able to sell large quantities of products at a lower price point. This type of business model requires a strong relationship with suppliers, as well as the ability to move products quickly.

One of the advantages of the wholesale model is that businesses can enjoy economies of scale, which means they can produce products more cheaply than if they were selling smaller quantities. Another advantage is that businesses can reach a wider range of customers by selling through wholesalers. However, there are some disadvantages to the wholesale model as well, such as the fact that businesses have less control over their product and pricing.

2. Drop shipping model

A dropshipping model is a business model where you sell products that you don’t have in stock. When a customer orders a product from your store, you simply contact the supplier, who will then ship the product directly to the customer’s door. Dropshipping is a great way to start an online business with little up-front investment, and it can be very profitable. This is also applicable for reselling seasonal products .

There are a few things to keep in mind if you’re thinking of starting a dropshipping business:

  • You’ll need to find reliable suppliers who can provide good quality products at a reasonable price.
  • You’ll need to create good product descriptions and take great product photos to make your store look professional and trustworthy.
  • You’ll need to be prepared to handle customer service inquiries and returns, as you’ll be the one responsible for dealing with the customer directly.

Dropshipping can be a great way to start your own business with very little up-front investment.

3. Affiliate marketing model

In an affiliate marketing model, you promote other companies’ products online through affiliate programs. When customers purchase those products through your links, you earn a commission on the sale.

This model has several advantages for reselling businesses. Firstly, it enables businesses to reach a wider audience than they would be able to through their own marketing efforts. Secondly, it allows businesses to tap into the expertise of affiliates who are experienced in promoting and selling products or services. Finally, it provides an additional revenue stream for businesses.

There are also some disadvantages to affiliate marketing. For example, it can be difficult to build trust with customers if they feel that they are being sold to by an intermediary. Additionally, affiliate marketing can be risky if businesses don’t carefully select their affiliates and monitor their performance.

Take some time to figure out which model makes the most sense for you. No matter what approach you take, remember that a key part of successful reselling is providing value to your customers.

Step two: Identify your reselling niche

As you continue to craft your reselling business plan, it’s important to zero in on the type of products you’ll be focusing on. This is your “reselling niche.” By identifying your reselling niche , you’ll be able to market your business and attract customers who are interested in what you’re selling.

There are a few factors to consider when choosing your reselling niche:

  • W hat types of products are you passionate about?
  • What types of products are in high demand?
  • What types of products can you source easily and affordably?

Once you’ve considered these factors, you should have a good idea of the types of products you’ll be focusing on. From there, you can start to develop a marketing strategy and build out your business plan.

reselling business plan marketing strategy conceptualization

Step three: Determine your goals and objectives

The next step is to determine your goals and objectives. What do you want to achieve with your business? Do you want to make a full-time income? Do you want to supplement your current income? Do you want to create a passive income stream?

Once you know what you want to achieve, you can start setting some specific goals. How much money do you want to make in your first year? What kind of margins are you aiming for? How many products do you want to sell?

Creating specific, measurable goals will help you track your progress and keep yourself on track. Without a goal, it will be difficult to measure your success and determine if your business is profitable.

Step four: Outline your marketing and promotion strategy

As you develop your reselling business plan, be sure to include a detailed marketing and promotion strategy. This will be critical to your success in driving traffic to your store and generating sales.

There are a number of ways to market and promote your reselling business. Below are some ideas to get you started:

  • Develop a strong social media presence. Be sure to create accounts on all the major social media platforms and post regularly. Use attractive visuals and compelling content to draw attention to your store.
  • Engage in online advertising. Google AdWords and other online advertising platforms can be effective in driving traffic to your store.
  • Develop partnerships with other businesses. Forming partnerships with complementary businesses can help to increase exposure for your store. For example, if you sell vintage clothing, partnering with a local thrift store could be a great way to drive traffic to your store.
  • Participate in local events and markets. Attend local events and markets where you can set up a booth or table to sell your items. This is a great way to meet potential customers and generate interest in your store.

Step five: Develop a financial projection

The next step is to develop a financial projection for your reselling business. This will help you determine how much money you need to start your business, as well as estimate your potential profits.

There are a few things to keep in mind when creating your financial projection:

  • How much will it cost to produce your product or deliver your service? This includes the cost of materials, labor, and any other expenses associated with providing your product or service.
  • How much will you charge for your product or service? Be sure to consider the competition and what they are charging for similar products or services.
  • How many units do you expect to sell? This will depend on a number of factors, including your marketing efforts and the overall demand for your product or service.
  • What are your estimated operating expenses? This includes things like rent, utilities, insurance, and other general business expenses.
  • What are your estimated profits? This is the bottom line – how much money do you expect to make from your reselling business?

Once you have all of this information, you can start to put together a financial projection for your business. This will give you a good idea of how much money you need to get started and how profitable your business could be.

Step Six: Draft your reselling business plan

Now that you’ve done all of the research and planning, it’s time to put it all down in writing. Your business plan should include all the important elements mentioned in this guidebook.

Once you’ve got your business plan written out, it’s time to get started on making your dreams a reality. Start by taking some small steps and working towards your goals one at a time. Soon enough, you’ll have a thriving reselling business up and running!

reselling business plan draft creation

If you want to start a reselling business, congratulations! You’re about to embark on a rewarding and exciting journey. But before you get started, it’s important to create a reselling business plan.

Creating a reselling business plan is a great way to get your business started on the right foot. By taking the time to sit down and map out your goals, you can ensure that you are making the most of your opportunities and setting yourself up for success. While it may seem like a lot of work, a reselling business plan can be a helpful tool that will keep you organized and on track as you start your journey in the world of reselling.

This step-by-step guide will show you how to do just that, so you can hit the ground running and set your business up for success. Good luck!

resale business plan

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How to Start a $4.2M/Year Reselling Business

  • 8 months ago

Have you ever wondered how to become a reseller? Becoming a reseller with an online store can be a great way to start your own business or add another revenue stream to your existing business. 

Tia Hall started Sneak City in her parents’ garage in 2018 and has since opened two retail locations. Today, she and her business partner Anastasia Lemley make $4.2 million annually.  

They started reselling shoes they found at thrift stores for just $50. Now their business is one of the best shoe resellers worldwide.

Want to learn from Tia’s success? We have all the info you need:

What is a Reseller Business?

How to make money reselling, is a reseller a home-based business, how much do resellers make, step 1. what can i resell to make money, step 2. research your niche market, step 3. create a reseller business plan, step 4. find resale products, step 5. create your resale business model, step 6. implement your sales strategy, step 7. start marketing your reselling business, step 8. manage your inventory and sales, step 9. expand your reselling business, go resell with your own ecommerce business.

Keep reading to learn how to become a reseller business, or click any of the links above to jump to the section you need.

A reseller purchases products from a manufacturer or distributor and then sells them to customers for a profit through an online store or retail location. Tia explained how to begin a reseller business:

The easiest way to start a reselling business is to go to thrift stores and find items you can start selling online.

Check out our interview with Tia below.

You have to spend money to make more money. The trick is to find products that people are selling that you can buy and sell for more than your costs as the seller, which include the following tasks:

  • Buy the products 
  • Pay business expenses

For most industries, you’ll want to pay somewhere between 30-70% of what you can sell directly to your own customers. That’s what makes a reseller profitable.

Yes. Resellers can be home-based businesses, but it really depends on your living situation. Each local jurisdiction and homeowners association may have policies about whether you can start a business from home. Tia told us:

I started Sneak City out of my parents’ garage, but had to get my own shop after it started taking up too much space.

You might also want a shop if you have a large local customer base. Letting them pick up locally can improve the customer experience and reduce your business costs like gas and shipping.

Typical profit margins for reselling products or services vary widely depending on the industry and the products or services sold.

In general, resellers can expect to make anywhere from 10% to 50% profit margins on their sales. However, some industries may have higher profit margins, such as luxury goods or high-end technology products. Others have lower profit margins, such as basic household items or low-cost services.

Tia explained how much she makes to resell shoes:

We use the StockX price minus 30% to calculate the offer price when we buy items to resell.

That gives her a 30% gross profit margin in her reseller business. Keep reading to learn more about how to become a reseller business.

How to Become a Reseller Business

To become a reseller, you’ll need to:

  • Decide what resale items you’ll sell
  • Research your market
  • Create a business plan
  • Find products to buy and sell
  • Start your business
  • Create a sales strategy
  • Start marketing
  • Manage your inventory and sales
  • Expand your reselling business

Keep reading to learn the straightforward steps you’ll take to become a reseller.

The products and services you can resell are virtually endless. The key is finding and selling items or services with high demand and a good profit margin. With the right strategy and execution, anyone can become a successful reseller.

Here are some possible business ideas as a reseller:

  • Consumer Electronics
  • Resell Clothes and Accessories
  • Software and Digital Product Reselling
  • Car Accessories
  • Antique Furniture
  • Collectibles

Find out more about each product category and why a small business might want to resell items.

Electronics

One of the most common products that resellers sell is consumer electronics. This includes items like smartphones, laptops, tablets, and gaming consoles. These products are always in demand and have high profit margins, which makes them an attractive option for resellers.

Mike Wilson is an eBay seller who started a reseller business to fill his time in retirement. He told us:

The best products to resell are the ones that you know about. From sealed VHS tapes to electronics and clothes, use your life experiences to establish what it’s worth, and you’ll make a great living. Check out our interview with him below.

Clothing and Accessories

Another popular product category for resellers is clothing and accessories. This includes items like shoes, handbags, jewelry, and clothing. Resellers can purchase these items in bulk from manufacturers or wholesalers and sell them at a markup to customers.

Software and Digital Products

Software and digital products are also popular among e-commerce store resellers. This includes items like software licenses, e-books, and online courses. These products are excellent for resellers who want to start a reselling business with low startup costs.

You can either use affiliate programs, open source software, or whitelabel digital products to resell software. Check out our interview with Mat Diggity to learn his approaches.

Not into selling physical goods? Let’s have a look at some services you can resell.

Finally, services can also be resold. This includes things like web design, marketing, and consulting services. Resellers can partner with service providers and sell their services to customers at a markup. This can be a lucrative and profitable business model for those with expertise in a particular area.

The products and services that can be resold are virtually endless. The key is finding a product or service with high demand and a good profit margin. By building the right relationships with suppliers, you’ll be on your way to becoming a successful online reseller yourself. 

Now that you have an idea of how to find suppliers, let’s look at getting customers.

Before diving into the world of reselling, it’s crucial to understand your target market. Researching your target market will help you:

  • Identify potential customers
  • Create a buyer persona
  • Analyze your competition

This knowledge will guide you in selecting the right products to offer and crafting an effective marketing strategy. 

Identify Potential Customers

You can begin by identifying your niche. This involves determining the specific product categories or industries you want to focus on. By specializing in a particular niche, you’ll better understand your target customers and the products they’re searching for, making it easier to cater to their needs. 

Create A Buyer Persona

Creating buyer personas to represent your ideal customers is a smart way to keep your focus on your target audience. These personas should include demographics, interests, and buying habits. This information will help you tailor your marketing efforts and product selection to appeal to your ideal customer base. 

One of the aspects of the persona you really want to understand is what your customers can afford. Jim Sears makes $62K per month because he recognized that selling packs of sports cards in addition to individual and boxes of cards can be highly profitable as a reseller. He told us:

The younger generations are our target demographic, and they can’t afford boxes that sell for hundreds or thousands of dollars, but they can afford packs.

Hear more from Jim in the video below.

Research Your Competition

Finally, analyze your competition. You can research other resellers in your niche to understand their strengths and weaknesses. This will enable you to differentiate your offerings and identify growth opportunities to position yourself as a go-to source for your target market. 

Make sure to document everything you learn and share it with others to develop your niche expertise.

A reseller business plan should:

  • Include an executive summary 
  • Define the products or services
  • Identify your target market
  • Explain the pricing strategy and how you will make a profit
  • Include a marketing and sales strategy
  • Provide financial projections and a break-even analysis

Check out our blog about writing a business plan to learn more about these aspects.

To resell products you’ll have to find the product offerings at reasonable price points. Try these tips to get started:

  • Search for directories of suppliers online
  • Go to places you can purchase products
  • Vet suppliers
  • Get samples
  • Negotiate the terms of the agreement

Search for Supplier Directories Online

For those of you who want to sell your own products or other companies new products, you’ll want to research reliable wholesale suppliers or manufacturers to source products. Look for industry-specific directories or databases that list suppliers and manufacturers in your niche. You can also use search engines to find potential suppliers and manufacturers. 

Some of the popular ones are:

  • Reference USA : The website claims to have over 400 data points on the majority of businesses in the U.S including which wholesale supplier provides each of their products and when the last shipment was.
  • ThomasNet : Search a wholesale database by size of company, compliance standard, types of products, and annual sales.
  • Wholesale Centra l : Search their database or check out one of their tradeshows.
  • Worldwide Brands : This wholesale supplier directory only lists the highest level of wholesalers and dropshippers. Cut out middle men and get the lowest prices possible.

