resale clothing business plan

Consignment Shop Business Plan Template

Written by Dave Lavinsky

Consignment Shop Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their consignment shop companies. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a consignment shop business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Consignment Shop Business Plan?

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

Why You Need a Business Plan for a Consignment Shop

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

Sources of Funding for Consignment Shop Businesses

With regards to funding, the main sources of funding for a consignment shop are personal savings, credit cards, bank loans, and angel investors. When it comes 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 ensure 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 consignment shops.

Finish Your Business Plan Today!

How to write a business plan for a consignment shop business.

If you want to start a consignment shop or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your consignment shop business plan.

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 kind of consignment shop you are running and the status. For example, are you a startup, do you have a consignment shop that you would like to grow, or are you operating a chain of consignment shops?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overv iew of the consignment shop industry.
• Discuss the type of consignment shop you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of consignment shop you are operating.

For example, you m ight specialize in one of the following types of consignment shops:

• Clothing : this type of consignment store primarily focuses on new or used clothing but some also sell jewelry, shoes, or accessories. General clothing consignment stores stock clothing for women, men, and children and accept both used and new pieces. Niche or boutique stores focus on a particular type of clothing.
• Books: this type of consignment store buys and sells a variety of books. The inventory is hardback and paperback books from any genre. Some stores also carry specialty books, such as cookbooks or textbooks and also offer audio books, writing journals, and stationery supplies.
• Music and Movies: this type of consignment store focuses on films, used and new copies of DVDs, and cassette tapes. They will also focus on music, selling used and new CDs, and records. Hybrid entertainment consignment stores sell both music and movies.
• Furniture: this type of consignment shop carries a wide array of general furniture pieces, or focuses on a niche within the furniture industry. General furniture consignment stores carry used pieces, factory rejects, or unsold items from other furniture stores.

In addition to explaining the type of consignment shop you will operate, the company overview needs to provide background on the business.

Include answers to questions 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, the number of sales with positive reviews, reaching X number of pieces sold, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the consignment shop industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the consignment shop industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason 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 consignment shop business plan:

• How big is the consignment shop 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 target market for your consignment shop? 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 consignment shop business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals such as young adults, college students, and families.

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

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

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

Finish Your Consignment Shop Business Plan in 1 Day!

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

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 othe r consignment shops.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes department stores, big box retailers, and garage/yard sales. You need to mention such competition as well.

For each such competitor, provide an overview of their business 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 customers do they serve?
• What type of consignment shop are they?
• 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 better hours and is your store more visible?
• Will you offer products or services that your competition doesn’t?
• 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 consignment shop business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f consignment shop company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide an online presence, buyback programs, or purchase items not generally sold at your store?

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

Place : Place refers to the site of your consignment shop. Document where your shop is situated and mention how the site will impact your success. For example, is your consignment shop located in a busy retail district, a business district, a standalone location, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your consignment shop marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

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 consignment shop business, including taking daily inventory, customer interaction, purchasing used items and/or placing newly acquired items for sale, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth session, or when you hope to reach $X in revenue. It could also be when you expect to expand your consignment shop to a new city.  

Management Team

To demonstrate your consignment shop’s potential 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 consignment shops. 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 as 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 consignment shop or successfully running a small retail business.  

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 s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue 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 buy and sell 5 items per day, and/or offer in-store coupons ? 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 consignment shop, 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 lender 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 ensure 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.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a consignment shop:

• Cost of shop equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

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 shop location lease or a list of products you plan to buy and sell.  

Writing a business plan for your consignment shop is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the consignment shop industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful consignment shop.  

Consignment Shop Business Plan Template FAQs

What is the easiest way to complete my consignment shop business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your consignment shop business plan.

How Do You Start a Consignment Shop Business?

Starting a consignment shop business is easy with these 14 steps:

• Choose the Name for Your Consignment Shop Business
• Create Your Consignment Shop Business Plan
• Choose the Legal Structure for Your Consignment Shop Business
• Secure Startup Funding for Your Consignment Shop Business (If Needed)
• Secure a Location for Your Business
• Register Your Consignment Shop Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Consignment Shop Business
• Buy or Lease the Right Consignment Shop Business Equipment
• Develop Your Consignment Shop Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Consignment Shop Business
• Open for Business

Learn more about how to start your own consignment shop business .

Don’t you wish there was a faster, easier way to finish your Consignment Shop 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 plan professional services can help you create a winning business.

Other Helpful Business Plan Articles & Templates

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 .

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.

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

WRITTEN BY: Meaghan Brophy

Get Your Free Ebook

Your Privacy is important to us.

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

Starting A Business?

• 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.

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.

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.

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.

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.

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.

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

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

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.

Join Fit Small Business

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Select the newsletters you’re interested in below.

We earn commissions if you shop through the links below.  Read more

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 March 13, 2024

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. 

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. 

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.

What barriers to entry are there?

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

Related Business Ideas

How to Start a Skate Shop

How to Start a Sock Business

How to Start a T-Shirt Business

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.

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

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

Powered by GoDaddy.com

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.

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.

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 2024

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.

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. 

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.

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

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.

I have recently given a small art gallery several of my handmade quilts for sale. I am curious as to what practices, documentation if any that the gallery should have provided to me to show I submitted these items and what happens if my items are stolen from the store. I feel concerned without anything “in hand” to prove that these things were given to them. Thank you for your advice.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

• 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!

Subscribe to Our Newsletter

Featured resources.

16 Profitable Retail Business Ideas

Carolyn Young

Published on December 1, 2022

The world of retail is huge, and lucrative opportunities are many. Retail offers endless areas for a budding entrepreneur to explore ideas for newbu ...

