Have you ever planned on starting your own business but not know what to do? Well; I seriously suggest that you take a little look at the idea of running your own second hand clothes business. This business is very much recession proof (everybody needs clothing, right?), not to mention the fact that when you run your own second hand clothing business you will be doing your bit for the environment! On this page I want to run you through how to start a second hand store. It is probably worth noting at this stage that this is not a complete guide, not by any stretch of the imagination. You will learn enough on this page to give you the drive to move forward though.
Define Your Niche
There are a couple of people out there who have been successful in crafting a ‘general’ second hand clothes store. These are stores which cater to just about everybody. They can be successful but in my opinion they are pretty tough to get up and running. This is because you will have no clear focus for your business. There is nobody really to target your marketing too, and this can lead to a bit of a haphazard approach and that in turn will cost you cash. In my opinion; you should always think long and hard about the people that you want to cater for. If anything it is going to make your stock purchase decisions that much easier.
Remember; defining your niche is going to have an impact on just about everything related to your business. This is why you need to do it at the earliest stage possible. You almost certainly want to do it before you choose the location of your business.
I am not going to dive too much into the type of people you are going to want to target with your second hand business. This is very much a personal choice. I do however suggest that you take a little look at second hand clothing stores in your local area. You will want to see whether they are catering to any particular niche. If they are; you are going to want long and hard about what niche is not covered. You may be successful in that one. Read more about how to pick a fashion niche.
The Business Plan
If you are going to get a bank loan then you will need to have a business plan in tow. If you do not have a business plan then you will be laughed out of the bank manager’s office. In fact; even if you are not planning on getting a loan I still recommend that you put together a business plan. This is because it is going to help define the direction of your business. You will be able to refer to this business plan when making decisions with regards to your marketing, the design of your store, the products you buy in to sell, and you will even be able to use your business plan to keep a record of your goals. Your business plan will most likely be updated quite regularly.
Many people are put off the idea of writing a business plan simply because they believe it is too complicated. It really is not. In fact; writing a business plan is dreadfully simple. You will be able to find plenty of guides online that you can download. In fact; you may even stumble across a template or two that you can take a peek at. If you are serious about running a second hand clothes business then you should have no excuse not to have a business plan. In fact; this goes for just about any business. If you are not willing to put together a business plan then you should consider whether being the owner of a company is right for you. Learn more about Business Plan
Selecting Your Location
If you are starting up an online-only second hand clothes business then you can skip this step. Although you will of course want to have some consideration as to how you are going to get the name of your company out there online to actually start making sales. There are plenty of guides out there for that though.
One of your main considerations when selecting your location will be who your target market actually is. Let’s say you are aiming to cater to low income families. Obviously the last thing you want to do is to stick your second hand clothes business on an industrial estate somewhere. You will never be able to get enough customers to make a living. Of course; being on an industrial estate may be good if you are looking to start a business that deals in work wear and the like (which is incredibly niche but has the potential to be hugely possible)
In summary; you need to put a lot of effort into choosing the right location for your business. If you choose the wrong location then you stand zero chance of being successful. Read more about how to choose a location
Sourcing Your Stock
Of course; you can’t run a second hand clothing business without actually having clothing to sell. By this point you should already know which niche you wish to operate in. This should actually make sourcing your stock that much easier.
There are a lot of wholesale companies out there where you can purchase second hand clothing. Some of them are pretty decent too. It is worth taking the time to do your research though. I have stumbled across a few second hand clothing companies who are absolutely abysmal in their offerings. These companies need to be avoided because you do not want to sell sub-par second hand clothing. It is important that you find a reputable used clothing supplier too. If you have a decent business, and that is what we are going to be hoping for, then it is likely that you are going to need a steady supply of second hand clothing.
I have seen a few companies who will purchase second hand clothing from individuals. There is nothing inherently wrong with this, but I suggest that you give yourself a bit of time in the business before you actually do this. This is in part down to the fact that you are not going to know what a particular item of clothing has the ability to sell for. This may lead to you overpaying for stock that you are not going to shift in a million years. This is something which you obviously want to avoid (no company likes dead stock!). If you do feel that you can tackle purchasing second hand clothing directly from an individual then do try and give it a go. It may actually bring you in a lot of cash!
Should You Offer Other Services?
The profit margins on second hand clothing are not exactly high. If you wish to be incredibly profitable then you are going to need to develop your business over a number of years. Many people will give up by this stage simply because they do not have the cash to lead their day to day life. In the early stages of running a second hand business I really do suggest that you take the time to determine whether you want to offer additional services. You will want to offer something related to the supply of clothing e.g. dry cleaning or even on-site alteration services. The benefit of this is that both services are not only profitable but should draw a number of customers through the door. Once you get customers through the door then it is going to be easy to sell second hand clothing to them. Find out which additional services you can provide.
Determine Your Legal Obligations
If only it was as easy as opening up a store, sticking your stock in there and hoping for the best. One of the most difficult things about running any business is the fact that it is difficult to jump through all the legal hoops. If you can retain the services of a lawyer then I really do suggest that you do so. They will help a lot. You will also want to talk to an accountant about your tax obligations.
It is important that you determine what the laws are in your specific area. For example; some countries make it a legal obligation to disinfect all second hand clothing that you intend to sell. Some countries do not worry about this. They just care that the clothing is clean.
I think your main concern will really be the tax situation. The last thing you want to do is start up a business without knowing anything about your tax obligations. This will lead to failure pretty quickly. Find out more about your legal requirements in the UK.
In most countries it is a legal requirement to have business insurance for your company. Even if it is not a legal requirement in your country then I suggest you get it anyway. Hopefully the worst will never happen but if it does you will be glad that you were covered.
Setting Up Your Store
One of my biggest gripes with many a second hand clothing store out there is the fact that they look far too tatty. Many people seem to think that if you are selling second hand clothing you really do not have to go all out in terms of the décor of the store. Trust me; you do. The décor of the store is going to be absolutely everything. People do not want to purchase from a place which looks dirty. They want to purchase from a high quality clothing store and that is exactly what you want to be giving them.
If you have a bit of cash to spend then I really do suggest that you talk to an interior designer who has experience in the planning of clothing stores (does not necessarily have to be a second hand clothing store). An interior designer will be able to identify the right layout to maximize the number of sales that you end up making. Honestly; many people are surprised at just how much of an impact the layout of the store will have on whether somebody purchases or not. A secondary benefit of an interior designer is the fact that they will be able to supply you with equipment at far lower prices than you would have paid normally. This means that in theory you will be saving money by going down the route of an interior designer.
One tip I am happy to give you when looking into how to start a second hand store, and it is something which I really feel would benefit a second hand clothing store, is the installation of changing rooms. There are so many companies out there which do not operate changing rooms and it is crazy. Most people will never purchase clothing unless they know that they are going to be happy wearing it. After all; nobody wants to trounce back on to the clothing store when they realize they do not look any good in what they have purchased. The installation of changing rooms should not be that expensive but can really help take your profits to the next level.
This is a personal choice. Additional staff is going to be fantastic for those times when you want a day off. They can be incredibly expensive though, even if you hire them for just a few hours a week, simply because you have to pay extra on your insurance policies. The paperwork required for an employee can be quite daunting too. Many new second hand clothing businesses skip out on the idea of additional staff to begin with simply because of the cost. It is something which you are going to want to look into eventually though.
Remember; starting a second hand business is not going to be easy. It is going to be incredibly fulfilling though. There will be hurdles. You will be able to overcome them. Never give up on pursuing your dream!