Go To Places That Sell Items

Another way to find resale items is to go to places where people sell products. Many resellers will go to places like:

  • Online Marketplaces
  • Trade Shows
  • Industry Events
  • Used Clothing Store
  • Social Media Sites
  • Other Retailers
  • Estate Sales

Tia told us: When we first started, most of our sneakers were found in thrift stores, but as we grew, people started coming to us.

If you’re buying from another business, you’ll need a resale license if you don’t want to pay sales tax. 

Vet Potential Suppliers

Once you have a list of potential suppliers or manufacturers, it’s important to vet them thoroughly. 

Be sure to read reviews and check their ratings on platforms like Google, Yelp, or the Better Business Bureau to ensure they have a good reputation. Then, check their credentials, such as licenses, certifications, and insurance. Ask for references and contact them to learn about their experiences working with the supplier or manufacturer. Check out this article on vetting suppliers .

Request Samples

Next, request samples of products to test their quality and ensure they meet your standards. If they don’t, keep looking. Get ready to negotiate if the manufacturer provides a good quality product. Learn more about ordering samples .

Negotiate with Suppliers

Finally, feel free to negotiate with your suppliers or manufacturers. Ask about their pricing, minimum order quantities, and shipping options. Define your expectations and requirements, then make sure you have a written agreement before purchasing products. Rocket Lawyers has free manufacturing contract templates .

With these tips, you can find reliable suppliers or manufacturers to help you become a successful reseller.

Before becoming a reseller, it’s important to understand the legal implications of this business model. You’ll need the following components in place:

  • Business Structure : LLCs and corporations are popular types of businesses for resellers.
  • Resale Permit : Most states have a resale permit (sometimes called a resale certificate). These allow you to buy products without paying tax. Learn more about each state’s resale permits.
  • Business License : May be required by state or local governments to operate legally. This permit business license allows you to purchase goods from wholesalers without paying sales tax, as you will collect it from your customers when you resell the products.
  • Business Account From Bank : Make sure to get a business bank account to keep your business finances separate.

We’re going to talk about sales taxes separately.

You’ll need to keep accurate records of your sales and purchases for tax purposes. As a reseller, you will collect sales tax and remit sales tax to the appropriate government agency. 

It’s important to familiarize yourself with your state and country’s tax laws to ensure you comply. If you reach the point that you have a national presence as an online business, you’ll have to comply with thousands of different tax requirements. Avalara is useful for sales taxes if your website doesn’t have tax handling options.

With the right strategy and execution, anyone can become a successful reseller. 

You’ll want to consider multiple ways of selling your resale products when you start a reselling business. Some of the most common ways of selling include:

  • Listing on Amazo n: Find out how to sell products on the world’s largest online marketplace by dropshipping products .
  • Niche Marketplaces : Selling on specialty platforms can be a great way to sell products fast. With StockX you can resell the product immediately if there is a bid you are willing to accept on the type of product you are selling.
  • Your Website : If you don’t get sales through a website, you’re leaving a lot of money on the table because a business grows by collecting data and increasing lifetime customer value. Learn how to create a website.
  • Social Media : You can develop a following and sell on social media. Learn to earn on TikTok .
  • Retail Store : Sell in your own retail store or provide wholesale orders to other retailers.

Marketing your reseller business involves:

Setting Prices

Creating a brand, networking , providing great customer service.

Get ready to learn how to market a reselling business.

Competitive pricing is one of the best marketing strategies for resellers to attract customers. Customers are always looking for the best deals, so make sure your prices are the same as your competitors. You can also offer discounts or promotions to entice customers to choose your products over others. 

Our dropshipping blog has an example of how pricing works.

Another effective strategy is to focus on building a strong brand image. This means creating a unique and memorable brand identity that resonates with your target audience. 

Use social media platforms to showcase your brand and engage with customers. You can also invest in professional branding services to help you create a cohesive and effective brand image.

Mike Andes told us:

The goal of branding is to bring your customer acquisition costs down as low as possible over the long term.

Learn more about branding.  

Networking is crucial for resellers. Attend industry events, trade shows, and conferences to connect with potential customers and other professionals in your field. This will help you build relationships and establish yourself as a trusted and knowledgeable reseller in your industry. Check out some networking groups for businesses .

Finally, customer service is key to attracting and retaining customers. Focus on providing outstanding customer service by responding quickly to inquiries and resolving issues promptly and efficiently. Positive reviews and word-of-mouth recommendations from satisfied customers can go a long way in attracting new customers to your small business.

Get some great customer service tips .

Choosing the best inventory management and sales software for resellers depends on various factors such as budget, business size, and specific features needed. Here are some top options: 

  • Amazon Seller Central
  • Zoho Inventory

Each of these services offers a range of features, such as inventory tracking, order management, and shipping management. These tools will help you provide all the necessary documentation to file your taxes. Resellers should evaluate each service based on their specific needs and budget before choosing the right one for their business. 

To expand your online resale business, consider some of these options.

  • Upsell customers. A reselling business can do this both in person and in your own ecommerce store.
  • Increase your marketing spending.
  • Start reselling additional products.
  • Create a customer loyalty program.
  • Partner with or buy other businesses.
  • Add a retail store.
  • Expand to other regions.
  • Open a reselling business e-commerce store if you don’t already have one.

Now to know how to become a reseller. 

You are sure to find plenty of amazing used products to resell at garage sales and the variety of other places we’ve named above. Never forget one person’s trash is another person’s treasure. 

What kind of items would you like to resell?

Brandon Boushy

Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.

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How to Start a Reseller Business: 7 Tips and Ideas for 2024

A reseller business can be a great option for first-time entrepreneurs. With this business model , you don’t need a revolutionary new product idea to start your own ecommerce business. In fact, you don’t even have to manufacture your own products, meaning it’s less of a hassle to get the business started. 

Interested? Then read on to learn the meaning of reseller, why you should become a reseller, and how to start a reselling business online.

resale business plan

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What is a reseller?

A reseller is a person or company that buys products from different suppliers and sells them to their own customers (usually at a profit). Resellers often provide some value-add in terms of the customer experience, which enables them to mark up the price of the items they sell. This could be something as simple as an in-depth product description, a customer loyalty program, or live chat support.

Sourcing products isn’t necessarily easy and often requires a large capital investment. Resellers are able to navigate this by purchasing products only after they’ve made a sale and have been paid by the customer. Think of reselling as a form of dropshipping , where individuals source materials and products from a variety of suppliers but do not commit to selling through any purchased inventory upfront.  

→ Click Here to Launch Your Online Business with Shopify

This business model is easier for the average person to start and can be highly profitable, especially if you have niche expertise. For example, someone who is highly knowledgeable about fashion could start a reselling business around the different clothes that are currently on trend.

What are the advantages of being a reseller?

reseller business

There are a number of benefits to starting an online resale business:

Launch your business sooner

Becoming a reseller allows you to start a business quickly. You don’t need to wait for inventory to arrive or wait for anything at all, for that matter. You can set up and launch the same day you build your online store. After you’ve added a few great reseller products and some content to your store, you can start marketing your business.

Carry no inventory

Another advantage of becoming a reseller is that you don’t have to carry inventory. You can source products from dropshipping suppliers, who allow you to resell without having to purchase inventory in advance. You only pay for goods as customers order them from your website, making it a great choice for new entrepreneurs. Even if you sell niche products or boutique clothing , you can still make a profit without holding stock.

Resell an extensive range 

If you become a reseller, you’ll be able to sell a vast range of products. If you resell clothes, you can offer shoes, jewelry, accessories, handbags, lingerie, or related products as your business grows. Adding other products to your reseller online shop won’t cost more, as you only pay for goods that customers buy from your store.

Lower your financial risk

A benefit to starting a reseller business is that the financial cost is low. This is the perfect business for budget-conscious and risk-averse entrepreneurs. You won’t need to buy bulk inventory. Shipping fees aren’t sky high in a reseller business. You only pay for goods as customers order them through your reseller online shop. Thus, the financial risk of doing business is low.

Set your own Margins

When you become a reseller, you’re free to set your own margins. You can choose to price your products however you want. Since the cost of goods is low, you can price your products to ensure your reseller business is profitable. The higher you set your price, the more you can make. Be sure to look at industry standards for product pricing.

How to become a reseller

  • Register your business. Get a business license where you do business and/or are incorporated. To resell in other states, you'll need to file a Foreign Qualification .
  • Check into state laws. In most states, you should be able to use an out-of-state reseller’s permit that eliminates the need to pay sales tax on resale items. However, this won't apply in every jurisdiction. Make sure to check the state laws on reselling before you open for business.
  • Get a resale permit. File one for each state where you purchase and sell items. Some fees may apply.

In the United States, a resale permit allows individuals to purchase certain items free of sales tax. However, you do have to collect the sales tax from customers and send it to the state. 

The sales tax laws vary by state, with each state levying its own sales tax rate. Some states also require resellers to collect local sales tax, which must be sent separately from the statewide sales tax. Check with your local jurisdiction to learn what taxes apply in your case.

4 reseller business ideas/opportunities 

reseller business ideas

In a reseller business, you can sell virtually anything . You can start a clothing store or resell shoes or even vintage products. The fact that you don’t have to invest in manufacturing and product development makes reselling a great home business idea to start and grow as you see fit. 

1. Clothing business

Clothing is a huge opportunity, as you can resell to women, men, and children of all ages. When running a reseller clothing business, you can test a few different clothing niches at a time and decide which ones work the best for you. You can remove low-performing styles without incurring any cost and add new items as they come into fashion. 

When setting up a reseller business idea like clothing, it is important to plan ahead, because clothing lines are cyclical depending on seasons and popular holidays.

2. Pet supplies store

Pet supplies offer a wide range of choices—from clothing to food to leashes and everything in between. Pet parents always need supplies, so there's ample opportunity to turn a profit by reselling.

Dog and cat parents are the most popular audience to target, but you can also resell products that appeal to owners of niche pets like rodents, pigs, or fish. Use social media to share your products and get customers to show off their purchases online in order to gain traction.

3. Cosmetics business

As a reseller business idea, selling cosmetics online can be a great way of making money, as shipping is relatively low and order volume is normally larger than the average. 

Cosmetics don’t just mean makeup, though. It can mean skin care creams and hair care products also. This means you can start a reseller business that caters to men and women of all ages in one store.

4. Car accessories business

Starting a reseller business for car accessories can be very profitable if you understand the market. People spend a lot of time in their cars nowadays and want to make them as comfortable as possible. 

Research what your customers want and source them from reputable resellers to ensure your reviews are always positive. Some product ideas are car seat storage bags, car seat back hooks, luminous car parking cards, radio receiver tuner with FM transmitter, and car Bluetooth speakerphone.

How to make money with a reseller online shop

You likely want to make money fast with your new reseller business. Fortunately, there are many strategies you can implement to ensure your reseller online shop grows and remains profitable.

Price your products well

While marketing your products is important, pricing your products well can help ensure that your business remains profitable. Some blogs recommend having a $2 profit to stay competitive. This is terrible advice. 

Your product price shouldn’t just cover the cost of goods. It also covers the cost of marketing, employees (when you start hiring), expenses such as Shopify fees, and more. As long as your product price makes sense for the market, you don’t need to underprice yourself.

Run social media ads

In general, Facebook ads tend to be the most popular choice for resellers. But TikTok and Instagram ads are also gaining traction due to their growing user base and commerce features.

You’ll need to experiment with different platforms to see where your brand resonates best with the audience. Perhaps TikTok could be your best-performing marketing channel, especially if you're good at making personalized short videos. Experiment, analyze, and double down!

Create content around your business

From video marketing to blogging, content creation can help elevate your brand’s presence. The more high-quality content you create, the more likely you are to drive traffic back to your store. By consistently creating content for your brand, you’ll find that, over time, your sales will grow. 

Need more marketing ideas? In our post How to Market a Product , you’ll find 24 different effective marketing tips that can help you drive more traffic to your store. Using the tips in the article, you’ll be more likely to land your first few sales in your reseller business.

Best app to find suppliers for your reseller business

DSers is a great tool for those interested in sourcing products to resell. While DSers is a dropshipping solution, the same principles apply to a reseller product dropship program. You’ll be able to resell goods from a manufacturer without carrying inventory and more. Here are a few other great reasons to consider DSers:

  • One-click product import : You can choose to add hundreds of items to your store with one simple click. You can sort through order volume, high reviews, and seller rating to find the right products for your reseller online shop.
  • One-click order processing : DSers’ reseller dropship app allows you to process orders in one click. Rather than manually typing in the customer’s address, you can click a button and all of the customer details will be sent directly to the corresponding supplier.
  • Choose from millions of products : As someone selling reseller products, variety allows you to find the best products to sell to your customers. You can choose from millions of great products to sell to your customers. By offering customers variety, you’ll be more likely to land a sale.
  • Suppliers ship products for you : In a reseller business, you won’t have to package or ship goods to customers. Your suppliers will do that for you. This saves you time and money from fewer labor costs. You’ll have more time to focus on marketing and growing your store’s sales.
  • Automatic price changes : When a supplier changes its price, you can have your store automatically update your product pricing. This allows you to maintain a profitable business or offer special discounts.
  • Track shipments : You can easily track your customers’ shipments in the DSers app. When customers ask questions about their package, you can give them specific information, as tracking information is easily accessible.
  • Easily find products with affordable shipping : With DSers, reseller businesses can sell products with affordable shipping costs. You can choose to sort items with free shipping or ePacket shipping . This allows you to send customers their products quickly and affordably.
  • You can earn more money : You’ll be able to set your own margins and keep your reseller business costs low. This type of business model gives you a better chance to earn more money than many competing brands. With low product pricing, you’ll be able to offer market pricing which still allows you to run a profitable business.

