© Copyright 2013-2022, Jeff Napier
Table of Contents
Dealing with secondhand clothing is rewarding in many ways. First, you are treading a light footprint on the earth. You are eliminating the need for the manufacturing and transportation of new clothing, with its attendant energy waste and pollution. This also eliminates the waste of disposing of clothes that still have life left in them. The other side of the coin is that you are helping people who couldn’t otherwise afford to put themselves and their children in good clothes, and dress fashionably.
Most of these business ideas can be started with little or no money, time or experience. Some are great partnership opportunities, so you can get your friends, your family, your church or group involved in the fun and profit.
The profit can be what you want. You can just dabble, making some rainy day money, or build a business into a clothing empire. These are not get-rich-quick schemes. They are get-rich-slow schemes.
Just to give you an example, one business I started was a clothing exchange, which I’ll explain in full detail later in this book. I made a profit while giving away free clothing. I was especially happy when low-income parents came in and got literally boxes of clothing for all their children and themselves, and didn’t have to pay a cent. I remember one woman drove up in a beat-up 1970s station wagon with a broken exhaust system, and running on 7 of its 8 cylinders. She and her four children came in, and picked out their own full wardrobes. They left without having to pay one cent, which I doubt they had anyway. That month, and every month, I gave away $44,000 in free clothing, and made $5,000 for myself in the process. I only ran the business for four months because I’m a business writer, not a ‘clothing exchange guy,’ but I did have fun while the experiment lasted. There is room for at least one free clothing exchange in every community in the world.
If that doesn’t float your boat, read on, because I’ll talk about all sorts of creative ideas from custom tailoring to eBay sales. You may want to read the book in sequence, even if some of these ideas aren’t for you, because in each section, you will find many useful and effective business tips you can use in whatever business you take up.
You may want to use these ideas directly, or use bits and pieces in a business of your own invention.
Have fun & prosper! – Jeff Napier
In just about every city and large town, on any weekend when the weather is good, you can visit a half-dozen or more garage sales. At most of these sales, you’ll find clothing. Sometimes it is overpriced or in bad condition. Surprisingly often, it is in fine condition, at remarkably good prices. You can buy T-shirts for as little as 25 cents. A bridesmaid’s dress for $5. A pair of shoes that originally sold for $90 might be $2. A pair of men’s slacks might set you back a dollar.
Imagine what would happen if you went to six garage sales every weekend and picked up whatever you felt you could sell for more? On average, you’d probably fill the back seat of your car with good things. What if you went to a big city and hit all the garage sales on Friday, Saturday and Sunday?
Once you get these clothes there are many ways to sell them ranging from simply bringing the whole bunch to a consignment store, to selling each individual item on eBay. We’ll talk about all sorts of ways to sell clothes later on.
If you have no experience with clothes, you can start by just grabbing things that you find attractive. If you are a man, you might specialize in men’s clothing. A woman might go with women’s clothing, of course. It helps to buy what you know.
Here are some guidelines:
In almost every case, a bit of clothing that is stained or damaged is worth almost nothing, unless you can repair it. Look for blown seams at the stress areas such as at the tops of shoulders and under the arms. Look for stains, even very faint ones in all the usual spill locations. This would be top of thighs, and at the cuffs of pants, and the fronts and shoulders of shirts. Also look for stains and tears everywhere else, time permitting.
Children’s clothing sells like wildfire, but for quite a bit less money than equivalent adult clothes.
Small and medium sizes sell quite a bit more quickly than the very large sizes, but you can make more money in large sizes, because the people who need large sizes have trouble finding a good selection at reasonable prices.
So, a pair of women’s size 9 shoes will sell quickly for a small amount of money. A pair of woman’s size 13 shoes may take a while, but when a woman who needs them comes along, she’ll pay twice as much as the size 9 woman would.
Vintage clothing can be a goldmine, but it is somewhat like large clothing. If it is only mildly different than run-of-the-mill modern clothing, it will take a while to sell. Really cool stuff, the things that can be a fashion statement when worn by someone who knows what they are doing, can sell quickly, for a lot, especially if you put it in the right market, such as eBay.