16 Profitable Wholesale Business Ideas

Natalie Fell

Published on November 4, 2022

Think about going wholesale? It’s a pretty reliable route to businesssuccess.  A wholesale business purchases products directly frommanuf ...

16 Profitable Ecommerce Business Ideas

Published on June 20, 2022

If you’re considering starting a business, e-commerce seems like a natural choice, since more and more people are looking for goods and serviceson ...

No thanks, I don't want to stay up to date on industry trends and news.

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.

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

How to Start a Reseller Business: 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 one, and how to start a reselling business online.

Start selling online now with Shopify

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

Reselling can be a profitable business model, particularly if you possess niche expertise. You can leverage your knowledge and skills to promote different products within your area of specialization. Curate a selection based on market trends and customer preferences and you’re likely to build a loyal customer base.

What are the advantages of being a reseller?

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

1. 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 .

2. 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.

3. Get a resale permit

Apply for a reseller permit in each state where you buy and sell goods. Note that there might be fees associated with this permit.

Sales tax laws vary by state, with each state setting its own rates. According to the Tax Foundation , 45 states and the District of Columbia impose statewide sales taxes, and 38 of these also collect local sales taxes. To understand your obligations, it’s best to check with your local authorities.

In the United States, businesses holding a reseller permit don’t pay sales tax on products they purchase for resale. Instead, these businesses are required to charge and remit sales tax to the state from their customers’ purchases.

If your business operates across multiple states, such as having a headquarters in one state and a distribution center in another, you need a reseller permit for each location. For instance, if you’re registered in New York but also operate in New Jersey, you will need a permit for both states to legally charge and remit sales tax.

Additionally, you will need an employer identification number (EIN) to pay federal taxes and open a business bank account. Obtaining an EIN is free, and you can easily do so by visiting the IRS website and following the instructions provided there.

Choosing a fulfillment method for your reseller business

When starting an online reselling business, you need to decide how to fulfill customer orders. Here are three main options:

1. Third-party logistics (3PL)

You can employ a third party to manage your inventory, fulfillment, and shipping. This differs from dropshipping because you own the inventory and pay for its storage. This method suits those looking to resell bulk wholesale products without managing the distribution process. It’s vital to be aware of any high fees associated with your third-party provider.

2. Dropshipping

Dropshipping allows you to run the front end of an ecommerce platform without holding any inventory. When customers place orders on your online shop, you pass these orders to a supplier who owns the products and fulfills them. Starting a dropshipping business is cost-effective as it requires no initial stock. However, you may face challenges such as less control over product quality and higher per-unit costs, which can lower your profit margins.

3. In-house fulfillment

If you choose this method, you store all inventory and oversee the packing and shipping yourself. This approach works well for small, unique, or specialty item inventories. Managing your inventory in-house helps maintain control over the entire process.

Finding suppliers for your resale business

DSers is a great tool for those seeking reliable suppliers for their resale business. 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 .

5 reseller business ideas/opportunities 

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 audiences 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

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.

5. Sneaker business

Sneakers come in a wide range of styles, from high-performance sports models to trendy streetwear options. Resellers can introduce new styles each season to keep their inventory fresh and appealing.

Take Packer Shoes , for instance. This New Jersey–based business began as a small local shop and has expanded by adopting a multichannel selling strategy. It now offers both popular brands like Adidas and its own unique designs.

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.

Optimize your site

When looking for opportunities to improve the profit potential of your resale business, it’s a good idea to start with your own ecommerce store. Consider using tactics that would increase your conversions, such as:

• Optimize product listings. Include high-quality images and detailed descriptions to make each product page informative and appealing.
• Streamline checkout process. Ensure the checkout is quick and easy, with minimal steps and clear instructions to reduce cart abandonment.
• Offer promotions and discounts. Use limited-time offers or volume discounts to encourage larger purchases.
• Implement live chat support. Provide immediate assistance to answer product questions and resolve issues, enhancing customer confidence and satisfaction.
• Utilize customer reviews. Display positive feedback prominently to build trust and influence buying decisions.

By using these tactics, you’ll set up your site to capture more sales and improve customer engagement.

Price your products well

While marketing your products is important, pricing your products well is essential to ensure your business remains profitable. Take into account all expenses, including marketing, employee salaries, and platform fees such as Shopify. These factors should all influence your pricing strategy.

Pro tip: Use a pricing calculator to help determine the right prices. These tools consider your costs and desired profit margin, ensuring you set prices that are competitive yet profitable.

Sell authentic items

Authentic products typically sell at higher prices due to their guaranteed quality and brand assurance. However, distinguishing genuine items from counterfeits can be challenging. To assist you, here are some tips to identify authentic products and reliable suppliers:

• Check for quality and detail. Authentic items usually have superior craftsmanship, including even stitching, precise logos, and high-quality materials. Compare the product to official images from the brand’s website.
• Verify with serial numbers. Many authentic products, especially high-end items, come with serial numbers that you can verify with the manufacturer or through official brand verification services.
• Research the supplier’s reputation. Look for reviews and feedback about the supplier from other buyers. Established and reputable suppliers are more likely to sell authentic goods.

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.

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

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. 

What products are the easiest to resell?

The simplest products to resell typically include books, electronics, fitness equipment, and skin care products. These categories often see consistent demand and can offer good profit margins. To identify potential hot items, you might want to explore popular trends on various online marketplaces and tailor your ecommerce strategy accordingly.

How much does it cost to become a reseller?

The expenses involved in starting a reseller business depend on your product selection and how you plan to fulfill orders. If you opt for dropshipping, you can begin with less than $100, since you don’t need to hold any inventory. On the other hand, if you decide to buy products in bulk, your initial costs could range from hundreds to thousands of dollars, due to minimum wholesale order requirements.

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.