To use DSers, you’ll need to have a store on Shopify. Learn how to create a Shopify store in less than 30 minutes .

Start your reseller business today

Reselling is a low-risk way to dip your toes into launching and running an ecommerce business. Your website can be designed and styled any way you like, and you just need to add products without investing in inventory upfront. Promotions, sales, and product pricing will all be done by you. Follow the tips above to launch and grow your resale business today. 

How to start a reseller business FAQ

How do you become a reseller.

  • Get a business license.
  • Research state laws and regulations.
  • Prep all the necessary documentation.
  • File for a resale permit.

Is being a reseller profitable?

In general, resellers earn anywhere from 15% to 40% profit on the products they sell. However, your exact profit will be determined by several factors, such as your markup and overhead costs. 

Want to learn more?

  • How to Sell Online: Online Selling Ideas for 2024
  • Bootstrapping a Business: 10 Tips to Help You Succeed
  • 10-Step Formula to Achieve Financial Freedom in 2024
  • 12 Great Examples of Brand Guidelines (And Tips to Make Your Own)
  • How to Work Remotely: 9 Tips & Tools to Master Remote Life

Is there anything else you’d like to know more about and wish was included in this article? Let us know in the comments below!

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Thrift Store Business Plan Template

Written by Dave Lavinsky

thrift store business plan

Thrift Store Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and thrift store owners create business plans to start and grow their thrift stores. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a thrift store business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your thrift store as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a thrift store, or grow your existing thrift store, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your thrift store in order to improve your chances of success. Your thrift store business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Thrift Store

With regards to funding, the main sources of funding for a thrift store are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for thrift stores.

Finish Your Business Plan Today!

How to write a business plan for a thrift store.

If you want to start a thrift store or expand your current one, you need a business plan. Below are links to each section of your thrift store business plan template:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of thrift store you are operating and the status. For example, are you a startup, do you have a thrift store that you would like to grow, or are you operating thrift stores in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the thrift store industry. Discuss the type of thrift store you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of thrift store you are operating.

For example, you might operate one of the following types of thrift stores:

  • Vintage thrift store : this type of thrift store specializes in buying and selling retro-type clothes, shoes, etc. The items are usually aged over ten years.
  • Consignment thrift store: this type of thrift store buys and sells more expensive types of clothing, shoes, jewelry, etc. They are usually luxury items that can be resold if in good condition.
  • Goodwill thrift store: this type of thrift store will take donations of all monetary values. The store will also employ more disadvantaged workers and is a charitable benefit to the community.

In addition to explaining the type of thrift store you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, reaching X amount of customers served, etc.
  • Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the thrift store industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the thrift store industry educates you. It helps you understand the market in which you are operating. Secondly, market research can improve your strategy, particularly if your research identifies market trends.The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your thrift store business plan:

  • How big is the thrift store industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential market for your thrift store? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your thrift store business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, and the low income population. 

As you can imagine, the customer segment(s) you choose will have a great impact on the type of thrift store you operate. Clearly, families would respond to different marketing promotions than college students, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Thrift Store Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other thrift stores. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes large retail stores, estate sales, neighborhood garage sales, etc.

With regards to direct competition, you want to describe the other thrift stores with which you compete. Most likely, your direct competitors will be thrift stores located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  • What types of thrift stores do they operate?
  • What areas do they serve?
  • What types of customers do they serve?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide thrift store items that your competitors don’t offer?
  • Will you provide better employment opportunities?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a thrift store business plan, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of thrift store that you documented in your Company Analysis. Then, detail the specific services you will be offering. For example, in addition to thrift store services, will you provide skating instruction and training, an area for food and drink, private parties, and any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your thrift store. Document your location and mention how the location will impact your success. For example, is your thrift store located near a school, a busy neighborhood, or an urban setting, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your thrift store marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

  • Advertising in local papers and magazines
  • Commercials
  • Social media marketing
  • Local radio advertising
  • Word-of-mouth

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your thrift store, including cleaning and maintaining the thrift store, inventory of items, scheduling of staff, taking in new inventory, marketing, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to obtain your XXth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your thrift store to a new location.  

Management Team

To demonstrate your thrift store’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally you and/or your team members have direct experience in managing thrift stores. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a thrift store or have nonprofit and community relations experience.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you do a 20% markup on purchased intake of inventory or will you sell donations people drop off for a low cost ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your thrift store, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a thrift store:

  • Cost of thrift store construction and facility build-out
  • Cost of thrift store supplies
  • Cost of marketing the thrift store
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes and permits
  • Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your list of items your thrift store will offer, types of customers you will be targeting, and the areas your thrift store will serve.  

Putting together a business plan for your thrift store is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the thrift store industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful thrift store.  

Thrift Store Business Plan FAQs

What is the easiest way to complete my thrift store business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Thrift Store Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of thrift store you are operating and the status; for example, are you a startup, do you have a thrift store that you would like to grow, or are you operating a chain of thrift stores?

Don’t you wish there was a faster, easier way to finish your Thrift Store business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business planning advisors can create your business plan for you.

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RESALE BUSINESS

Related business ideas, discover your perfect domain, resale mini business plan, inventory acquisition & management:, marketing and customer acquisition:, sales and customer relations:, cost control:, business operations:, not what you had in mind here are more ideas, grab your business website name, step 1: determine if a resale business is right for you, breakdown of startup expenses, breakdown of ongoing expenses, examples of ways to make money, step 2: name the business, step 3: choose a business structure, step 4: obtain licenses and permits, obtain necessary licenses and permits, keep licenses and permits on file, consult with an attorney, step 5: open a business bank account, how to open a business bank account, maintaining the business bank account, step 6: create a business plan, writing the business plan, step 7: set up accounting system, types of accounting systems, choosing the right accounting system, setting up your accounting system, step 8: market your business, develop a brand, utilize online resources, develop a network, step 9: monitor your business, explore more categories, take the next steps.

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How to Start a Resale Shop Business

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Do you want to start a resale shop? If YES, here is a 22-step guide on how to start a profitable resale shop business with no money and no experience. A resale shop is one of the many business ideas within the retail industry that an aspiring entrepreneur can successfully start in in part of the world with little or no prior experience.

If you are interested in starting a resale shop in the United States of America or in any art of the world, you should be able to conduct your due diligence so as to know the type of goods to sell and how to get your supplies.

22 Steps to Starting a Resale Shop Business

1. understand the industry.

A resale shop is any shop that gets used goods for resale in their store. Resale shops can be categorized into three areas and they are consignment shops, buy-outright shops and thrift shops. A consignment shop accepts goods from customers, merchandises them for sale and pays a portion to the contributor. A buy-outright shop purchases used goods and marks them up to earn a profit. A thrift store is more likely to be run by a nonprofit organization or to support charitable causes.

The United States of America resale industry is estimated to be a multi-billion dollar industry. The industry rakes in an estimated revenue of 16 billion dollars annually and this amount includes the revenues that are generated from antique stores which is put at about 13 percent of the annual income of the industry.

Statistics has it that in the United States of America, the number of resale shops opening across the nation is on a steady growth of 7 percent and there are presently well over 25,000 registered consignment and resale stores in the whole of the United States of America.

In the United States and in most parts of the world, many businesses are forced to close shop because of the bad state of the economy, but resale shop business remains ever growing and perhaps more profitable are the years go by.

From the recent research published by a consumer research firm, the America’s Research Group, about 16 – 18 percent of Americans will shop at a thrift store during a given year and for consignment shops (resale shops), it’s about 12 – 15 percent. To keep these figures in perspective, consider that during the same time frame; 11.4 percent of Americans shop in factory outlet malls, 19.6 percent in apparel stores and 21.3 percent in major department stores.

Interesting Statistics About the Industry

The Resale Shops Industry is indeed a very large industry and pretty much active in all the parts of the world. Statistics has it that in the United States of America alone, there are about 8,960 registered and licensed resale stores, responsible for employing about 117,918 people and the industry rakes in about $10 billion annually.

Going forward, the industry is projected to grow at the rate of 3.2 percent annually. The companies with the lion share of the available market in this industry are Goodwill Industries International Inc., Savers and The Salvation Army.

It is a proven fact that the turnover of an average resale shop business can be as high as 50 percent and above that is why entrepreneurs who intend making good money from a business with little startup capital open their own resale shop; they either start by using a garage (garage sales), their cars/vans or rent a shop.

The resale industry is indeed flourishing because more and more consumers are becoming aware of the need to cut unnecessary spending. Besides the awareness of recycling is also a big boost for the industry.

Some of the factors that encourage aspiring entrepreneurs to open a resale shop is the fact that the amount needed to start the business, especially when you choose to start a mobile shop is not high compared to other small scale businesses. That makes it easier for people to come into the industry anytime they so desire.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition for a resale shop cuts across people of all ages and cultures, tribes and political affiliations, races and religions et al. The truth is that anybody who has the financial capacity is indeed a potential client of a resale shop business; from school children to corporate workers, from corporate organizations to individuals, from religious organizations to households et al.

Generally resale shopping attracts consumers from all economic levels. There is no distinctive resale shopper, just as there is no distinctive resale shop. The truth is that everybody irrespective of their financial status would usually look towards saving money and it could come from selling used items or purchasing used items.

Usually, people with low income take advantage of the opportunity resale offers to save money on apparel, furniture and other consumer items. The money you saved from either purchasing used items or selling your used items can be diverted to other areas. Here are a few of the demographic composition for resale shop business;

  • Corporate Executives
  • Business People
  • About to wed couples
  • Expectant Mothers

3. Decide What Niche to Concentrate On

It is important to state that resale shop business is under the retailing industry and this industry is very broad. The truth is that almost every commodity that is manufactured can be retailed. Having said that, if you are looking towards starting a resale shop business, aside from the types of goods you want to retail in your shop, you have the option of starting a;

  • Consignment shops
  • Thrift shops
  • Outright – buyout shops

The Level of Competition in the Industry

A resale shop business is easy to start, requires low startup capital, requires no technical skills and it is a profitable venture, hence there is a high level of competition in the industry. The truth is that despite the level of competition in the resale shop business, entrepreneurs who are running the business are still making their profits and some of them generate as high as 50 percent turnover especially those that are well positioned and have been able to secure loyal customers.

Creativity in the industry is obviously what led to online resale stores, clearance sales, and loads of other marketing strategies that is helping the business to grow despite the competition in the industry.

4. Know the Major Competitors in the Industry

Irrespective of the industry that you decide to pitch your business tent, it is the norm that there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands have been in the industry for a long time while others are best known for the quality of their products, how they conduct their businesses and the results they have achieved over the years.

These are some of the leading resale shops in the United States of America and in the globe;

  • HALO Thrift Shop
  • Buffalo Exchange
  • Crossroads Trading Co
  • Trunk Show Consignment
  • Michael’s Consignment
  • Beacon’s Closet
  • The Dressing Room
  • Second Time Around
  • Cadillac’s Castle
  • Annie Creamcheese
  • My Sister’s Closet
  • Flo’s on 7 th
  • Kimberley’s Consignment
  • NYC Opera Thrift Shop
  • Guvnor’s Vintage Thrift
  • Disney Character Warehouse
  • Cure Thrift Shop
  • Out of the Closet

Economic Analysis

Starting a resale shop business requires that you conduct your feasibility studies and market survey so as to get your economic analysis right. As a matter of fact, you just have to get your economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business.

When conducting economic analysis for your resale shop business, you would have to critically examine these key factors; place, product, pricing, and promotion. You would have to continue to review these factors while running your resale shop business.

Running a single resale shop outlet (an independent resale shop) is different from managing or operating a resale shop chain or franchise. Managing or operating a resale shop chain or franchise attracts additional impediments like incentive alliance, bureaucracies, growth strategy, and operational guidelines et al.

5. Decide Whether to Buy a Franchise or Start from Scratch

If your aim of starting a resale business is just to earn money and make a living without much stress, then you can afford to look for a successful resale chain and buy their franchise; but if your aim of starting a resale business is to build a business that will grow from just one shop outlet in one city to chains of resale shops in different cities all around the world and perhaps sell franchises, then starting from the scratch is your best bet.

Although starting a business from the very scratch might not be easy, but if you are diligent and you apply the right business strategies, it won’t be long before your business brand becomes recognized not only in your city or state, but throughout the United States of America.

6. Know the Possible Threats and Challenges You Will Face

The threats and challenges that are likely going to confront a startup resale business is the fact that they competing with already established resale shops. You would have to compete for the available market in the location you choose to set up your own resale shop.