Items that can be used as costuming can have a lot of value, especially things that clearly represent a bygone era, such as a ruffled blouse with a pinched waist, or a bowler hat.
Knows About Costuming!
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(on devices that support it).
Secondhand clothing is a good investment. That’s because there is a huge gap between what some people will sell an item for, and what others will pay. A good rule of thumb when shopping at a garage sale or elsewhere, is to pay one-fourth or less of the price you think you can get.
During the week, when you have time to look things up, you can use eBay as a guide. With an eBay membership, which is free and easy to set up, you can look at listings that have closed during the past 30 days. You’ll see items that didn’t sell marked with prices in red. They didn’t sell because the time expired with no bids, or because the seller deleted the listing. Items that did sell have their prices printed in green. You can click on the specific items to drill in and find out about condition, size, and exact details.
Let’s say you have purchased a pair of men’s leather gloves. On eBay, you can type the brand name and ‘men’s leather gloves’ in the search field at the top of practically any eBay page. On the left, you can narrow down the search. Near the bottom of the things you can do at the left is “More Refinements.” Click that, then select “Show Only” and finally “Completed Listings.”
You can now go through the list, and see whether many people listed similar gloves and they didn’t sell (lots of red prices), whether a few just like yours sold for just a few dollars, or whether lots sold for many dollars.
There are variables that you’ll learn to read between the lines with experience. For instance, if men’s leather gloves of type you have are rare, there may have been only a few pairs sold because few were listed. You may find, on the other hand, that they are way too common, and perhaps you shouldn’t have bought them. Oh well, that’s a lesson. Hopefully, not an expensive one, because you only spent $1 or less, right?
That’s probably the most important rule in buying: Don’t spend much. Spend almost nothing, unless you know absolutely that a thing will sell.
At the beginning, you can afford to run a lot of experiments if things don’t cost much. Five dollars can buy you 20 experiments!
If you come to a garage sale, and everything is nice quality, but pricey, and you don’t have experience, just skip on ahead to the next garage sale, where you can get things for under a dollar.
As the day progresses, the variety goes down, but so do the prices. At the end of the day, or the end of the weekend, people will sell whole boxes full of clothing for $1, just so they have less to clean up or move.
If your are shopping in the off season, or are in a small town, there may be only a few garage sales. In that case, you can afford to take your time. If you have a smartphone, you can download the free eBay software, and check prices on the spot. Amazon has similar free smartphone software. This way, you can see if the Tommy Hilfinger item is really worth what you think it is, or not. More than once, my guesses have been off by a factor of ten.
If you are in the high season in a big community, it is very profitable to organize your garage sale approach. The day before you go to the sales, you can check the listings on Craigslist if it services your area, and your local newspaper classified ads.
Some sales should be disregarded out of hand, so you don’t waste your time driving to sales where there won’t be anything you want.
Those that remain, you can mark on a map, arranging a schedule so that you hit the ones that open early and are likely to have the best clothing first, and in such a way, that you’re driving a sensible circuit, not just criss-crossing all over town. Having GPS is very helpful when garage sale shopping.
On busy weekends, you want to shop as efficiently as possible. With experience, you’ll learn not to wait to ask a price of an item on which you’ll only make $5 or $10, but to move on to other, more lucrative sales.
When you come across a large collection of clothing on which you can make money, rather than negotiating it piece by piece, you might offer to buy the entire collection. You’ll be amazed how little people are sometimes willing to accept. They’re just happy to get rid of it because they’re moving, or they don’t want to shlep it back up into the attic. Sometimes, they’ll be insulted if you offer what they consider a too-low price.
I have learned to say something like, “Feel free to turn this offer down, because I know these boxes of clothing are worth more, but would you accept $20 for the whole lot?”
There’s no insult there, and they know it. More often than not, they’ll say, “sure!”