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

How To Start a Dropshipping Business: A Detailed Step-by-Step Guide (2024)

Starting a dropshipping business in 2024? This article breaks down what you need to consider for a successful launch.

Advantages and Disadvantages of Ecommerce in 2024

Are you considering starting an ecommerce business? We've compiled a list of the advantages and disadvantages of ecomme…

15 Best Screen Recording Software Programs in 2024

Whether you want to create a product tutorial or capture gameplay footage, a high-quality screen recording software wil…

Oberlo uses cookies to provide necessary site functionality and improve your experience. By using our website, you agree to our privacy policy.

Upmetrics AI Assistant: Simplifying Business Planning through AI-Powered Insights. Learn How

Entrepreneurs & Small Business

Accelerators & Incubators

Business Consultants & Advisors

Educators & Business Schools

Students & Scholars

AI Business Plan Generator

Financial Forecasting

AI Assistance

Ai Pitch Deck Generator

Strategic Planning

See How Upmetrics Works  →

• Sample Plans
• WHY UPMETRICS?

Customer Success Stories

Business Plan Course

Small Business Tools

Strategic Planning Templates

E-books, Guides & More

• Sample Business Plans
• Retail, Consumers & E-commerce

Thrift Store Business Plan

Are you ready to enter the world of sustainable clothing, unique home décor, and hidden gems at unbeatable prices? If yes, owning a thrift store could be one of them, and it is indeed a good idea.

But before starting a new thrift store, you’ll need a business plan to increase your chances for success. So, why take a chance?

Well, we understand that creating a professional business plan can be challenging. That’s why we’re here to help you with our sample thrift store business plan .

It will help you understand what to include in your business plan and simplify your planning process. But before that, let’s learn why you need a thrift store business plan.

Why Do You Need a Thrift Store Business Plan?

A thrift store business plan is a professional document that provides the strategic direction, marketing approach, operational plan, and financial forecasting for opening or running a thrift store.

Whether you’re an experienced entrepreneur or a beginner, a well-written business plan helps you thrive in the competitive landscape.

Here are some key reasons to have a comprehensive business plan for a thrift store:

Outlining your business strategies

An actionable business plan helps you summarize your vision for the thrift store, including what strategies you’ll use to achieve your business goals. It also forces you to think about your business model, the types of products you want to sell, and how you’ll source your inventory.

Helping you get funded

Securing capital investment is a crucial aspect for many entrepreneurs. And having a detailed business plan helps you with the same. It shows investors, banks, or other stakeholders that your thrift store idea can be profitable and get the financial help needed.

Mitigating potential risks

A professional business plan allows you to identify potential risks or challenges. It will also help you develop strategies to mitigate those risks before they arise. So, a risk management plan helps you navigate the uncertainties of the business environment and make informed decisions.

Keeping you on track

A business plan will help you stay focused and guide you on what’s most important for your thrift store’s success. Also, it will allow you to make operational choices or strategic decisions that align with your business objectives and core values.

Things to Consider Before Writing a Thrift Store Business Plan?

Before diving right into writing a business plan, let’s make a strong foundation for your plan and ensure its effectiveness. Here are some key considerations:

Determine your business model

First of all, determine what type of thrift store you plan to operate. And decide on the specific niche, such as vintage clothing line, furniture, books, or general items. Try to consider how you’ll source your inventory, whether through consignment, donations, or purchasing products to resell.

Estimate startup costs

Once you have defined the business model, it’s time to develop a clear understanding of the capital investment. Your startup costs may include the expenses of inventory, leasing or buying a space, renovations, equipment, and initial marketing efforts.

Choose the best location

It’s crucial to select the right location for the success of your thrift store. So, you’ll need to think about the area’s foot traffic, visibility, and demographics. Also, research the local market demand and make sure that your chosen location aligns with your target market’s needs and shopping habits.

Define the social impact

There are so many thrift stores that have a social or sustainable mission, like supporting charitable causes or encouraging sustainability through reuse and recycling. So, think about how your business makes a positive impact and include that in your business plan.

Now, it’s time to explore the successful thrift store business plan outline:

Thrift Store Business Plan Outline

This standard business plan outline will cover all the essential sections that you should include in your business plan.

• Mission Statement
• Vision Statement
• 3 Year profit forecast
• Expansion Plan
• Business Structure
• Startup cost
• Products and Services
• Market Trends
• Target Market
• Moneyless Senior Citizens
• Underprivileged Children, Teens & Adults
• Tourists & Students
• SWOT Analysis
• Sales Strategy
• Marketing Objectives
• Advertising Strategy
• Pricing Strategy
• Average Salary of Employees
• Important Assumptions
• Brake-even Analysis
• Profit Yearly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

Now, let’s understand each section in detail so that you can quickly and easily draft your plan:

1. Executive Summary

An executive summary is a high-level introduction to your thrift store business plan.

This section is usually written at the end once the entire plan is ready, as it summarizes the most essential elements of your thrift store, from its mission statement to its financial outlook.

The executive summary is probably the only part that an investor would read. So, make it simple, crisp, and engaging to get funded.

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

2. Business Overview

The business overview section provides an in-depth understanding of your thrift store.

It helps you organize your business better and makes it easier for investors or readers to comprehend the nature of your business.

In this section, you may describe everything about your business, including the store name, the type of thrift store you will operate, legal structure, location, vision-mission statement, history, and future goals.

3. Industry & Market Analysis

The industry and market analysis is a detailed description of the industries or sectors your business expects to serve.

This chapter helps you highlight the market size, trends, and growth potential of the retail & thrift store industry.

For a successful thrift store, you’ll need to conduct thorough market research and competitor analysis to identify what demands your store will meet and what sets you apart.

4. Customer Analysis

The customer analysis section provides a clear overview of your target market and the primary customer segments.