Other threats and challenges that you are likely going to face when you start your resale shop business are economic downturn and unfavorable government policies. For instance, if you export second hand goods to other countries and the government of one of the countries you usually export goods to place a ban on such trade, it will definitely affect your business negatively.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

It depends on what you want and the type of business model that you intend building, you can either choose a limited liability company which is commonly called an LLC, or a sole proprietorship. Sole proprietorship should have been the ideal business structure for a resale business especially if you are just starting out from your garage or van. But if your intention is to open several outlets of your retail shops in the different cities and to sell franchise, then choosing sole proprietor is not an option.

Setting up an LLC protects you from personal liability. It is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

8. Choose a Catchy Business Name from the ideas Below

Usually, when it comes to choosing a name for your business, it is important that you choose a name that clearly indicates the type of business you are into, it will make it easier for people to identify with your brand name. However, there are no hard and fast rules when it comes to choosing a name for a resale business; you can afford to name your resale business anything as long as you have perfected your marketing strategy.

These are some catchy business names that you can choose from if you are looking towards starting your own resale shop business.

  • Friendly Pocket® Resale Shop
  • Orlando Community® Thrift Shop
  • Penny Wise® Consignment Shop
  • Ella George® Resale Shop and Franchise, Inc.
  • Mama Joy® Resale Shop
  • Glory Land™ Thrift Stores
  • Becky Aston® Consignment Shop
  • New Dawn® Resale Shop
  • Sparrow Wisper® Resale Shop

9. Discuss With an Agent to Know the Best Insurance Policies for You

When it comes to starting a resale or any retailing business for that matter, there are key insurance policies that you must have in place. You should note that you can’t be permitted to run a retailing business in the United States if you don’t have insurance cover for your business.

These are some of the basic insurance covers that you should consider purchasing if you want to start your own resale shop business in the United States of America and also in most parts of the world;

  • General insurance
  • Health insurance
  • Liability insurance
  • Workers compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Credit insurance
  • Payment protection insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are running a franchise model, it is compulsory that you file for intellectual property protection. It will come handy as your resale brand begins to expand. The truth is that even if you are starting your own resale shop business from the scratch, you would still need to secure your brand name from an intellectual property clearinghouse.

It is quite challenging to build your resale shop brand from the scratch, and then watch the brand name slip off your hands. Even if you intend buying a resale shop franchise, you would still need to contract the trademarks and servicemarks from the franchising company.

11. Get the Necessary Professional Certification

You do not have any need for professional certification before you can be allowed to legally operate your resale shop business in the United States of America. It is a business that is open to the skilled and the unskilled hence there is no need for a special professional certification.

Be that as it may, if you come across any certification, especially in the retailing industry, that will help you conduct your resale business in such a way that will position you to compete with leaders in the industry, then by all means acquire such certification.

12. Get the Necessary Legal Documents You Need to Operate

The legal documents required for running a resale business is perhaps the basic legal requirements needed to run any business in the United States of America. These are some of the legal documents needed before you can successfully start and run your own resale shop business;

  • Business and liability insurance
  • Tax Payer’s ID
  • Fire certificate
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Employee’s Handbook (optional)
  • Operating Agreement for LLCs
  • Building License
  • Franchise or Trademark License
  • Insurance Policy
  • Contract documents (for vendor’s / shipping partners)
  • Online Terms of Use (for online resale shop stores)
  • Online Privacy Policy Document (for online resale stores)

13. Do a Detailed Cost Analysis

When it comes to starting a resale shop business, loads of factors influences the amount that will be required to successfully launch the business. Factors like the location you intend starting the business, the type of goods you want to retail, the size of the resale shop you want to open, and of course the state of the economy.

Irrespective of where you intend starting your resale shop business, you would be required to fulfill most of the items listed below;

  • The Total Fee for Registering the Business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,300.
  • Marketing promotion expenses for the grand opening of your resale shop in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring Business / Franchise Consultant (if you intend selling franchise) – $2,500 (estimated figure)
  • Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for a shop for 12 month at $1.76 per square feet in the total amount of – $52,800.
  • The cost for shop remodeling – $5,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits – ($2,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $10,000
  • The cost for Start-up inventory – $10,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • Office equipment and furniture – $3,600
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
  • The cost of Launching a website – $600 (for online resale shop stores)
  • The cost for an opening party – $2,000 (optional)

If you want to start a medium scale resale shop business in the United States of America, you would need nothing less than ten thousand dollars ($10,000). And if your intention is to start a large scale resale shop business in the United States of America, then you should look towards generating over ten thousand dollars ($10,000).

14. Raise the Needed Startup Capital

It is often said that money is the lifeline of any business, and raising startup capital is perhaps one of the major concerns of entrepreneurs; it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from angel investors.

The first thing to put in place before sourcing for startup capital for your business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business.

The truth is that no bank can give you a loan if you don’t have a good and workable business plan. Besides, investors will not take you serious if you don’t have a business plan. There are several options when it comes to raising money to finance a startup business. Some of the options are;

  • Raising money from personal savings and sale of personal stocks
  • Raising money from investors and business partners
  • Applying for loan from bank
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Sourcing for soft loans from family members and friends.

15. Choose a Suitable Location for your Business

In starting a resale shop, it is very important to be strategic with the location and type of shop you get. It is important to note that your resale shop may likely not thrive in a highbrow area but would do well in the lower class suburbs of the city.

So you should locate your resale shop where the lower class of the society lives. Besides getting loads of people that might patronize you in this area, you would also get shops at a very cheaper rate. Before choosing a location for your resale shop business, ensure that you conduct a thorough feasibility studies and market survey.

The possibility of you coming across a resale shop that just closed shop in the location you want to open yours can’t be ruled out. This is why it is very important to gather as much facts and figures before choosing a location to set up your resale business. These are some of the factors that you should consider before choosing a location for your resale shop;

  • The demography of the location
  • The purchasing power of the residence of the location
  • Accessibility of the location
  • The numbers of resale shops in the location
  • The local laws and regulations in the community
  • Traffic, parking and security

16. Hire Employees for your Technical and Manpower Needs

There are no technical requirements for starting a resale shop business aside from the fact that you might want to acquire POS machines for those who might want to pay via their debit/credit cards. You might also want to buy a CRM software application to help you manage your customer base; to inform them when you have new consignment and to keep in touch with them.

As regard renting or leasing a shop, your financial capacity should influence your choice. If you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your resale shop; it usually gives you the freedom to design the facility the way you want. But if you are low on cash, then you don’t have any option other than to rent a facility or operate your resale shop from your garage or from your car/van.

Usually, an ideal resale shop would have the owner and one or more sales people. But if you intend operating a standard resale shop, then you should look towards hiring a store manager, purchasing manager, sales girls and sales boys and perhaps a driver. On the average, you would need about 5 employees to operate a standard resale shop in the United States of America.

The Service Delivery Process of the Business

Some resale shops operate on a walk-in basis. For example, they may choose to offer 30 percent cash of the current value of the goods you want them to sell or 50 percent store credit. When resale shops collect goods from clients, they are expected to remit the agreed amount when the goods are sold.

Usually, checks are sent out every month to their clients as agreed in the contract document. If you bring your used goods to a resale shop to help you sell, the owner of the resale shop (the buyer) will let you know what they plan on selling your items for, and you’ll sign a contract for three months with the option of a fourth.

You’ll get 50 percent of the selling price, but items less than $400 will get marked down 20 percent after a month, and items more than $400 will get marked down after two months. If you choose that fourth month, another 50 percent will come off the selling price.

17. Write a Marketing Plan Packed With ideas & Strategies

When it comes to generating a marketing strategy for your resale shop business, the first thing you need to do is to ensure that you choose a good location for your store. If your resale store is located in a good location, you would have successfully eliminated some challenges that you are likely going to be confronted with.

These are some of the marketing ideas and strategies that you can adopt for your retailing business;

  • Direct Marketing
  • Introduce your business to people and organization in the community where your store is located
  • List your business in local directories/yellow pages
  • Sponsor TV and Radio Programs
  • Erect your Billboards in Strategic locations around the city
  • Making use of sales Agents and sales reps
  • Online Marketing (via your official website, social media platforms and blog et al)
  • Referral Marketing/word of mouth
  • Public relations during exhibitions and corporate events

18. Work Out a Reasonable Pricing for your Services & Products

One of the major factors that will help you get the right product pricing for your resale business is your bargaining power. The truth is that if you are good with bargaining, you will be able to get second hand goods at good prices, and then resale at prices that will guarantee you profits.

This is the reason why the average resale shop owner makes over 50 percent turnover rate. Another factor that can aid you to get the right pricing for your goods is to employ only key employees and outsource some roles that are not essential. With that, you will be able to cut cost of running the business.

19. Develop Iron-clad Competitive Strategies to Help You Win

When it comes to competing favorably in the resale shop industry, you would have to explore ways of getting neatly used items at giveaway prices. One thing is certain, if you operate the biggest resale shop in your location and you deal in various secondhand items ranging from apparels to home appliance, to office equipment to electronics et al, you likely going to attract more customers than your competitions.

The idea is to rent a bigger shop and then run a one – stop resale shop; a shop where it is difficult for any customer to visit without getting the goods they want to buy. That is perhaps one of the key competitive strategies to adopt in this type of business.

20. Brainstorm Possible Ways to Retain Clients & Customers

One of the strategies that you would use to generate repeated sales from your customers is to ensure that the you sell neatly used second hand items at affordable prices and also ensure you adopt a win – win approach when it comes to purchasing used items from your customers.

You should also ensure that your customer service deliveries are always on point. The truth is that if your customers find it difficult to get quality used goods from your shop, you are likely going to struggle to get them to come back; people usually go to places where they are sure of getting value for their money.

You can also make uses of promotional ideas such as loyalty schemes, direct marketing, door drops, and merchandising. Lastly, ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them, and also attract new customers.

21. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Resale business just like any other business in the retailing industry requires steady promotion to get people to buy into the brand. In promoting your brand and corporate identity, you should leverage on both print and electronic media. Know that it is cost effective to use social media platforms to promote your brand, and it is quite effective.

Here are the platforms you can leverage on to create brand awareness of your resale shop and to promote your corporate identity in the market place;

  • Place adverts on national TV stations, Radio Stations and Newspapers / Magazines
  • Run your own special TV program
  • Sponsor relevant community programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, YouTube, Twitter et al
  • Install your billboards in strategic locations
  • Engage in roadshows from time to time
  • Distribute your fliers and handbills in targeted areas from time to time
  • Send out introductory letters to households in and around your location
  • Encourage the use of word of mouth especially from loyal customers
  • Ensure that all your vehicles are branded with your company’s logo
  • Ensure that all your employees wear your branded shirts during work hours

22. Create a Suppliers/Distribution Network

One of the first business strategies that you should put in place here is how to constantly get stocks of the items that you retail.

You can easily come across people who want to sell their used items, and you can as well place adverts on advertising platforms to inform people that you buy second hand items. In recent time, the internet has become the busiest place where people sell and buy second hand items, so you should make plans to leverage on the internet when it comes to stocking your shop.

Even if you run a brick and mortar kind of resale store, you can still go ahead to have an online resale store. It won’t cost you much to set up an online store except for the logistics of shipping et al. Besides if you have an online resale store, your target market won’t just be restricted to the location of your store.

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Thrift Store Business Plan Template

Written by Dave Lavinsky

Thrift Store Business Plan

You’ve come to the right place to create your Thrift Store business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Thrift Stores.

Below is a template to help you create each section of your Thrift Store business plan.

Executive Summary

Business overview.

Thrifty Treasures is a startup thrift store company located in Buford, Georgia. The company was founded by Georgia Mae Dutton, a thrift store maven with over forty years experience as both a shopper and customer advisor inside thrift stores. After many years of observing the best model for a thrift store; including customer assistance, operations, pricing, stocking inventory, and other practical knowledge, Georgia Mae decided to open her own thrift store to put all those pieces of practical knowledge to work.

Thrifty Treasures will focus on select areas of the best-selling categories for thrift stores: apparel, accessories, furniture, seasonal items, toys, household goods, kitchen items, and heritage favorites (crystal, silver, linen, cutwork, etc). Her plan is to provide everything needed to build the interior of a home while doing so on a dime. Thrifty Treasures will become the one-stop shop for gently-used items and apparel to suit every buyer, from the youngest shopper to the seniors.

Product Offering

The following are the products and services that Thrifty Treasures will provide:

  • Gently-used apparel, accessories, furniture, seasonal items, toys, household goods, kitchen items, and heritage favorites
  • Rotating inventory items every 30 days
  • Clean bicycles and riding toys in good working order
  • Respectful and courteous service for every customer
  • Leadership training for staff members
  • Generous 30-day return policy

Customer Focus

Thrifty Treasures will focus on the residents of Buford, Georgia and those within the surrounding region. They will target owners of gently-used items who want to donate items to be used for families within the community. They will target community organizations who will benefit from acquiring items from Thrifty Treasures for offices, meeting areas, and community kitchens. They will target local store owners who want to give away or sell for greatly reduced prices certain inventory items they hold.