If you have purchased a large lot of clothing, you might want to pay for it but leave it with the seller, and pick it up in the evening when you are less busy. Most sellers can be trusted, if you ask them to set it all aside so no one can look through it since you’ve bought it. I’ve done this hundreds of times, and only once that I recall did a seller accidentally sell something I had already purchased. On two occasions, however, I forgot to note the address, and couldn’t find the things I bought.
Professional shoppers can go into a thrift store with a $20 bill, and come out with $200 worth of clothing.
You may have to be experienced however, because there may be other professional buyers in competition with you. But even in big cities where thrift stores may be few and far between, these professional buyers will overlook things. That’s because everyone specializes. For instance, if you are mother, and your kids are 5 to 9 years old, your eye naturally goes to children’s clothing of about the size for your kids. You won’t notice a set of Air Jordan’s on the shelf. Or maybe, you’re a sports-oriented man. Of course you’ll see the basketball shoes right away. But what are the chances you’d pay any attention to a prom dress? You may even develop into your specialty. You might do regular rounds of all the thrift stores looking only for men’s shoes. That will become your thing, and in time, you’ll know exactly what everything is worth, and what sells quickly, and what sells slowly. A hundred women looking for evening gowns won’t bother you a bit.
Or maybe, you’re in charge of the clothing for your local theater group. You’ll have an eye for items from the 1950s if you just outfitted a play based in the 1950s. There is quite a market for that kind of clothing, yet most people don’t know how to spot it.
Along with thrift stores are flea markets, monthly church bazaars, and so on. It doesn’t take long to figure out where all the great clothing deals are in your community.
If you are lucky, you might have something like Bargain Barn in your town. Many large towns and cities have these. It is a last stop for clothing before it ends up at the landfill. These are places run by the thrift store chains where they send the clothing that didn’t sell after a month or two in all their various thrift stores. They bundle it up and send it to the super thrift store, where clothing is often sold by the pound or by the full grocery bag for anywhere from 75 cents to a couple of dollars. You’ll rub shoulders with lots of professional buyers at these places, and they pick through the clothing quickly and roughly. Don’t expect anything to be on racks or neatly folded. It is about going through piles on tables or in bins, barrels or carboys, throwing things over your shoulders that others may want, and making your own piles of things that fit your specialty.
I knew a woman who shopped at only one place, generally twice a week. It was “Bargain Barn” in Santa Cruz, California. She’d take the stuff home, sort through it, enjoy it, maybe try an item or two on, wash a few things, maybe iron one or two. She might even keep one for herself, taking something else out of her closet to make space. Then she sold her items through two consignment stores. That’s all she did to earn her living.
You can buy things on eBay. It might not be the best way to buy things for yourself unless you are not fussy about size, because sizes can end up being incorrect for you. But if you’re buying to resell, size doesn’t matter. Someone will come along who needs whatever sizes you get. Many non-professional eBay buyers are reluctant to buy things that might not fit, leaving a smaller market, naturally depressing prices in your favor. On the other hand, there are zillions of professional buyers on eBay looking to snap up anything that they can make a profit on.
If you know what you are doing, if you specialize in one type of clothing, you can learn to find the deals on eBay that are right for your market, and snap them up yourself. The usual rules of buying clothing apply. You don’t want anything stained, ripped, missing pieces, or otherwise damaged, unless you can fix it. You may have to pay a shipping charge, which adds to the cost. In general, you won’t get the huge markup that you get a garage sales and sometimes at thrift stores. But sometimes, you’ll find an item that the seller didn’t understand, or something that’s listed incorrectly.
People sell on eBay in one of two ways. Auction, and Buy-It-Now. Auction-style listings are just what you’d think: People list an item for one, three, five, seven or ten days starting at a low price. Buyers bid, and the one willing to pay the most for an item gets it. The seller has the option to start the bidding at any price. If too high, no one bids. Lots of items end up this way. You can bid on an item at any time, offering the most you are willing to pay. If no one bids more, in the end, you win, and it is shipped to you. Interestingly, you may get the item for less than you bid. Your winning payment is only the next increment higher than the next highest bid. Increments are usually one dollar.