It includes customer demographics(age, gender, income level, and other relevant characteristics), purchasing behavior, specific needs, or preferences.

5. Product and Services

The products and service offerings section is the most crucial aspect of your plan, as it helps you decide what things you’ll need to keep in your store.

You may give a detailed description of the primary products and services you wish to offer. It could be

• Clothes, shoes, & books
• Small electronic devices
• Sports equipment & musical instruments
• Miscellaneous items like crockery, plastic products, baskets, or decoration pieces

6. Operations Plan

The operations plan outlines all the intricacies of everyday business operations and activities centered on achieving your long-term business goals.

So, this section will help you demonstrate to investors a clear view of how your thrift store will operate on a day-to-day basis, including sourcing & inventory management, store facility, or any technology you will use.

7. Marketing Plan

As the name suggests, the marketing plan summarizes how your products are displayed and how you’ll attract and retain customers for your store.

It helps you develop effective marketing campaigns and streamline your promotional tactics while keeping track of your marketing budget and maximizing ROI.

You may describe a list of sales strategies and promotional methods such as social media marketing, partnerships with donors or consignors, loyalty programs, promotions, community events, etc.

8. Management Team

Your management team is crucial for the ultimate success of your thrift store as it outlines the key individuals responsible for your everyday business operations.

You may highlight your store owners and management team, along with their roles and responsibilities, educational qualifications, industry experience, and compensation plan.

This section helps you weigh authority and make investors confident about your business idea and vision.

9. Financial Plan

A well-structured and in-depth financial plan comes last but the most exciting section for potential investors. It is a comprehensive and realistic analysis of your business’s financial aspects.

This section will assist investors in evaluating your thrift store’s financial health and the potential to succeed. This will help you secure funding and guide your business planning approach.

You may include a detailed blueprint of your thrift store’s startup costs, revenue projections, operating expenses, profit & loss statement, cash flow projection, and break-even analysis.

Download Free Thrift Store Business Plan

Need help writing a thrift store business plan from scratch? Well, here you go; download our free thrift store business plan pdf and start now.

This advanced business plan template is specially designed with thrift shop businesses in mind. With step-by-step instructions and examples, it assists you in writing your own plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Start Preparing Your Thrift Store Business Plan

Finally, you know how to write a thrift store business plan. Now, it’s time to streamline your entire business planning process with our business planning app !

You will get easy-to-follow steps, 400+ sample business plans , and AI support to prepare a business plan in easy steps.

Also, our financial forecasting tool will assist you in developing accurate financial projections for 3-5 years if you are not adequate at finances.

Whether you aim to open a new store or grow an existing one, Upmetrics offers you valuable resources to write successful and professional business plans that perfectly align with your goals.

So, don’t wait and get started today!

Related Posts

Bookstore Business Plan

Furniture Store Business Plan

How to do Competitive Analysis

How to Analyzing your Target Audience

Frequently asked questions, what are the key elements of a successful thrift store business plan.

Creating a successful thrift store business plan involves the following key elements:

• Executive summary
• Business Overview
• Industry & market analysis
• Customer Analysis
• Product and services
• Operations plan
• Marketing and sales strategies
• Management team
• financial plan

How do I conduct market analysis for my thrift store?

You should follow the below steps to conduct a market analysis for your thrift store:

• Research the thrift store industry
• Note any significant trends
• Identify your target market
• Analyze your ideal customers and their preferences
• List out your competitors
• Define your competitive edge

Is owning a thrift store profitable?

Yes, owning a thrift store can be a profitable business. However, its profitability and success largely depend on a few aspects, such as shop location, business model, customer demands, marketing efforts, and operational efficiency.

What are the legal considerations for starting a thrift store?

Starting a thrift store requires several legal considerations to comply with federal, state, and regional rules & regulations. Try to include the key legal considerations:

• Choose a business structure
• Get business licenses and permits
• Business Insurance
• Employment & zoning laws
• Tax obligations

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

Plan your business in the shortest time possible

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Popular Templates

Create a great Business Plan with great price.

• 400+ Business plan templates & examples
• AI Assistance & step by step guidance
• 4.8 Star rating on Trustpilot

Streamline your business planning process with Upmetrics .

• Business Plan for Investors
• Bank/SBA Business Plan
• Operational/Strategic Planning Services
• L1 Visa Business Plan
• E1 Treaty Trader Visa Business Plan
• E2 Treaty Investor Visa Business Plan
• EB-1 Business Plan
• EB-2 NIW Business Plan
• EB-5 Business Plan
• Innovator Founder Visa Business Plan
• Start-Up Visa Business Plan
• Expansion Worker Visa Business Plan
• Manitoba MPNP Visa Business Plan
• Nova Scotia NSNP Visa Business Plan
• British Columbia BC PNP Visa Business Plan
• Self-Employed Visa Business Plan
• OINP Entrepreneur Stream Business Plan
• LMIA Owner Operator Business Plan
• ICT Work Permit Business Plan
• LMIA Mobility Program – C11 Entrepreneur Business Plan
• USMCA (ex-NAFTA) Business Plan
• Franchise Business Plan
• Landlord business plan
• Nonprofit Start-Up Business Plan
• USDA Business Plan
• Cannabis business plan
• Ecommerce business plan
• Online boutique business plan
• Mobile application business plan
• Daycare business plan
• Restaurant business plan
• Food delivery business plan
• Real estate business plan
• Business Continuity Plan
• Pitch Deck Consulting Services
• Financial Due Diligence Services
• ICO whitepaper
• ICO consulting services
• Confidential Information Memorandum
• Private Placement Memorandum
• Feasibility study
• Fractional CFO
• How it works
• Business Plan Examples

Thrift Store Business Plan Sample

AUG.23, 2018

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:

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.