Management Team

Thrifty Treasures will be owned and operated by Georgia Mae Dutton. She has recruited her former shopping assistant, Beula Simpson, to be the office manager and part-time salesperson. Georgia Mae has also recruited the maintenance worker from her church, Johnny Clarkson, to assist in cleaning and maintaining order in the store on a part-time basis.

Georgia Mae Dutton has been a thrift shopper for over forty years, beginning when she was eleven years old. She has observed and witnessed over the years the patterns, inventory, and customer service processes that work best, along with those that don’t. She is a graduate of Buford Community College, where she earned a business certificate.

Beula Simpson has been a shopping assistant for ten years for Georgia Mae, helping in the selection of items and disbursal of those items to friends and family members in need. She has been trained by Georgia Mae to select the best inventory items and to offer these items at reasonable prices.

Johnny Clarkson is a part-time maintenance worker at a local church that sits on a multi-acre property. He oversees one helper, who assists with cleaning, organizing, and maintaining the interior rooms of the church, as well as the outer grounds and landscaping of the areas around the church. Johnny has been employed at this job for over five years and has built an excellent reputation as a person “you can trust.”

Success Factors

Thrifty Treasures will be able to achieve success by offering the following competitive advantages:

  • Friendly, knowledgeable, and highly-qualified team at Thrifty Treasures
  • A wide array of products that will appeal to all buyers, from household items to heritage favorites. There will be something for everyone to appreciate and purchase.
  • Thrifty Treasures will offer discounts on gently-used items, increasing discounts throughout the one-month inventory period, until 75% discounts are applied during the last week of each month.
  • Inventory is sold and restocked every thirty days; merchandise is never “old and tired.”
  • Thrifty Treasures offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.

Financial Highlights

Thrifty Treasures is seeking $200,000 in debt financing to launch Thrifty Treasures. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

  • Office space build-out: $20,000
  • Office equipment, supplies, and materials: $10,000
  • Three months of overhead expenses (payroll, rent, utilities): $150,000
  • Marketing costs: $10,000
  • Working capital: $10,000

The following graph outlines the financial projections for Thrifty Treasures.

Thrifty Treasures Pro Forma Projections

Company Overview

Who is thrifty treasures.

Thrifty Treasures is a newly established full-service thrift store in Buford, Georgia. Thrifty Treasures will be the most reliable, cost-effective, and enjoyable store for customers of all ages in Buford and the surrounding communities. Thrifty Treasures will provide a comprehensive inventory of items that will solve the issues or concerns of their customers, as each finds what it needed at reasonable and practical prices. Their full-service approach includes comprehensive training extended to each employee upon hire. This ensures fully-trained staff members who want to give their personal best efforts to each customer.

  Thrifty Treasures will be able to effectively purchase, stock and sell inventory every thirty days. The team of professionals are highly qualified and experienced in thrift store buying and selling. Thrifty Treasures removes the concerns of customers who need items or apparel and can’t afford those items at a full-price store. Thrifty Treasures also ensures all issues are taken care of expeditiously while delivering the best customer service.

Thrifty Treasures History

Since incorporation, Thrifty Treasures has achieved the following milestones:

  • Registered Thrifty Treasures, LLC to transact business in the state of Georgia.
  • Has a contract in place at one of the suburban retail strip malls to lease sales space and an office space, totalling 15,000 square feet.
  • Reached out to numerous friends and associates to include Thrifty Treasures as a primary store of choice.
  • Began recruiting a staff of three sales representatives and office personnel to work at Thrifty Treasures.

Thrifty Treasures Products and Services

The following will be the products and services Thrifty Treasures will provide:

Industry Analysis

The retail thrift store industry is expected to grow over the next five years to over $64 billion. The growth will be driven by consumers who will shop for lower-priced items as a result of inflation. The growth will also be driven by consumers who want to reuse items as sustainable responsibility is a personal goal. The growth will also be driven by younger consumers who seek certain memorabilia from past decades, fashions from former decades, or those who enjoy items that never seem to wear out. Costs will likely decrease as more and more consumers want to share gently-used items with others who are less fortunate. This will result in more availability and lower costs for thrift store owners.

Customer Analysis

Demographic profile of target market, customer segmentation.

Thrifty Treasures will primarily target the following customer profiles:

  • Residents of Buford and surrounding areas
  • Businesses that need to acquire furnishings or household items
  • Local store owners who may want to buy or sell items
  • Community organizations who may want to buy or sell items

Competitive Analysis

Direct and indirect competitors.

Thrifty Treasures will face competition from other companies with similar business profiles. A description of each competitor company is below.

Traci’s Thrift Taxi

Traci’s Thrift Taxi is a mobile store featuring used women’s apparel. The owner, Traci Fordham, purchases “used and returned” women’s apparel in bulk from wholesale companies and sells the items via her mobile store. Traci did not want to incur the expense related to a retail store; therefore, she moves her mobile store to various neighborhoods where her customers congregate to visit and purchase her inventory on wheels. She holds an inventory of up to 200 clothing items for women at one time and uses her oversized van as her mobile showroom, where she can invite up to five women at a time to enter her “store” to shop for used appeal.

By using her van as her store, Traci saves on the expenses related to a brick and mortar store, however she pays for fuel and maintenance on her van, which dilutes her economy somewhat. Traci uses a software program that details where the van will be located and sends a text message to any woman customer to alert customers when the van is in their geographic area. Traci cleans out her inventory every 60 days, or whenever she sells out of inventory.

Annie’s Simple Memories

Annie Swanson has been a collector of dolls for over forty years. During that time, she’s amassed an enviable 400 dolls, many of them complete with clothing and accessories. Annie decided to open a shop to highlight her dolls, selling them as customers preview them, along with other memorabilia related to dolls and the toys girls and boys have loved throughout the years.

Annie’s Simple Memories is focused on the Atlanta, Georgia area, where her shop is located on the outskirts of the city in a suburban mall. Her specialty of dolls and toys defines her customer base. She introduces her shop to local schools and offers various discounts and special promotions to the schools in order to successfully highlight her store in the region.

The consumer target market for memorabilia has continued to grow over the past few decades and, as consumers have more expendable income in this and projected years ahead, they will continue to acquire dolls and toys that represent special memories of the past.

Shifty’s Thrifty Auto Parts

Although not a direct competitor to Thrifty Treasures, Shifty’s Thrifty Auto Parts can be considered an indirect competitor, as the inventory for sale is used. The available inventory contains workable, used auto parts from automobiles of several decades. For the car aficionado, Shifty’s Thrifty Auto Parts is a dream come true, with auto parts from a wild array of cars from all over the world.

Shifty’s Thrifty Auto Parts has been in business since 2005 and has expanded from a small 500 square foot corner hub to a 3,000 square foot store. Customers purchase via in-store selections; however, Shifty’s Thrifty Auto Parts has built a considerably larger online presence during the past ten years, as much of the available inventory is highlighted on the website with the ability to purchase and receive parts in their own home. This part of the business has garnered multiple new customers and boosted the walk-in customer base of the initial years of business.

Competitive Advantage

Thrifty Treasures will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

Thrifty Treasures will offer the unique value proposition to its clientele:

  • Highly-qualified team of skilled employees who are able to provide stellar customer service as they assist customers with purchases, returns, and questions that may arise.
  • Steady rate of inventory turnover every 30 days that ensures fresh stock of apparel and other items from which to choose.
  • Movable discount rates that offer customers an opportunity to save even more on inventory items.
  • Inventory that holds value for everyone in the community.

Promotions Strategy

The promotions strategy for Thrifty Treasures is as follows:

Word of Mouth/Referrals

Thrifty Treasures has built up an extensive list of friends and associates over the years by providing expert advice to other shoppers for thrift items. Thrifty Treasures will be the culmination of years of knowledge-put-into-practice, as everyone helps by spreading the word of Thrifty Treasures.

Professional Associations and Networking

Thrifty Treasures will network extensively among community groups and clubs that may require furnishings or some types of inventory that can be purchased at lower-priced rates. Special discounts will be offered to these groups during the first three months of business.

Print Advertising

All residents of the Buford and surrounding communities will receive a direct mail piece, offering a discount for visitors to the store who make a purchase during the first three months of business.

Website/SEO Marketing

Thrifty Treasures will fully utilize their website, sharing photos and video reels of current and new stock items for sale. The website will be well organized, informative, and list all inventory categories that Thrifty Treasures provides. The website will also list their contact information and list their open hours. The website presence will be enhanced with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “thrift company” or “thrift store near me”, Thrifty Treasures will be listed at the top of the search results.

The pricing of Thrifty Treasures will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for Thrifty Treasures. Operation Functions:

  • Georgia Mae Dutton will be the Owner and President of the company. She will oversee all staff and manage client relations. She has spent the past year recruiting the following staff:
  • Beula Simpson will be the Office Manager who will handle the office administration, inventory management, and accounts payable.
  • Johnny Clarkson will be the Maintenance Manager at the store, overseeing the placement and care of the inventory, as well as the cleanliness and maintenance of the store.

Milestones:

Thrifty Treasures will have the following milestones completed in the next six months.

  • 5/1/202X – Finalize contract to lease store and office space
  • 5/15/202X – Finalize personnel and staff employment contracts for the Thrifty Treasures
  • 6/1/202X – Finalize contracts with wholesale companies for Thrifty Treasures inventory
  • 6/15/202X – Begin networking at community events
  • 6/22/202X – Begin moving into Thrifty Treasures store and office
  • 7/1/202X – Thrifty Treasures opens its store for business

Beula Simpson has been a shopping assistant for ten years for Georgia Mae, helping in the selection of items and disbursal of those items to friends and family members in need. She has been trained by Georgia Mae to select the best inventory items and to purchase these items at reasonable prices.

Financial Plan

Key revenue & costs.

The revenue drivers for Thrifty Treasures are the fees they will charge to customers for their product purchases.

The cost drivers will be the overhead costs required in order to staff Thrifty Treasures. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

Thrifty Treasures is seeking $200,000 in debt financing to launch its retail store. The funding will be dedicated toward securing the store and office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

  • Number of Customers Per Month: 150
  • Average Revenue per Month: $36,000
  • Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, thrift store business plan faqs, what is a thrift store business plan.

A thrift store business plan is a plan to start and/or grow your thrift store business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Thrift Store business plan using our Thrift Store Business Plan Template here .

What are the Main Types of Thrift Store Businesses? 

There are a number of different kinds of thrift store businesses , some examples include: Vintage thrift store, Consignment thrift store, and Goodwill thrift store.

How Do You Get Funding for Your Thrift Store Business Plan?

Thrift Store businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Thrift Store Business?

Starting a thrift store business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Thrift Store Business Plan - The first step in starting a business is to create a detailed thrift store business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your thrift store business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your thrift store business is in compliance with local laws.

3. Register Your Thrift Store Business - Once you have chosen a legal structure, the next step is to register your thrift store business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your thrift store business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Thrift Store Equipment & Supplies - In order to start your thrift store business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your thrift store business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful thrift store business:

  • How to Start a Thrift Store

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Consignment Shop

Back to All Business Ideas

How to Start a Consignment Shop

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on May 31, 2022 Updated on February 14, 2024

How to Start a Consignment Shop

Investment range

$2,550 - $13,100

Revenue potential

$156,000 - $468,000 p.a.

Time to build

0 – 3 months

Profit potential

$62,000 - $187,000 p.a.

Industry trend

It may be hard to believe, but second-hand clothing is one of the world’s fastest-growing industries. The market is expanding a stunning 25% each year, which means right now is a great time to start your own consignment shop and ride this train to success. 

But before you hang your “OPEN” sign, you’ll need to learn how to launch and run a business. Luckily, this step-by-step guide has you covered with all the information you’ll need to open your new consignment shop. 

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

In a nutshell, consignment shops get paid for selling other people’s stuff. People bring in unwanted shoes and clothing, antiques and household goods, and the shop sells them for an agreed-upon price and takes a commission, usually about 50%.

Still, starting a consignment shop has pros and cons to consider before deciding if it’s right for you.

  • Business Model Options – Choose a physical or online consignment shop
  • Good Margins – Pay nothing for inventory until it sells; get half the sale price
  • Hot Market – Demand for vintage and second-hand clothing is rising
  • Delayed Opening – Build up inventory before the store opens
  • Crowded Market – A hot market means lots of competition

Consignment industry trends

Industry size and growth.

  • Industry size and past growth – The global second-hand clothing industry is worth $119 billion, up 24% from 2021.(( https://www.thredup.com/resale/#size-and-impact ))
  • Growth forecast – The global second-hand clothing industry is projected to nearly double by 2026 to reach $218 billion. 

consignment industry size and growth

Trends and challenges

Trends in the consignment shop industry include:

  • Online clothing resale is the fastest-growing market segment, expected to quadruple by 2026.
  • In 2021, 244 million US consumers said they were open to buying second-hand clothing.