So, you may find a belt with a great turquoise and silver buckle on eBay and the current price is $6. You might be willing to pay up to $20, so you bid $20. But, when the auction ends, perhaps the second highest bidder was only willing to pay $10. So, you get it for $11.
With Buy-It-Now listings, also known as fixed-price listings, the seller states a specific price. As soon as anyone decides they’d like to pay that price, they buy it, and the listing ends. In the case of the belt with the turquoise buckle, the seller could have listed it as Buy-It-Now at $18. If you felt that was a sufficient deal, you just click the Buy button, and it’s yours.
Payment is most often handled through a company owned by eBay called PayPal. Through millions of transactions, it has proven to be safe, fast, reliable. A PayPal membership is free. When you pay, the money is taken from your checking account, debit or credit card, or cash that you have deposited with PayPal – your choice. There are also a couple of credit options available through PayPal for those who qualify.
You might wonder about the reliability of people selling on eBay. Someone could advertise a solid-gold whatever, and ship a box of rocks instead, couldn’t they? Yes and no. They can. Their account won’t last long. eBay will shut them down. Now, that doesn’t help you, but fortunately, eBay and PayPal offer Buyer Protection which refunds your money if an item isn’t as advertised, or doesn’t arrive.
Furthermore, eBay has a feedback system. When you buy something on eBay, you get to offer a feedback point and a comment up to 80 characters. If all was well, you’d leave positive feedback, if not, you can leave neutral or negative feedback. Before you leave less than positive feedback, there are some other mechanisms in place to help resolve issues. You can communicate with the seller, and if that doesn’t work, you can communicate with eBay representatives. Most problems are resolved before you’d need to leave less than positive feedback.
So, before you buy, you can check the seller’s feedback and make sure that it is mostly positive. Almost no one has 100% positive feedback, but if your seller has a number of feedback points, and they are 99% or better, you can be fairly assured there’ll be no problems that can’t be resolved.
Interestingly, because of the Seller Protection, I often didn’t check a seller’s feedback. I just went ahead and bought things, and it almost always went perfectly without a hitch.
I’ll bet you’ve already figured out the best strategy for buying from auction-style listings. If you bid too soon, you may drive other buyers into a frenzy. You’ll also have to wait a long time to see whether you won the item or not. So, you might prefer to bid at the last possible moment. And that’s just what thousands of people do. In fact you can download software to bid on items automatically at the last moment for you.
Better yet, you can just sort eBay listings by end time, so the ones ending soonest will be at the top of the page. Then, when you see something that’s closing in the next few minutes for less than it’s worth, that’s what you bid on. Some remarkable deals can be had this way. Especially if you have found something that’s misspelled, or listed in the wrong category. Other buyers will have missed noticing that. I saw perfectly good items worth $30 or more close for a penny or a dollar. Sometimes even with free shipping, if the seller wasn’t paying attention to the format of the listing. This is fairly rare however, so you’d probably have to spend quite a bit of time pouring over listings that are about to end.
Getting good deals on Buy-It-Now listings is done in the opposite way. What you’re looking for are listings that were listed at a too-low price. Many others are looking for these also, so they don’t last long. Therefore, what you want to do is sort the eBay Buy-It-Now listings by time created, most recent first. I have often picked up deals literally within one minute of the time the listings were created. No doubt it is a surprise to the sellers that their items sold that quickly!
In general, you won’t get as good a deal by snapping up Buy-It-Now listings as you will for auctions that opened for a penny or a dollar and got no bids. That’s because people start Buy-It-Now listings at the price they’re actually expecting to sell their items for. But with practice, you can consistently get good deals on which you can make a profit.
Whether you focus on Buy-It-Now or Auction listings, you might want to consider common misspellings, and seek those out. For instance, Afghan is most commonly misspelled Afgan. In fact, people spell it this way 75 percent of the time. So, you might see what’s available under that spelling.