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.

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

6.4 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.

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.

 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.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

The following column diagram shows the 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.

Add comment

E-mail is already registered on the site. Please use the Login form or enter another .

You entered an incorrect username or password

Comments (0)

mentioned in the press:

Search the site:

OGScapital website is not supported for your current browser. Please use:

Designed by InstaQuaint

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.

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?

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.

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!

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!

At Knallerfalke.com we write about everything that has to do with making money on the Internet.

Whether it's reselling, FBA, or investing, every article we write begins with detailed, unbiased research. We help our readers make buying decisions and always recommend products that we as editors stand behind. Since practical relevance is particularly important to us, our editors incorporate their own experiences.

A selection of our topics:

Amazon|FBA Comparisons Dumpster Diving Ebay Ebay|Reselling Goodwill Legal Lego Mercari Poshmark Reselling Sneaker

As an Amazon partner, we earn money on qualified sales that you make via links to Amazon on our website. The price for you remains the same, but you support this project. ❤️

© Knallerfalke

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Start a Clothing Line: The Ultimate 12-Step Guide

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Maybe you’ve been sketching designs since you were a kid, have been making your own award-winning Halloween costumes for decades, and have already sold out of the custom T-shirts you’re making out of your garage. Or maybe you’re just intensely entrepreneurial (and obsessed with style) and want a piece of the trillion-plus dollars floating around the retail industry. Regardless of your drive, knowing how to start a clothing line is very different from just wanting to start a clothing line.

Luckily, many scrappy clothing entrepreneurs before you have launched their lines to great success, and they’re willing to share their tips with you.

We’ve interviewed a few of those business owners to put together this guide on how to start your own clothing line, from product idea generation to funding your business through a small-business loan (and some words of much-needed wisdom to power you through your pursuit).

How to start a clothing line

With the competition, complexities and even intimidation associated with the fashion industry, you may be concerned that as an entrepreneur with no experience, you won't be able to start our own clothing line.

When it comes down to it, however, unlike, say, becoming a doctor, starting a clothing line doesn’t necessarily require special training or a degree. In fact, most of the designers we spoke with had no formal experience in the fashion industry before starting their businesses.

That said, you do need to completely dedicate your time and energy into launching your clothing brand.

Bianca Dabney is the founder of BIDA, a sustainable, minimalistic streetwear line. Her modeling and acting career instilled in her a love for the fashion industry and an understanding of how garments are presented and marketed. Still, she says:

"The most challenging part of starting my own business was actually gaining the confidence and self-assurance that I could and should start it."

Like many of us, Dabney knew college was the clear path laid out before her. "I was raised thinking that going to school and working a corporate job was really the only option, and I was nervous to finally let go of that mentality and see that there were other paths," she says.

She founded her business without any formal training and used her experiences working as an actress and model in the industry instead:

"I’m also a self-taught designer, so finding the resources to create the brand was rewarding yet challenging. Self-motivation, determination and my passion helped me to become an expert in my field."

Like Dabney, you might find that the hardest part of the process, at least psychologically, is committing yourself to actually starting your clothing line. But if you understand that the process will require long hours, impeccable organizational skills and a potentially steep learning curve, you’re fully capable of teaching yourself how to do it — no fashion MFA required.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

1. Write a business plan

It’s always useful to write and implement a business plan at the start of your venture. This plan will act as a roadmap outlining how you’ll reach your goals over the next couple of years. But also know that your business plan isn’t necessarily set in stone.

“Before launching BIDA, I created a business plan that included brand, sales strategy and marketing elements,” Dabney says.

“However, I’ve had to make changes and adjustments based on my customers and the environment. Running a business is an ongoing evolution. It’s important to have a clear plan of action, but it’s equally important to be flexible and be able to adapt.”

That adaptability is especially important in the retail business, which undergoes trend changes all the time.

“It’s both a very exciting time in fashion and a very unpredictable time,” says Ariel Mehrban, founder of True Vision LA, a streetwear clothing line based in Los Angeles.

“The market is seeing new influences every day, and there are always new technologies and new ways for customers to find products. I don’t think anyone knows where it will settle, or if it will ever stabilize. All in all, I think the best strategy for a fashion startup is to stay nimble and adaptable.”

As Mehrban suggests, the constant turnover in the fashion industry can be both a blessing and a curse — and keeping up with the market might mean tweaking your original plan. But having the strong foundation of a business plan can make navigating those changes feel a lot less overwhelming.

2. Find your niche

After you've created your business plan, the next step to learning how to start a clothing line will be to find your niche in the market and in the industry.

Generally, the most successful businesses identify a problem within the market and then design a product expressly to fix that problem. This being said, you don’t necessarily need to dive too deeply into researching the market at this stage. It’s likely that an idea for a unique clothing item will reveal itself as you’re living your everyday life.

Jordan Sack is the founder and CEO of Tillinger, a technical apparel line that specializes in men’s golf-inspired shirts. The idea for his streamlined, sweat-wicking shirts arose when he was interning in Manhattan one summer after college:

“I looked forward to summer Fridays because I finally got to wear short sleeves — but that was still your typical, thick, cotton knit polo shirt. And on the weekends, I would always play golf with my friends and loved wearing the uniform of technical performance polo shirts. But you couldn't really wear those to work because they were brightly colored, heavily logoed and just plain ugly. The idea for creating my own golf shirts didn't arise as an ‘aha!’ moment, but I gradually became more and more interested in making an everyday, work-appropriate polo that had the properties of your typical golf shirt.”

Here’s another approach: If you’re intent upon designing something but you don’t quite know what that “something” is, start by identifying the audience you’d be passionate about serving — whether that’s your peers or a demographic that’s currently underserved in mainstream retail — and think about what they need from their clothing.