Challenges in the consignment shop industry include:

  • A growing number of players in the online consignment store market are creating greater competition.
  • Generally only brand name clothing is sold in consignment shops, which means shop owners have to watch out for knock-offs. 

consignment shop Trends and Challenges

How much does it cost to start a consignment shop business?

Starting an online consignment shop will cost about $2,500. Your costs will be for a website and marketing costs. Starting a brick-and-mortar consignment shop will cost about $13,000.

How much can you earn from a consignment shop business?

Prices for consignment items will vary. Since you’ll be looking for high-end items to sell, these calculations will assume an average item price of $300, of which you’ll get 50%. If you’re running an online consignment store, your profit margin after marketing costs and paying the consignor will be about 40%. 

In your first year or two, you could sell 10 items a week, bringing in $156,000 in annual revenue. This would mean $62,000 in profit, assuming that 40% margin. As your website gets more traffic, sales could climb to 30 items a week. With annual revenue of $468,000, you’d make an outstanding profit of $187,000.

consignment shop earnings forecast

What barriers to entry are there?

The only barrier to entry for a consignment shop is the competition you’ll face.

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Step 2: hone your idea.

Now that you know what’s involved in starting a consignment shop, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research consignment shops in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a consignment store that sells furniture and household items.

resale business plan

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as luxury brands or high-end accessories.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products

You’ll need to determine if you want to specialize in clothing or some other type of merchandise. In addition to consignment items, you could also operate in part as a thrift store or online thrift store and sell donated items or items you find at garage sales. You could also have a retail store in your shop where you sell items that you’ve purchased wholesale. 

How much should you charge for consignment items?

Prices will vary based on the item and its retail price. For an online store, after the cost of paying consignors and marketing, you should aim for a profit margin of about 40%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be broad, so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook. 

Where? Choose your consignment shop location

Choosing the right location for your consignment shop is crucial for attracting customers and ensuring its success. Look for a spot in a high-traffic area with good visibility, such as a popular shopping district or a busy downtown area.

Consider accessibility and convenience, ensuring that the location is easily reachable by public transportation and has ample parking. Additionally, assess the local demographics and aim to select a location that caters to a wide range of customers. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed

consignment shop idea rating

Step 3: Brainstorm a Consignment Shop Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “consignment shop”, boosts SEO
  • Name should allow for expansion, for ex: “Renewed Treasures” over “Sports Gear Consignment Shop”
  • Avoid location-based names that might hinder future expansion

Discover over 260 unique consignment shop name ideas here . If you want your business name to include specific keywords, you can also use our consignment shop business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Consignment Shop Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: A brief overview of your consignment shop business, highlighting key points such as the business concept, goals, and potential for success.
  • Business Overview: Detailed information about your consignment shop, including its mission, vision, location, legal structure, and any notable achievements or milestones.
  • Product and Services: Description of the items your consignment shop will accept and sell, emphasizing the quality, uniqueness, and appeal of the products.
  • Market Analysis: Examination of the target market for your consignment shop, including demographics, trends, and potential growth opportunities.
  • Competitive Analysis: Evaluation of other consignment shops or similar businesses in the area, identifying strengths and weaknesses to position your shop effectively.
  • Sales and Marketing: Strategies for promoting your consignment shop, attracting customers, and driving sales, encompassing both online and offline channels.
  • Management Team: Introduction of key individuals involved in running the consignment shop, highlighting their expertise and roles.
  • Operations Plan: Details on the day-to-day operations of your consignment shop, covering aspects such as inventory management, staffing, and customer service.
  • Financial Plan: Projections and analyses of the financial aspects of your consignment shop, including startup costs, revenue forecasts, and break-even analysis.
  • Appendix: Additional supporting documents, such as resumes of key team members, detailed market research data, and any other supplementary information relevant to the business plan.

what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to consignment shops. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your consignment shop will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

resale business plan

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

resale business plan

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a consignment shop business. You might also try crowdfunding if you have an innovative concept. 

types of business financing

Step 8: Apply for Consignment Shop Business Licenses and Permits

Starting a consignment shop business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your consignment shop business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

types of business insurance

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as ConsignPro , resaleworld , or SimpleConsign , to manage your inventory, billing, and payments. 

  • Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

For your consignment shop, the strategy should focus on highlighting the unique, ever-changing selection of items you offer, the affordability and sustainability of shopping second-hand, and the personalized shopping experience. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

  • Professional Branding : Your branding should reflect the eclectic, unique nature of your shop, conveying a sense of discovery and sustainability. This could be reflected in everything from your logo and storefront to your online presence.
  • Direct Outreach : Connect with local communities, fashion bloggers, and sustainability advocates to increase awareness about your shop.

Digital Presence and Online Marketing

  • Professional Website and SEO : Create an engaging website showcasing your latest finds, store events, and customer testimonials. Implement SEO best practices to optimize your site for local consignment, thrift shopping, and sustainable fashion searches.
  • Social Media Engagement : Use platforms like Instagram, Facebook, and Pinterest to regularly post about new arrivals, fashion inspiration, and sustainable shopping tips.

Content Marketing and Engagement

  • Fashion and Sustainability Blog : Share blog posts about fashion trends, upcycling tips, and the benefits of consignment shopping.
  • Customer Features and Success Stories : Highlight satisfied customers, especially those who found unique items or put together stylish outfits from your shop.
  • Style Guides and Lookbooks : Create seasonal lookbooks or style guides using items from your shop to inspire customers.

Experiential and In-Person Engagements

  • In-Store Events : Host themed shopping events, styling workshops, or local artist pop-ups to draw people into your store.
  • Participation in Community Events : Engage in local street fairs, fashion shows, or community markets to increase visibility and reach a wider audience.

Collaborations and Community

  • Partnerships with Local Designers and Artisans : Feature local designers or artisans in your shop, providing a platform for local talent and unique products for your customers.
  • Community Involvement : Participate in or sponsor local environmental and community events to align your shop with sustainability and community values.

Customer Relationship and Loyalty Programs

  • Loyalty Rewards : Implement a loyalty program that offers discounts or special privileges to repeat customers.
  • Consignment Incentives : Encourage more consignments by offering incentives or better terms to frequent consignors.

Promotions and Advertising

  • Targeted Local Advertising : Use local newspapers, community bulletin boards, and online platforms to reach potential customers in your area.
  • Email Marketing : Keep your customers engaged with regular newsletters featuring new inventory, fashion tips, and upcoming events.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your consignment shop meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your consignment shop business could be:

  • Luxury brands at non-luxury prices 
  • Top quality consignment and thrift items shipped fast!
  • Sell your unwanted collectibles and make good money

unique selling proposition

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a consignment shop business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in consignment shops for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in consignment shops. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a consignment shop business include:

  • Shop Clerks – make sales, customer service
  • General Manager – inventory management, accounting
  • Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Consignment Shop – Start Making Money!

The consignment market is heating up, with resale clothing and accessories experiencing boom times. Now is the perfect time to open your own consignment shop. If you have a great eye for fashion and a desire to provide customers with great products, you could build a lucrative consignment operation.

You’re done your business homework now, so it’s time to get the word out and launch your successful consignment shop. 

  • Consignment Shop Business FAQs

Yes, consignment can be a very profitable business. The market for resale clothing is growing rapidly, so demand for the items you sell should be high.

Consignment shops get a percentage of the sale price of the consigned items. The fee ranges from 40% to 60% for clothing and accessory sales. Fees can be higher for items like furniture.

The main risks are the items being damaged or stolen. Then you could be liable to the owners of the items.

You’ll need to train them on how to value consignment items. Then you’ll need to monitor the transactions they make to ensure that the prices are accurate.

You’ll need to create a strategic plan for how to market your shop, and how you’ll handle the business as your sales increase. 

The bottom line is most important. You need to be able to make enough profit to make a living.

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  • Decide if the Business Is Right for You
  • Hone Your Idea
  • Brainstorm a Consignment Shop Name
  • Create a Consignment Shop Business Plan
  • Register Your Business
  • Register for Taxes
  • Fund your Business
  • Apply for Consignment Shop Business Licenses and Permits
  • Open a Business Bank Account
  • Get Business Insurance
  • Prepare to Launch
  • Build Your Team
  • Run a Consignment Shop - Start Making Money!

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Sample Consignment Store Business Plan

Consignment shop business plan pdf sample.

Are you looking for a cheap and easy business to start?

When you want to start a new and exciting business, you may want to think about starting a consignment shop. There is a lot that you can do with this type of business and still have a lot of fun doing it at the same time.

A consignment shop is a store where people bring things that they want to sell.

Oftentimes this is clothing, but it can be any number of items. You then sell the items for the person and take a percentage of the profit, giving them the rest.

Consignment shops are great not only for the owner but for the customers as well. People who can’t afford to shop retail can find nice items in consignment at a lower price.

Consignment shops have started popping up in nearly every town across the United States and the world at large.

Whether they are selling clothes or furniture, sporting goods, or household appliances, consignment offers a great way for people to buy and sell used goods, whether it is online or in a brick-and-mortar store.

I have here 5 steps to take for you to be able to start a consignment shop in your community or city and here they are.

  • Research your Competitors

It takes a lot of research and groundwork to kick-start any kind of business and starting a consignment shop is no different.

Before you begin this business, you have to research your competitors. Jot down what you believe are their strengths and weaknesses. You should fine-tune your business plan and your advertising to play up your uniqueness. Decide what area of town your consignment shop would do best in.

  • A Business Plan for your Consignment Shop

For a business to be successful, the one thing it needs initially above anything else is a solid consignment shop business plan. Even if you are not planning on getting a loan, you still need a business plan to help you plan things out and know the direction you want to move in. Without a business plan, the success of your consignment shop is uncertain.

Even a ten-page business plan will double your chances of success. Your business plan should spell out what your market is like, what kind of competition you have, and what niche you will fill. It should specify your business structure, how many employees you’ll need, and what your startup costs will be, as well as what your monthly overhead costs will be and how many months it will take for you to break even.

You also need to write a basic marketing plan and write a detailed resume for yourself and why you have what it takes to run a great consignment shop. There are plenty of resources online for how to write a business plan, but that gives you the thumbnail sketch.

  • Selecting a Location

The location is a primary consideration and one of huge significance. Several aspects need to be considered.

Obviously, the first consideration is rent. Most prime locations charge a steep rent. But if you can afford it, you should not compromise on a location that has all the elements necessary to start a consignment shop.

Some of these are ample parking space, high traffic from pedestrians and vehicles, and proximity to similar or complementary businesses.

Have it in the back of your mind to get a good location that fits your budget so you don’t end up in a tight situation.

This will be easier than you think. Almost any consignment store owner will tell you that getting inventory is not a problem. Place a few ads or let friends know you’re taking inventory, and your store will fill up faster than you can believe.

The real problem is picking stuff that will actually sell. That’s a fine art, and most of your long-term success as a consignment store owner will hinge on it. Just keep practicing.

If you are taking things in on consignment, remember to only accept items that really grab your attention. You have no obligation to take things off of people’s hands that are too used or don’t fit with your style. The pickier you are, the more unique your store will become.

  • Advertising your Consignment Shop

If you decide to start up a consignment shop, your biggest expense is going to be advertising. Be patient and continue to spread the word. Be fair with your prices and people will come in and give you repeat business.

As you make a profit, grow your business with it. Eventually, you could move your home-based business to something even larger!

You can advertise in the local newspapers. This is a great way to let others know who you are and what you want to do. Another good idea is to send out flyers to the local neighbors in your area to let them know that you are new and that you are in business.

CONSIGNMENT SHOP BUSINESS PLAN EXAMPLE

Here is a sample business plan for starting a consignment store.

A consignment store business is a business that can be started with very little capital. This is simply because it involves the sale of fairly used items that do not really cost a lot. The goods that you intend to sell in your consignment store can be sourced from individuals that do not need them and sold to those that need them at very affordable prices.

The ease with which a kids consignment store can be set up makes it a perfect business for individuals that do not really have a lot in terms of capital.

Apart from doing your feasibility study and raising the capital for starting a consignment store business, you will also need to come up with a business plan. Well, this article contains a consignment store business plan sample. This will help you write the perfect business plan for your consignment store business.

Business Name:  Mr. Woods Consignment Store

Executive Summary

Our Products and Services

Vision Statement

Mission Statement

Business Structure

  • Market Analysis

Sales and Marketing Strategy

  • Financial Plan

Competitive Advantage

Mr. Woods is a consignment store that will be located in Detroit, Michigan. Mr. Woods consignment store was established by Jesse John, a renowned furniture maker with over 30 years of experience. This business will be set up at $50,000 and will make very cheap but quality furniture available to the residents of Detroit, Michigan.

To get things started, we have already gotten an ideal facility where our consignment store will be located. This facility is in a very busy environment and also very easy to access. We are not just in this industry to make money, we are also very interested in becoming one of the biggest consignment stores in Detroit, Michigan, the entire United States, and major cities in neighboring Canada.

The level of competition in the consignment industry is quite high. The reason for this is the very little amount that is needed to start this business, the very little requirement for technical skill, and the huge gains that can be made in this industry.

To survive in this highly competitive industry, we have decided to create our own niche. We will not just sell products to members of the public, we will stick to the sale of furniture only.