So what do you do with the stuff you can pick up on eBay? You can sell it through consignment stores, through flea markets or your own store, out of the trunk of your car, on craigslist, or maybe, if you get it just right, you can turn things right around and sell them again, for a profit, on eBay. If you like working on clothing, you can repair damaged clothing, cut down clothing, dye it, or sell bits and pieces on eBay.
Does craigslist service your area? You can put an ad in the items wanted section. Just let people know you buy clothes. You can optionally direct them to your own website where you can tell them what you don’t buy, what you do buy, and approximately how much you pay. Or, you can just post your email address or phone number, as long as you’re willing to take a number of calls that don’t pan out. But those that do, may pan out quite well. Most people won’t contact you to buy a single item. They may have a dozen, a hundred or even a thousand items for sale. These are the sellers you want. A person who has a single hat for sale would be a waste of your time, even if the hat is a good deal, due to the time the transaction will take. Also, the person selling a single item generally wants a fair bit of money for it. The person selling everything in an estate, or a closet full of items that no longer fit will often accept far less than market value.
When this happens, it helps to be professional. The first thing you have to do is make sure the clothing is acceptable. So, you do want to take as long as you need to make sure it is not torn, that shoes, gloves and so on have mates, that the items aren’t all weird sizes (unless that’s OK in your selling paradigm), that they are clean or can be cleaned, not worn-out, not torn, not moldy, and don’t smell like cigarette smoke or cat pee.
An odor is serious trouble, because most people won’t buy anything with even a faint odor. And, odor is contagious. Put that smoky smelling pair of jeans between a couple others, and they’ll all smell like smoke.
What I recommend for most bulk buying situations is to offer a single price for the whole lot. Another option is to offer a price per item. Don’t be afraid to offer a too-low price. You’d be surprised how often people will accept a remarkably low offer. Often their primary objective is not to make money, but to make space, or be rid of something that’s been bothering them. In other cases, they have a plane ticket for tomorrow. Being able to sell the stuff they can’t take for any price beats dumping it in the trash.
Sometimes people will act offended if your price is too low. Occasionally they really will be offended. That’s their business. In my opinion, they are allowed to feel and act any way they want, as long as they don’t treat you badly. Remember, your bottom line is to buy things at a low enough price that you are sure to make a profit. You don’t need to buy everything from everyone. Sometimes it is difficult to offer a small sum to someone who obviously needs the money. But if you can’t stay in business, you can’t help anyone else who wants to sell clothing.
I used to preface my offers with something like this, “What you have here is worth far more than I’m offering, but all I’m willing to pay is. . . (Then I state the price.) “You don’t have to take me up on that. I won’t be offended if you don’t, and I thank you for showing me what you have.”
This makes it very difficult for them to be offended. And, it makes it difficult for them to think back on the transaction a few days later and say you took advantage of them, because you were clear and honest right up front.
When a situation comes along that a seller asks way too little, assess the situation. He may be someone who is quite timid. She may be someone who really needs whatever money she can get. There may be an element of desperation. In those cases, you can often pay more than the asking price without making it unprofitable for yourself.
As time goes on, your craigslist ad becomes less important. Assuming you treat everyone well, people will remember you, tell their friends, and keep your business card. They’ll call or write from all corners of your community.
I heard a story about a fellow in Baltimore or Boston who was interested in books, but the idea is the same as it would be with clothing. He placed an ad on craigslist that he would pick up books from anyone who had some they wanted to get rid of. He didn’t promise anything specific. His ad didn’t say he’d donate them, or even donate a portion of his profit. He didn’t say they’d be used to fill libraries or sent to schools overseas. He didn’t address the fact that they’d be recycled. He just said he’d pick them up. And, if the story I heard is true, he picked up tons of books per month.
Whether or not your advertise that you’re buying – or just picking up – on craigslist, having a website can be a big plus, especially if you’re also selling clothes in your community. I’ll talk more about that later.
One difficulty with craigslist is that after you post, others will post, and your listing will scroll down and out of sight, especially in a large community. Craigslist will only let you delete and re-post a listing every two days.
One semi-spammy way around this is to juggle perhaps four postings, one posted every 12 hours. One for buying shoes, another for hats, another for dresses, and so on. Then, each of your postings can have a link to your website.