For example, Sherri Dombi is the founder of Bee Yourself Apparel, an adaptive clothing line whose design features allow elderly folks to easily dress themselves.

“First you need to have a passion for what you are doing,” Dombi says. “Mine was helping a friend’s dad dress like he used to but allow him to dress independently.”

3. Understand your market

Once you’ve hit upon your business idea, now you need to truly understand the consumer you’re designing for. Your designs, fabric choices, sourcing and production budget and retail outlets all have to cater to your target demographic’s spending behaviors, lifestyle and aesthetic preferences — so don’t get started on any of the above before diving deep into understanding your base.

Part of that research should involve competitor research: studying the companies whose product, marketing and branding strategies you admire, and whose target demographics you share.

“The first step is really to just absorb information,” says Mehrban.

“You need to learn everything that your would-be competitors already know. Part of that time should be spent studying how they are engaging with their customers. What is the value they are offering their customers? It’s usually something much deeper than the garments themselves.

Luckily, this research doesn’t necessarily need to involve special skills or resources: If you have an internet connection and social media profiles, you can garner valuable information about your customers and how to design toward and market your product to them.

“The great thing about our time is that we have access to almost the entire world with social media and various web-based platforms,” says Mehrban.

“If you’re passionate about design, chances are you have a product that people will appreciate. The tough part is finding those people. I don’t subscribe to the ‘build it and they will come’ myth. The short answer? Scour the web. Find the areas that your customers frequent and get your product in front of them.”

Dabney echoes the value of using social media and basic analytic tools to define your audience’s behaviors and needs:

“To pin down my target demographic and their spending behaviors, I executed a pre-launch campaign, which I then analyzed through Google Analytics. Online marketing, such as Facebook and Instagram ads, allows for target demographic analysis, too.”

In addition to their aesthetic preferences and lifestyle, you’ll want to understand how and where your audience spends on clothing, too. That way, you can plan whether to open a brick-and-mortar store, sell on an e-commerce platform, or both. Even if that physical location is a two- or three-year goal, incorporate plans for its launch in your initial business plan.

» MORE: How to start an online boutique

4. Register your clothing business

Now that you've done the necessary background research about your product, target demographic and even startup costs, you'll want to take care of the appropriate paperwork before diving into the actual production of your clothing line.

To this end, there are a handful of tasks you'll want to accomplish:

Choose a business entity type: First, you'll want to select your business entity type — sole proprietorship, LLC, S corp, etc. There are pros and cons to every type, so you'll want to think about which best suits your plans and goals. If you're planning on starting small, you might opt for a sole proprietorship and then create an LLC or corporation at a later time.

Register your business: Depending on the entity type you choose, you may have to officially register your business with the state where you'll be operating. Even if you're not required to register with the state, you might decide to file a DBA, or doing business as, to officially register your chosen business name.

Get business licenses and permits: At the very least, you'll likely need a general business operating license to officially start your clothing line business. If you're going to be operating from your home and starting your clothing line online, you may need specific permits — like a sales tax license and home occupation permit — as well. You'll want to consult your state and local governing agency to ensure that you have all of the proper licenses and permits.

Get an employer identification number: Part of starting a clothing line, or any business for that matter, is registering for and paying business taxes. Therefore, you'll want to apply for an EIN with the IRS. Although an EIN isn't required for all businesses, getting one can help you file your taxes, open a business bank account, as well as access business financing.

» MORE: What you need to open a business bank account

5. Design and source the clothes for your line

After you've gone through all of the steps necessary to make your business official, it's time to get into the meat of learning how to start a clothing line: designing your clothing and sourcing your material.

This can be the most challenging part of the process for many entrepreneurs starting a clothing line, especially those who haven’t worked in the fashion industry before. Here’s how the designers we interviewed went about the process.

Finding the right materials

You might have a clear idea of what kinds of materials you want to create your products with, or you might need to do some exploring first.

Before formulating his polo shirts’ polyester-and-lycra blend, Tillinger’s Jordan Sack conducted his own, self-directed research into the production process:

“I bought a lot of competitor golf shirts and studied the materials they used. Then, I reached out to old friends who worked in the industry and bought them dinner in exchange for their time. It was a lot of serendipitous moments all coming together. One friend led me to a pattern maker, who led me to a grader/marker who knew a cutter. The friend also had a connection to a sample factory in the Garment District. It was pretty scrappy. There's not an easy-to-follow online tutorial. You just have to be resourceful.”

And then, of course, there’s the cost question. A major challenge every designer will face is reconciling the cost and the quality of your materials, though Mehrban says that this decision will be highly individual to every designer’s budget and values.

For their part, Mehrban says, “We’ve found that compromising on quality just doesn’t work. Cost-cutting is an important part of any business model, but we don’t ever work with inferior manufacturers or materials. If we can find something better, that’s what we’ll use.”

Erum Ilyas, the founder of AmberNoon, also decided to leave extra room in her budget to ensure that she was manufacturing her clothing with the most effective textiles available and, as a result, pricing her clothing higher than expected.

That was especially important because AmberNoon’s unique value proposition depends on the quality of its sun-protective materials — Ilyas is a board-certified dermatologist who has run her own practice for a decade. Despite comprehensive public knowledge about skin cancer prevention, it’s still the most common type of cancer today. That inspired her to launch her line of sun-protective clothing that women can wear every day.

“Given the quality of the textiles, the design elements and low minimum order quantities I started with, I do have a higher price point than I would like long term,” Ilyas says. “After all, I want to make sure anyone can access this amazing product for their benefit.”

Depending on your particular goals and mission for your clothing line, you might also find that it’s worth sacrificing your target price-point in favor of lasting, quality materials. When you’re first rolling out your line, you especially want your product to impress your consumer as the best quality product possible.