Some of the goods that we will be selling are

  • Fairly used office furniture
  • Fairly used kitchen cabinets

At Mr. Woods consignment store, our vision is to establish a top-notch consignment store in Detroit, Michigan. We aim to use this means to meet the basic furniture needs of the people of Detroit, Michigan.

At Mr. Woods consignment store, our mission is straightforward. Our mission of establishing a consignment store is to make all manners of quality furniture available to the residents of Detroit, Michigan at very cheap prices. We are also looking to become a force to reckon with in this industry.

Several things keep us driven at Mr. Woods’s consignment store. However, a few of them are; to help people get the best of furniture at giveaway prices and to dominate the consignment store industry in the United States.

We are a new consignment store and we know that we will have to be intentional if we want to make it to the top.

To ensure that we become a force to be reckoned with in a very short while of operation, we will hire only hardworking and experienced individuals to work with us.

We will also ensure that our workers put in their best by giving them the best treatment possible.

Market Analysis Market Trends

The consignment industry has been running for quite a while. Since it was established, all it has done is flourish even when other industries haven’t. This is so because of the very high demand for cheap and quality fairly used goods.

The truth remains that the demand for consignment goods skyrockets when the economy is bad.

Now, look at it from this perspective; when the economy is bad, lots of individuals can’t afford to get quality new goods. This, therefore, makes most people focus their attention on fairly used goods.

There is a high level of competition in this industry, as a result of this, we have come up with strategies to help us make more sales than our competitors. Some of them are;

  • We will ensure that we have a strong internet presence
  • We will ensure that our handbills are made available at public places so that people can get aware of our existence

Target Market

  • There are lots of consignment stores scattered across the United States. This implies that there is a high level of competition in this industry. We have carried out our research and have decided to deal in furniture only. Those we are looking to offer our services to are;
  • Family People

Financial Plan Source of Startup Capital

Not much is need to start up this business. Despite this, we do not have all the money that we require to startup. We have 50% of the amount we need. This amounts to $25,000, the remaining amount will be sourced from the bank.

Mr. Woods consignment store is a consignment store that focuses on furniture only. Now, the fact that this consignment store is owned by a furniture maker automatically puts us ahead of other consignment stores in our niche. We have decided to capitalize very strongly on this factor.

This is a business plan sample for a consignment store business . This business is owned by Jesse John and will be located in Detroit, Michigan.

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Thrift Store Business Plan Sample

AUG.23, 2018

Thrift Store Business Plan Sample

Do you want to start thrift store business?

Do you want to start a thrift store? Well, if you want to start a business whose startup costs will be run over by the profits earned in the very few months, helping the underprivileged side by side, then this is undoubtedly the most suitable business for you.

A thrift store resembles opening a second hand store , in which you can keep used clothes, books, furniture, crockery or whatever you want, and sell them in relatively low prices. The thrift store owners gather the items by the rich community, which are in a position to be used again, and keep them in their stores.

Just like every other business, the first thing before starting a consignment shop is to make a business plan for thrift store , adding all the details and decisions about how will you manage to collect the items, how many persons will be required, which will be the most suitable location etc. As you might be starting this business without experience, you will be in need of a help regarding writing an professional business planning . You can take help from this s thrift store business plan sample  free of cost written for a thrift store startup named, ‘City Thrift Store’.

Executive Summary

2.1 the business.

City Thrift Store will be owned by Jude Daylon, who is a graduate from Harvard University. City Thrift Store will be located on Howard Street, one of the bustling streets of San Francisco. The business plan for thrift store is aimed to gather the used items which are in a condition to be used again and sell them at economical prices. The variety and number of the used items depend upon how vast do you want your business to expand. City Thrift Store is aimed to keep used clothes, books, toys, musical instruments, furniture items, small electronic instruments at the store with appealing presentation all the time.

2.2 Management

Management is the primary footstep on which the whole thrift store business stands. This business will require extraordinary management skills to make sure that the stock of items is available in the store every time and is displayed in the appealing way.

Jude has many unique thrift store marketing ideas , and he will act upon all by being the manager himself. Before starting a consignment shop business , Jude has planned all the policies and possible mechanisms for the smooth running of the store. He has hired a number of drivers and social workers to collect the items by roving in the whole San Francisco, which is a necessity to start a second hand store .

2.3 Customers

Our target market will be the residents who can’t afford expensive things and have relatively low income than the other citizens. Moreover, the people who are travelers, tourists, or students and want to buy reasonable but good quality goods for temporary use will also be our potential customers.

2.4 Business Target

We aim at becoming the most visited thrift store in the whole San Francisco. We aim at stabilizing our business plan for thrift store and balancing the initial startup costs with earned profits by the end of the first year.

The business targets and the profits as forecasted by our experts for the next three years are demonstrated in the following graph:

Thrift Store Business Plan - 3 Years Profit Forecast

Company Summary

3.1 company owner.

City Thrift Store will be owned by Jude Daylon. Jude is a graduate and has been working as a senior manager in a prestigious restaurant for four years. Jude has done a lot of research on how to start a second hand store  and is passionate enough to help the underprivileged. He wants to start a trusted thrift store by collecting used products from the wealthier community.

3.2 Why the business is being started

San Francisco is the city, which is suffering from highest levels of income inequality. The difference of the income can be demonstrated by the fact that the city is divided in two groups of rich and poor, and the category being called as rich is the one which has 11 times income than that of the poor. An estimate shows that one out of ten families in the Bay Area are struggling to hardly make both ends meet.

Besides that, the rich community dispose of many things which are in usable or sometimes good state just because they get bored. Such people want someone to take away donations of clothes and other things from them and give to the poor, by usually putting them outside of their houses. So, Jude has decided to help the low-income and average households of his city by gathering those items and running a consignment shop .

3.3 How the business will be started

Don’t do the mistake of opening a consignment shop , without efficient planning. You will need the persons to load the luggage onto the vehicles and display them in different sections in the store. Jude has planned to make separate and arranged sections of the products so that customers can easily buy them. Jude has arranged the vehicles for loading the used items, he has made a list of the staff he will require to hire, moreover, he will also hire some good speakers to raise awareness among the wealthy to donate the things they don’t need.

If you are going to enter this venture you have to collect many things before starting the shop. But, this all can be done only by accurate planning. If you are new to the business plan for thrift store , you can take help from opening a consignment store ideas and plans available on the web like this one free of cost.

The financial experts have forecasted following costs for expenses, assets, investment, and loans for the startup.

Thrift Store Business Plan - Startup Cost

Services for customers

If you are thinking about starting a second hand store , you must decide the things you will keep in your store. A thrift store can contain anything which can prove useful for the people. In case, you are a beginner in this business and don’t know much about how to open a second hand store , you can take help from this thrift store business plan sample of City Thrift Store. This sample business plan will not only guide you in opening the store but will also assist you by explaining how to run a consignment store successfully.

The City Thrift Store has hired skilled repairers to repair any type of damages to the second-hand objects and make them reusable. Our store will sell the following items.

  • Furniture: We’ll clean and polish the furniture items such as wooden tables, chairs, cradles, old rugs and carpets, cupboards, etc. which are in a reusable condition and sell them to at very low and economical prices.
  • Clothes, Shoes & Books: The reusable books, shoes, fashion accessories, and clothes like dress shirts, sweaters, jackets etc. will also be kept at the store to be purchased by the low-incomes.
  • Small Electronic Devices: We will also sell the technology products and small electronics such as cell phones, microwaves, printers, mobile and computer accessories, storage devices and much more than that.
  • Sports Equipment & Musical Instruments: This type of inventory is often found in the solely new condition as people after getting bored put their guitars, pianos, rackets, footballs and the things like that outside their house to be taken by someone, so we have decided to keep such reusable things in our shop.
  • Miscellaneous: Besides the above-mentioned necessities of living, we will also keep the miscellaneous items like crockery, decoration pieces, baskets, plastic products etc.

Marketing Analysis of thrift store business

The most significant component of a thrift store business plan is its precise and accurate marketing analysis. Marketing analysis will help you to understand the position and demand of this business plan for thrift store in the latest market. It is important as it can help you in finding the most suitable location for your store. The location which will be frequently visited by your target customers and your donors. Your consignment shop business plan  must also include the strategies and policies you’ll adapt to market your services and how effectively can you gain and maintain your potential donors.

So, if you have any doubts and confusions regarding how to start a consignment shop business , you can take help from the thrift store business plans available online, you can also take help from this thrift store business plan sample  for City Thrift Store. You can also have the opportunity of downloading business plan for thrift store pdf from the web. No matter, how many business plans you read before writing yours, that cannot be equivalent to a single consignment store business plan  written by a professional marketing analyst. It would be better for you to seek the services of a professional to make for you a thrift store business plan template . A professional can better understand the marketing trends and do accurate marketing analysis and segmentation of your location before making a thrift store business model  for you.

5.1 Market Trends

Due to the rising economic inequality in the city and financial stress on the underprivileged and the average, people are now trying to cut their discretionary spending and are fascinated towards the idea of buying second-hand things on reasonable prices. The industry of selling used goods is growing at a noticeable rate of 2.6% annually. According to IBISWorld, there are about 84,037 such businesses running in the United States, employing more than 267 thousand people in the whole country. No matter, how many businesses of thrift store are currently running in the country, there is still demand of more in some areas, like the one for City Thrift Store.

If you are thinking that how can you generate a profit by selling the goods at almost no prices, whereby you have to bear the expenses of the staff you hire, don’t worry current report by IBISWorld has shown that this business has generated $20 billion at an annual rate.

These statics shows that you can also earn a massive profit besides helping people, provided that you plan your business plan for thrift store successfully.

5.2 Marketing Segmentation

Our customers will be the people with average financial background. Most people living in the Bay Area of San Francisco do not have enough incomes to meet their expenses in a rich city. These people lust for the items like clothes, furniture etc. and are convenient in buying used items. It is also a requirement of this business to attract notable and rich people for maximizing our donations, they will not be our customers, they will be our need. We’ll arrange seminars and advertise the need of their donations through social media.

Thrift Store Business Plan - Market Segmentation

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Moneyless Senior Citizens: According to a report by City Performance Scorecards, more than 15 thousand senior citizens are living below the poverty level in San Francisco. The health and age of such people don’t allow them to meet their needs by hard work.

5.2.2 Underprivileged Children, Teens & Adults: There are many children and teens in the city who desire to buy good clothes, tech-based things, or sports equipment and musical instruments, but the reality is that most of their desires remain unfulfilled due to the costs of such items. Moreover, about 61 thousand young and adults are living below the poverty level in San Francisco, according to the same report. So, our marketing analyst has identified this as our largest target group in buying used goods.

5.2.3 Tourists & Students: There are often situations when you are roaming in another country, but due to wrong estimates, become out of budget. So, the tourists or students who have to cut their discretionary needs, temporarily, will also be one of our target groups.

5.3 Business Target

We aim at serving more and more needy and average people of our city to help them in raising their status and spirits. Our aim is to become the most visited thrift store in our city and the most trusted thrift store in the eyes of donors. We also aim to balance the initial startup costs with the profit earned in only a few months after the launch.

5.4 Product Pricing

Our main target is to serve the underprivileged community of the city, but, due to requirements of staff, wages of employees, costs of inventory, and expenses of transportation, we can’t sell the items totally free of cost. However, we have priced all the items at very meager and low costs to meet the targets of our business plan for thrift store .

Great service

Great service. Good turnaround time and quality work. Thanks!

If you are opting for starting a consignment store , you must prepare an effective and detailed business plan first. If you want your business plan to be complete and outstanding than instead of focusing on just how to open a consignment store you should also focus on how to run it successfully and how to pull the traffic to your site. If you are having difficulty about how to start a thrift store business plan, you can take help from this sample business plan for the City Thrift Store.

6.1 Competitive Analysis

Our biggest competitive advantage is the location which we have chosen after a great research and analysis. Our store is located on the main street of San Francisco, which is a street every citizen encounter while travelling in the city, as it connects the residential communities to the offices, institutes and recreational places. When so many people pass by our shop daily, a large number of them will be surely attracted toward our beautiful display through the large sized windows.

Our second competitive advantage is our excellent management system. We’ll collect the item which are in a good condition daily and display them in well-organized separate sections in our stores for the convenience of our buyers. Moreover, we have a quick transport facility for the rich people who want to donate their goods to us in large amounts.

6.2 Sales Strategy

For promoting our sales, we will advertise our store in local magazines, newspapers and social media. We will also distribute our flyers in nearby schools and colleges. We’ll post our banners in well-off residential communities.

6.3 Sales Monthly

Thrift Store Business Plan - Sales Monthly

6.4 Sales Yearly

Thrift Store Business Plan - Sales Yearly

6.5 Sales Forecast

By analyzing our market segmentation strategy, our experts have forecasted the following sales on a yearly basis which are summarized in the column charts.

Thrift Store Business Plan - Unit Sales

Personnel plan

No matter how much you invest your assets on your startup, it is all going to be wasted if you don’t have honest and dedicated workers. Before you open a consignment store , you must make a list of the workers you’ll need to hire. You should train your staff before starting your shop that how to value the needs of customers and help them in finding the best product for them.