A much better way requires that you sell clothes locally. If you do, then you can post an ad and a picture for each piece of clothing you have for sale in the clothing section. In each ad, you mention that you also buy clothing. You can post a reasonable number of items every day and it’s not spam at all.
Where having a website really shines is in what’s called ‘second contact.’ It is difficult to create a website that people will somehow just find, and then discover that you buy clothes. But if people already know that you do, then they’ll look up your website to find your email address, or phone number and contact you.
I don’t want to discourage you entirely. Through SEO (Search Engine Optimization) you can make a website that’s effective for first contact. The trick is to have a phrase on your website that people will use when they’re looking for a place to sell clothes, and the names of all your local communities. Something like, “Sell your secondhand clothes in Medford, Grants Pass, and Rogue River.”
You put this phrase in the <title> tag of your page, and make a large title using the <H1&gh; tag. You can also put it in the body of your text and in the meta keyword and content tags. This way, someone who is googling something like, “sell my clothing in Medford” will come across your website, and unless you have a lot of competition that also knows SEO tricks in your community, your site will be the first that appears in the Google search results.
Perhaps your church or group has sponsored an occasional clothing exchange. I’m not talking about a rummage sale where you donate your unwanted clothes and they sell them to support the organization. I’m talking about an event where everyone brings their unwanted clothes, perhaps on a Saturday morning, and everyone can carry away other members’ unwanted clothes. So, you can get rid of that funky blouse someone ‘gifted’ you with and pick up a gorgeous. . .
What if this happened on a grander scale? Imagine a regular location where this free exchange of clothing went on every weekend, or even every day? Do you see where the profit is in this? Since you could be the one who organizes and maintains it, it is only fair that you get first pick on everything that comes in. If you let everyone know right up front that that’s exactly what you’re doing, they’ll all be OK with it. I can assure you of that, because I set up a business that grew nearly overnight into a large, ongoing free exchange in Marin County, California, and that’s what actually happened.
More specifically, I rented a 2,500 square-foot store, primed it with stuff I bought for next to nothing at garage sales, and opened to the public. In my exchange, I allowed exchange of anything of reasonable size (no couches or mattresses, please!) There were many books (another profit-bearing business in itself), garden tools, car parts, sports equipment, you name it. But I could have specialized in clothes. In fact, it was more than 75 percent clothes anyway.
Never once did anyone complain that I had first pick. Quite the contrary, I received complements all day long for the nature of the business.
Another thing that might surprise you is that I received much more clothing than I gave away. I actually had volunteers who took the excess to local thrift stores. There were hundreds of wealthy people who brought things to the exchange just so other less wealthy people could get them. All these donors knew full-well that I was supporting the business by picking the cream off the top.
I’m sure you can imagine what I did with the one percent or so that I picked. Right, I sold them on eBay.
I only ran this experiment in Marin for four months.
During that time, a volunteer ran some math and worked out that I gave away $44,000 per month worth of clothing. This was just wonderful for all the people who came from the poorer areas east of Marin and were able to get good clothing for their children and themselves. Even though the store was in a rather fancy suburban neighborhood, and many of the ‘shoppers’ came in junky cars and looked kind of scary to the locals, I was often told how much it was a great community service by these well-off locals.
I have been more of an experimenter than a do-the-same-profitable-thing-year-after-year person – probably to my detriment, but it could have been a huge success. Instead of closing it and moving on to the next experiment, I suppose it could have branched out, and I’d be very successful in the exchange business. But, being an experimenter and a writer, I’ll leave starting the next exchange up to you.
If I was going to do it again, there would be some things I’d have to work out first. My version started out quite large, and I had a rag-tag assortment of about 20 volunteers. Not being a great manager, I quickly lost a degree of control over these people. Some came in drunk, some complained about everything in sight, some treated the clientele crudely. So, if you do this, you’ll either want quality employees rather than volunteers, or you’ll want to screen your volunteers better, or you’ll want to have a more alpha personality. Or, perhaps the best solution, is keep it small and manageable, perhaps in a 700 – 100 square foot space.