6. Partner with a manufacturer

Finding the right manufacturer to produce your clothing is crucial to bringing your vision and goal for your brand to life. After all, if you don’t have a reliable manufacturer, your clothing line can’t exist at all.

“You can have a great idea, great concept — covered all of your bases,” says Ilyas. “But if your manufacturer can’t produce to your specifications, and maintain the quality and stay true to your concept, then your message is just lost.”

When seeking a manufacturer, consider factors like your manufacturer’s minimum order quantity, cost, quality and trustworthiness. You might also want to find a manufacturer with in-house pattern makers to streamline your processes.

“The manufacturer I’ve partnered with is a local Bali factory, which specializes in knit and stretch production,” Dabney says. “The factory provides services in development, pattern making and production, so all the elements are under one roof, which is important for quality control.”

To cut down on costs and to maintain your product's affordability, you might consider exporting your manufacturing processes overseas, as Dabney did. Whether you produce your clothing domestically or abroad, it’s worth taking a hands-on approach to searching for your materials and manufacturers.

“There was plenty of trial and error, and we did lose a decent amount of money trying to find the right partners,” Mehrban says about tracking down the right manufacturers to produce True Vision LA’s clothes.

“It’s very hard to tell how a garment will fit, or to guess the hand feel based on a picture. We made the mistake of relying on photo representations before placing wholesale orders initially, and it cost us. One thing I’ve found is that the integrity of the product tends to match the integrity level of the manufacturer, and when that’s missing, you run into problems. It’s very important to work with partners that have the same ideals as you do.”

And don’t feel pressured to produce a full, 10-plus clothing line right from the start, especially if you’re feeling the strain on your budget (or your sanity) — Donna Karan, for one, built her eponymous label off her now-classic “Seven Easy Pieces” collection. So, start by perfecting just a few items, gauge how your market responds, and build up your brand from there.

7. Price your products

To this end, before you can actually launch your clothing line, you'll need to price your products. Once you've found your materials and manufacture, you'll have a better sense of how much it costs to start your clothing line, and therefore, you can price your items accordingly.

With your pricing, you'll want to strike a balance between making a profit and setting a price that customers are willing to pay. This being said, your market research will come into play with pricing — you already should have a sense of who your demographic is, what their spending habits look like and how much they'd be willing to spend on your items.

Of course, you're not married to any initial pricing you choose — just like the items you decide to create, you can always decide to edit or change your pricing as you launch your clothing line.

8. Decide where to sell your clothing line

After you've created your clothing line and decided on a pricing strategy, you're ready to actually start selling. However, before you can launch your line, you need to determine where you're going to be selling.

As we mentioned above, this is something you should have thought about as part of your business plan and research — and now it's time to execute.

Therefore, if you think that starting your clothing online is the best avenue, you'll want to set up the platform to launch your products and your brand. You'll likely want to start by creating your own e-commerce website, as well as social media accounts.

Once you've launched your clothing line, you might decide to diversify your sales channels by actually selling your clothing through your social media channels, or even joining a marketplace like Amazon, eBay or Etsy .

Overall, selling your clothing line online will be much more affordable and manageable than creating your own brick-and-mortar store. Again, if you find success selling online, you might later decide to launch a physical location, or even consider selling your line to larger resellers, like department stores.

In any case, when you first start online, you'll want to choose an e-commerce platform to create and manage your store. You'll want to look for platforms with creative templates — as the design of your online store will be important to customers and to your brand.

You'll also want to look for platforms that can accommodate product variations — in other words, the same piece in multiple sizes or colors — so that you can list your clothing line the way you want. To this end, some top platforms you might consider are Shopify, BigCommerce or WooCommerce.

9. Market your clothing line

After you've set up where you're going to sell your clothing line — whether your own online store, a marketplace or somewhere else, you'll need to actually get eyes on your products.

To this end, without a plan to publicize your product, all the work you’ve done tracking down your producers will be for naught. And if you’re not a natural marketer, know that this is a skill you’ll need to nail in order to keep your clothing line’s doors open (either physically or digitally) — as Mehrban says, “Building a fashion startup is four parts sales and marketing to one part design.”

You don’t need a huge marketing budget or even previous business marketing experience to effectively spotlight your brand; in fact, many entrepreneurs simply use their (free) social media accounts as their main marketing channels. Other than their low cost, platforms like Instagram and Facebook allow for greater transparency and connection with your customer base, which modern consumers value.

“From the very beginning of the process, I did my best to document my journey of starting a company,” Sack says. “That was pretty much my content strategy. I didn't have this huge, creative marketing department. If I was going to pick out buttons, I would take a picture and put it up on Instagram and share that button story for the day.”

Beyond leveraging social media, there are tons of free marketing ideas you can implement to disseminate your brand. The key is consistency and cohesion; ensure that every piece of marketing material or campaign aligns with your brand’s voice, aesthetic, and goals. A disjointed branding strategy is confusing for your customer base, which doesn’t bode well for loyalty — which is key for turning leads into sales over the long term.

Also know that, even if you’ve started your clothing line with a clear understanding of how to market to your customers, customers are fickle. So don’t stop communicating with your customers once your initial research is through. Pay special attention to their aesthetic and buying preferences and adapt your marketing materials and product to suit.

“We started out with a clear vision of the design and branding,” says Mehrban.

“We knew we wanted to sell ‘highly wearable’ clothing, or others may call staples. The challenge was — and in my opinion will forever be — finding what motivates customers to buy. All brands grapple with motivating customers, and it’s something that never ends, even for the most established brands. Once you’ve discovered your segments, you’ll have to continue researching them. Their motivations will change with time, and even the demographics of those segments may change. What worked last season won’t necessarily work this season. The brands that survive are the ones prepared to adapt to highly volatile environment.”