If you are searching for how to start a consignment store,  then you can take help from this sample business plan for thrift store in which we have a complete guide on how to run a consignment shop . This thrift store business plan sample will guide you by informing you about the staff Jude will hire for running the City Thrift Store.

7.1 Company Staff

Jude will manage the overall operations and will hire the following people for his assistance.

  • 1 Accountant for maintaining financial and other records
  • 2 Cashiers for selling products and maintaining records
  • 6 Salespersons for organizing the store and its different sections and assisting customers in finding their required item
  • 3 Drivers for collecting products from the whole city every morning
  • 5 Technicians/Workers/Sewers/Menders for repairing and reviving used things
  • 2 Cleaners for maintaining freshness and cleanliness of the store
  • 2 Persons responsible for advertisement of the store

Financial Plan

The first step before starting any business is to make a comprehensive business plan, and the most important part of an effective thrift store business plan is its financial plan. Before you start a consignment shop , you must collect a lot of items to keep in your store. You can find them free of cost but to be good and distinguished, you should sell these products after reviving them. For managing the costs of their repairs, the rent of your store and the salaries of your employees, you will need money initially. So, in your financial plan, you have to plan the ways of balancing your expenses with the profits earned. Although the business plan for thrift store is in great demand and has is responsible for generating a lot of profit annually, but besides thinking about how to start a consignment shop , you should also think about the worst situations you can face financially.

If you are searching for profit thrift store business plan and need help in writing an effective financial plan, you can take help from this sample business plan for thrift store on how to open a consignment shop . The statics and figures in this sample business plan are for the City Thrift Store, so, it is advised to hire a professional financial planner advisor, who can write for you an accurate financial plan according to your investments and sales.

8.1 Important Assumptions

The company’s financial projections are forecasted on the basis of following assumptions. These assumptions are quite conservative and are also expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.

  8.2 Brake-even Analysis

The following graph shows the company’s Brake-even Analysis.

Thrift Store Business Plan - Brake-even Analysis

 8.3 Projected Profit and Loss

8.3.1 profit monthly.

The following charts shows detailed information about profit and loss, and total cost of sales.

Thrift Store Business Plan - Profit Monthly

8.3.2 Profit Yearly

Thrift Store Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Thrift Store Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Thrift Store Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

The following column diagram shows the projected cash flow.

Thrift Store Business Plan - Projected Cash Flow

Download Thrift Store Business Plan Sample in pdf

OGS capital writers specialize in business plan themes such as lingerie store business plan , snicker shoes business plan , clothing store business plan , bridal shop business startup , business plan for clothing store and many others.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Hertz halts plan to buy 65,000 electric cars amid EV slump

  • Hertz is pausing plans to buy 65,000 EVs from Polestar, the Swedish firm's CEO told the FT.
  • It comes after Hertz said it would sell 20,000 electric vehicles due to high repair costs.
  • It's the latest sign the EV push is stalling as automakers and drivers rethink going electric. 

Insider Today

Hertz is scaling back its EV ambitions.

The rental car giant is pausing plans to buy 65,000 electric cars from EV pioneer Polestar, according to comments made by Polestar CEO Thomas Ingenlath in an interview with The Financial Times .

This comes just weeks after Hertz said it would sell off 20,000 EVs — one-third of its electric vehicle fleet — citing high repair costs as a key reason for this.

Hertz's estimated $3 billion agreement with up-and-coming EV maker Polestar in 2022 was seen as a major moment for electric vehicle adoption.

It came after Hertz struck a similar deal with Tesla and agreed to buy 100,000 of its EVs in 2021. That deal has also had its issues, with Elon Musk's barrage of price cuts driving down the value of Hertz's fleet of used Teslas.

The rental company agreed to buy the Polestar's vehicles over five years as part of plans to have a quarter of its global fleet be fully electric by 2024.

However, since then the global EV market has stalled , with demand for electric cars slumping and major automakers rolling back some of their investments .

That's a problem for Hertz, which largely owns its vehicles outright and therefore faces big losses if their resale value falls.

The company said in January it plans to sell 20,000 EVs from its fleet , including Teslas, Chevrolet Bolts, and Volvos. Many are already available online at a steep discount .

Ingenlath told the FT that Hertz CEO Stephen Scherr contacted him last autumn to ask if the company could pause its agreement to buy a certain number of cars this year — which Ingenlath agreed to, so long as Hertz did not sell its current Polestar vehicles early or too cheaply.

The pause isn't great news for Polestar. Part-owner Volvo announced that it would stop funding the Swedish automaker last week, and Polestar is struggling to attract customers amid the wider EV slump, missing its delivery target for 2023.

Hertz is just the latest major automaker to rethink its ambitious EV goals in recent months. That includes General Motors, with CEO Mary Barra saying last month that the company would change tack and roll out a range of hybrids — several years after it said it would become an all-electric auto company .

Hertz did not immediately respond to a request for comment from Business Insider, made outside normal working hours.

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Watch: Elon Musk said Model 3s will come out of China by the end of 2019 — here's why that's hard to believe

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MoSCoW Prioritization

What is moscow prioritization.

MoSCoW prioritization, also known as the MoSCoW method or MoSCoW analysis, is a popular prioritization technique for managing requirements. 

  The acronym MoSCoW represents four categories of initiatives: must-have, should-have, could-have, and won’t-have, or will not have right now. Some companies also use the “W” in MoSCoW to mean “wish.”

What is the History of the MoSCoW Method?

Software development expert Dai Clegg created the MoSCoW method while working at Oracle. He designed the framework to help his team prioritize tasks during development work on product releases.

You can find a detailed account of using MoSCoW prioritization in the Dynamic System Development Method (DSDM) handbook . But because MoSCoW can prioritize tasks within any time-boxed project, teams have adapted the method for a broad range of uses.

How Does MoSCoW Prioritization Work?

Before running a MoSCoW analysis, a few things need to happen. First, key stakeholders and the product team need to get aligned on objectives and prioritization factors. Then, all participants must agree on which initiatives to prioritize.

At this point, your team should also discuss how they will settle any disagreements in prioritization. If you can establish how to resolve disputes before they come up, you can help prevent those disagreements from holding up progress.

Finally, you’ll also want to reach a consensus on what percentage of resources you’d like to allocate to each category.

With the groundwork complete, you may begin determining which category is most appropriate for each initiative. But, first, let’s further break down each category in the MoSCoW method.

Start prioritizing your roadmap

Moscow prioritization categories.

Moscow

1. Must-have initiatives

As the name suggests, this category consists of initiatives that are “musts” for your team. They represent non-negotiable needs for the project, product, or release in question. For example, if you’re releasing a healthcare application, a must-have initiative may be security functionalities that help maintain compliance.

The “must-have” category requires the team to complete a mandatory task. If you’re unsure about whether something belongs in this category, ask yourself the following.

moscow-initiatives

If the product won’t work without an initiative, or the release becomes useless without it, the initiative is most likely a “must-have.”

2. Should-have initiatives

Should-have initiatives are just a step below must-haves. They are essential to the product, project, or release, but they are not vital. If left out, the product or project still functions. However, the initiatives may add significant value.

“Should-have” initiatives are different from “must-have” initiatives in that they can get scheduled for a future release without impacting the current one. For example, performance improvements, minor bug fixes, or new functionality may be “should-have” initiatives. Without them, the product still works.

3. Could-have initiatives

Another way of describing “could-have” initiatives is nice-to-haves. “Could-have” initiatives are not necessary to the core function of the product. However, compared with “should-have” initiatives, they have a much smaller impact on the outcome if left out.

So, initiatives placed in the “could-have” category are often the first to be deprioritized if a project in the “should-have” or “must-have” category ends up larger than expected.

4. Will not have (this time)

One benefit of the MoSCoW method is that it places several initiatives in the “will-not-have” category. The category can manage expectations about what the team will not include in a specific release (or another timeframe you’re prioritizing).

Placing initiatives in the “will-not-have” category is one way to help prevent scope creep . If initiatives are in this category, the team knows they are not a priority for this specific time frame. 

Some initiatives in the “will-not-have” group will be prioritized in the future, while others are not likely to happen. Some teams decide to differentiate between those by creating a subcategory within this group.

How Can Development Teams Use MoSCoW?

  Although Dai Clegg developed the approach to help prioritize tasks around his team’s limited time, the MoSCoW method also works when a development team faces limitations other than time. For example: 

Prioritize based on budgetary constraints.

What if a development team’s limiting factor is not a deadline but a tight budget imposed by the company? Working with the product managers, the team can use MoSCoW first to decide on the initiatives that represent must-haves and the should-haves. Then, using the development department’s budget as the guide, the team can figure out which items they can complete. 

Prioritize based on the team’s skillsets.

A cross-functional product team might also find itself constrained by the experience and expertise of its developers. If the product roadmap calls for functionality the team does not have the skills to build, this limiting factor will play into scoring those items in their MoSCoW analysis.

Prioritize based on competing needs at the company.

Cross-functional teams can also find themselves constrained by other company priorities. The team wants to make progress on a new product release, but the executive staff has created tight deadlines for further releases in the same timeframe. In this case, the team can use MoSCoW to determine which aspects of their desired release represent must-haves and temporarily backlog everything else.

What Are the Drawbacks of MoSCoW Prioritization?

  Although many product and development teams have prioritized MoSCoW, the approach has potential pitfalls. Here are a few examples.

1. An inconsistent scoring process can lead to tasks placed in the wrong categories.

  One common criticism against MoSCoW is that it does not include an objective methodology for ranking initiatives against each other. Your team will need to bring this methodology to your analysis. The MoSCoW approach works only to ensure that your team applies a consistent scoring system for all initiatives.

Pro tip: One proven method is weighted scoring, where your team measures each initiative on your backlog against a standard set of cost and benefit criteria. You can use the weighted scoring approach in ProductPlan’s roadmap app .

2. Not including all relevant stakeholders can lead to items placed in the wrong categories.

To know which of your team’s initiatives represent must-haves for your product and which are merely should-haves, you will need as much context as possible.

For example, you might need someone from your sales team to let you know how important (or unimportant) prospective buyers view a proposed new feature.

One pitfall of the MoSCoW method is that you could make poor decisions about where to slot each initiative unless your team receives input from all relevant stakeholders. 

3. Team bias for (or against) initiatives can undermine MoSCoW’s effectiveness.

Because MoSCoW does not include an objective scoring method, your team members can fall victim to their own opinions about certain initiatives. 

One risk of using MoSCoW prioritization is that a team can mistakenly think MoSCoW itself represents an objective way of measuring the items on their list. They discuss an initiative, agree that it is a “should have,” and move on to the next.

But your team will also need an objective and consistent framework for ranking all initiatives. That is the only way to minimize your team’s biases in favor of items or against them.

When Do You Use the MoSCoW Method for Prioritization?

MoSCoW prioritization is effective for teams that want to include representatives from the whole organization in their process. You can capture a broader perspective by involving participants from various functional departments.

Another reason you may want to use MoSCoW prioritization is it allows your team to determine how much effort goes into each category. Therefore, you can ensure you’re delivering a good variety of initiatives in each release.

What Are Best Practices for Using MoSCoW Prioritization?

If you’re considering giving MoSCoW prioritization a try, here are a few steps to keep in mind. Incorporating these into your process will help your team gain more value from the MoSCoW method.

1. Choose an objective ranking or scoring system.

Remember, MoSCoW helps your team group items into the appropriate buckets—from must-have items down to your longer-term wish list. But MoSCoW itself doesn’t help you determine which item belongs in which category.

You will need a separate ranking methodology. You can choose from many, such as:

  • Weighted scoring
  • Value vs. complexity
  • Buy-a-feature
  • Opportunity scoring

For help finding the best scoring methodology for your team, check out ProductPlan’s article: 7 strategies to choose the best features for your product .

2. Seek input from all key stakeholders.

To make sure you’re placing each initiative into the right bucket—must-have, should-have, could-have, or won’t-have—your team needs context. 

At the beginning of your MoSCoW method, your team should consider which stakeholders can provide valuable context and insights. Sales? Customer success? The executive staff? Product managers in another area of your business? Include them in your initiative scoring process if you think they can help you see opportunities or threats your team might miss. 

3. Share your MoSCoW process across your organization.

MoSCoW gives your team a tangible way to show your organization prioritizing initiatives for your products or projects. 

The method can help you build company-wide consensus for your work, or at least help you show stakeholders why you made the decisions you did.

Communicating your team’s prioritization strategy also helps you set expectations across the business. When they see your methodology for choosing one initiative over another, stakeholders in other departments will understand that your team has thought through and weighed all decisions you’ve made. 

If any stakeholders have an issue with one of your decisions, they will understand that they can’t simply complain—they’ll need to present you with evidence to alter your course of action.  

Related Terms

2×2 prioritization matrix / Eisenhower matrix / DACI decision-making framework / ICE scoring model / RICE scoring model

Prioritizing your roadmap using our guide

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resale business plan

IMAGES

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