The next problem was waste. Since I was taking everything, not just clothing, I had to rent larger and larger dumpsters to accommodate the things that weren’t worth even giving away. At the end of the fourth month, I was paying $250 per month for dumpster rental. Half of the stuff that went in these dumpsters was not clothing. But half was. You’d think people would know better, but some of the stuff that was donated was brought in damp, mildewed bags. They went right into the dumpster. Much more was stained or damaged beyond usefulness.
To not discourage people from bringing things, I decided never to decline any reasonable donations. I stand by this, and believe it’s fine to spend a bit on garbage pickup.
I had a sign on the front window that told people not to leave donations after hours. But they did. Most mornings I’d find a pick-up truck full of bags of worn-out clothing, broken lawnmowers, sofas without cushions, and so on. These were the things that people just wanted to dispose of, didn’t want to pay landfill fees, and would be too embarrassed to try donating to the store during the day.
And parking was a problem. My store became rather popular within a very short time. (Advertising and publicity is absolutely not necessary in a business that exists to give things away.) The problem was the parking lot became congested. And that, ultimately, was the downfall of my experiment. When traffic started clogging the little strip mall I was occupying, the neighboring businesses started to complain. The property manager suggested I leave. Oh, I could have worked things out, but since I was ready to move on, I just pulled the plug.
I’m not the first one who set up a store to give things away. The precedent was set in 1968 at the Digger Store in the Haight-Ashbury neighborhood of San Francisco. The Diggers were a loosely assembled group of people who started making free soup, beans, and bread, for the hippies that came to the Haight during the Summer of Love. In time, they rented a storefront in which they accepted donations and gave everything away. I did a bit of research and never found out how they paid the rent. That store, too was a short-lived experiment.
The Digger Store
You may have seen clothing donation boxes in front of stores and at street corners. Perhaps the best known are Gaia green boxes. The idea is that anyone can drop off clothing in these boxes, the clothing is then used to bring money to charities. That’s the idea. However, a quick check of “clothing donation boxes” on YouTube will let you know that quite often the money that these clothing donations generates is not used for charity at all, but for the profit of some greedy small companies.
It can be different. There’s no reason it couldn’t work as it should. Perhaps you are the person to do it. It is completely reasonable and morally correct to make some money in the process, as long as you are up-front about it. This model can have at least two benefits – in addition to your profit. One would be that you can give some of your profit to your favorite charity. Another could be what you do with the clothing you collect that you don’t sell. It can cloth the less fortunate folks in your own community, or do what the Gaia green boxes promised, but evidently didn’t deliver on: To send the clothing to third-world countries where it would be seriously appreciated.
If you can figure out how to get or make a suitable box, then starting this business is super-easy. All you need is one box to start. Then you’ve got to find a property owner who would be willing to let you set it down. Most property owners, if they have the space, would be glad to help you do something good. As I have discovered, even though you are doing it for profit, as long as your side effect helps someone, people will very willingly support you. As long as you are upfront. Trying to hide your profit motive would be a big mistake. Advertising that you are doing it for profit, and that it helps people, makes a world of difference. People like the entrepreneurial spirit, and they, too, have expenses. They understand that you have to earn a living.
Another approach is to set it up as a genuine non-profit. What, in the United States is called a 501-C3. When you get this permit from the government, you can say you are a charity, and collect donations in various forms such as clothing, but also cash if you wish. As a non-profit charity, you do have to be accountable. There is some paperwork to be filed, you have to have at least two people willing to help with oversight – typically a treasurer and president, as I recall, and you actually have to do some sort of charitable work. When you run a non-profit, you don’t just grab whatever money is left after expenses. Instead, you pay yourself a salary. If you’re starting something like a clothing business, initially with perhaps one drop-box, your salary might be $10 per year. But it could be $40,000 to $80,000, once your organization can support it. In fact, it can be much more. The people running many large charities take home six-figure incomes. I personally feel that’s fine, as long as the work they’re doing ultimately benefits people at least as much as those who donate believe it does.