10. Work with an expert

Although your clothing line idea may have been purely your own, you can’t be expected to fully launch your business without some help here and there. This is especially true if you don’t have experience in the fashion industry. Tapping an expert or a community of fellow fashion entrepreneurs may spell the difference between the success and failure of your startup.

Marianna Sachse is the founder of Jackalo, a line of durable and sustainable children’s wear. She didn’t have any design experience, but hiring a consultant and joining StartUp Fashion, an online community of independent designers, armed her with the information and support she needed to get her company off the ground:

“For new designers, I'd highly recommend surrounding yourself with experts. I found a consultant who had worked with majorly successful brands through a design friend, and I did an intensive four-week jumpstart program to get a sense of the competition and what my brand positioning would be. And StartUp Fashion helped me ensure that I had all the materials I needed to effectively communicate with factories, and connected me with a community of fashion entrepreneurs who are a fabulous resource.”

However, don’t simply settle for a mentor just because they have extensive experience in the industry. As is the case with any other individual you let in on an important aspect of your life — whether it’s your significant other, your business lawyer or your business mentor — do a gut check before heeding your consultant’s advice.

“If you don't have a willing friend in the industry who can help,” says Sack, “I'd recommend a consultant, but it’s super important to be able to trust him or her. I've made that mistake. Go with your gut. If it doesn't feel right, it isn't.”

Sachse, too, warns that some consultants claim to be more experienced than they truly are. You’ll find the most trustworthy consultants via word-of-mouth, so start your search by scouring your network (LinkedIn is a great resource for this).

11. Figure out how to manage your finances

You took the first step to managing your finances when you registered your business for an EIN. However, as you've launched your clothing line and started actually getting into the day-to-day of running a business, there are a few other steps that are essential to properly managing your finances and setting up your business for success.

This being said, you'll want to consider the following:

Open a business bank account: Even if you started your clothing line as a sole proprietor, having a dedicated business checking account is important. Opening an account specific to your business will help you separate your business and personal finances — saving you from potential bookkeeping, tax and legal headaches in the future. Plus, like applying for an EIN, having a business bank account will help you when you apply for financing for your clothing business.

Get a business credit card: With all of the startup costs associated with starting a clothing line, a business credit card can be particularly useful — not only as a way to finance your operations, but also to help you start building credit, as well as benefiting from any rewards the card offers. For a credit card that can immediately put money back into your business, you'll want to consider the best cash-back business credit cards.

Set up your accounting: In order to manage your suppliers, manufactures, sales and any costs associated with starting your clothing line, you'll want to set up an accounting system to manage everything in one place. There are a variety of accounting software options on the market.

12. Get funding for your clothing line

Getting your finances situated will help you with the final step in this how to start a clothing line guide — finding financing.

Like most entrepreneurs in any industry, the clothing designers we interviewed mostly bootstrapped , or self-financed, their ventures, using a combination of their own savings and contributions from friends and family. That makes sense, as securing a business loan as a very young startup — without the necessary evidence of a financial track history to show your lenders — can be very difficult.

Other than bootstrapping, there are a few other options for financing a startup you can explore to help you launch your clothing line. Crowdfunding can be a surprisingly lucrative way to raise funds at the very start of your venture; plus, crowdfunding can double as a method of vetting your market and gauging customer interest in your product.

It’s unlikely that you can fund 100% of your operational costs purely through Kickstarter, Indiegogo or a similar platform. You might also consider seeking equity financing, such as an angel investor or even a private equity firm.

These investors will contribute large amounts of cash to help promising startups get off the ground, in exchange for a stake in the business. But only approach private investors if you’re okay with sacrificing a portion of your business’s control.

Frequently asked questions

1. how much does it cost to start a clothing line.

Startup costs can vary greatly across different clothing lines, but in general, a small-sized clothing line will need a minimum of $500 to get started, a medium-sized line should have between $1,000 to $5,000 for startup costs and a large line will need approximately $25,000 to $50,000 upfront.

Before you start planning your clothing line, you'll want to estimate and anticipate startup costs like:

Manufacturing costs.

Product sourcing and material costs.

Designing and delivery costs.

Website and marketing costs (which may include product photography).

Distribution costs.

2. How much do clothing lines make a year?

The national average earnings for clothing line owners is approximately $51,000 per year. Clothing line profits can average between $23,751 and $140,935, depending on your location, line specifics, expenses, marketing efforts and company size.

3. Do you need to trademark a clothing line?

Although you do not have to legally trademark your clothing line, it is highly recommended. Trademarking your brand(s) can protect your creative work and products.

4. How do you source material for a clothing line?

You can choose to source your clothing line materials online via e-commerce fabric suppliers or in-person from a brick-and-mortar retailer. While online stores might offer more affordable prices or bulk discounts, visiting a store in-person will allow you to see, feel and fully experience the fabric before you commit.

Start Your Dream Business

The bottom line

Across the board, the entrepreneurs we interviewed said that patience, adaptability and dedication are crucial traits for learning how to start and run your own clothing line.

Whether you have experience starting your own small business or not, expect to overcome serious learning curves. Starting a clothing line from scratch isn’t always a walk in the park and it involves different challenges than other small businesses.

But if you’re unrelenting in your dedication, you’ll find no better satisfaction than seeing your customers live their lives in your creations — and doing it on your own terms.

“The most rewarding part of starting my own business is that I get to work with clothes I’m obsessed with every single day," Dabney says. "On top of that, I have the freedom to run my business how I like, so I know what I’m doing is a direct reflection of my vision. After starting my own business, I really can relate to the quote, ‘Choose a job you love, and you will never have to work a day in your life.’”

On a similar note...