OK, you know how to get secondhand clothes. Finding ways to sell them profitably is easy. You can start as simply as having garage sales. Even though you can buy clothing for as little as a dime or 25 cents, you can sell clothing for $5 and $10 each at a garage sale. The trick is having things that people want. You know the sweater you bought at a garage sale for 50 cents is worth $10 (or more), and so you just go ahead and sell it at your garage sale for $10.
One of the big mistakes people make with garage sales is not putting prices on everything. Without prices, many shoppers will just assume the price is too high. They often won’t ask. They just walk away.
If you have a mixture of clothes, some worn, faded or worse, and others that are great, people will often see the ratty clothing first, and not even look at the good stuff. So, you’ll want to avoid showing the junk clothing.
These days, craigslist is the one main place to advertise your garage sale, assuming it services your community. Second-best is to place a classified ad in your local paper. If your community allows, you can put up signs on trees and street sign poles directing people to your sale. Make the address prominent, and make the lettering big and high-contrast. When folks are driving by your signs, you want them to be seen right away. I believe it is actually dangerous to make little hard-to-read lettering on garage sale signs, because it causes drivers to focus on your sign, not on pedestrians and so on.
If parking is a problem where you live, you’ll want to work out a way to make it easy for your visitors. This could be big signs showing where and where not to park, or maybe even a volunteer in a safety vest directing traffic.
You’ll want to start your sale early. Many buyers set up a route starting at 8am. If your sale starts at 9, and you’re on their route to visit before 9, you lose out. No matter what time you start, you’ll probably have earlier visitors, hoping to find a deal before everyone else. Some people handle this by refusing to let anyone in until the exact time they have said they’ll start. Others just let people come in and buy things. I think the best approach is to have everything priced and ready to go at least an hour before your sale is to start, and let the early people come on in. They’ll ask for deals. They’ll want your $10 sweater for $8, even first thing in the morning. Best bet is probably to hold tight on your prices early, and as the afternoon approaches, lower the prices on things that didn’t sell.
Eighty percent of your visitors will come through before 11am, so plan accordingly.
A step up from garage sales is flea market selling. This has two advantages. The first is that people are coming to buy things. They come to garage sales to buy things also, but they are more focused as buyers at flea markets. The second is that you don’t have to sell everything at once. If some items don’t sell, you can simply display them next week and the week after until they do sell. At many flea markets, you can rent space in which you can store your things between weekends, so you don’t have to carry everything in, then carry everything back out at the end of the day every time.
Closely related to a flea market is a cooperative store, set up in the fashion of an antique mall. Merchants rent spaces, often as small as 60 square feet, for reasonable amounts of money, such as $100 month. As a merchant, you display your things in your space, but you don’t have to be there all day everyday to sell your clothing. There is someone at a front counter that handles all the transactions for you, typically for a 15 percent fee. At some cooperative stores you have to ‘volunteer’ some of your time at the counter. Volunteering two days a month is common. At others, the store provides the hired help.
At a cooperative store, you don’t meet and greet the public, unless you are volunteering at the counter, so you don’t learn some things that you might otherwise learn, such as which clothing items are currently in demand. But, your time is your own. You can go out and buy more clothes. Better yet, you can set up accounts and sell at several co-op stores.
After you’ve gained some experience and made some money at garage sales, a flea market, or co-op, you’re ready to start a real retail store, if you wish.
Most people think starting a retail store is expensive, risky and difficult. As you’ll find out in this chapter, it’s really quite easy.
You will need quite a bit of inventory – clothing, to start a store. The one other thing that you will need is a bit of cash. You need to have $5,000 or $10,000 that you can risk – that you can afford to lose – even if you do it in the simplified way that I’ll recommend. Most people who follow this recipe will do fine, but there is an outside chance that you are one of those people who just isn’t balanced enough to run a business. There is a chance that something unexpected could happen, such as a forest fire taking out the entire town, including your new store, just as you have filled it with inventory.
If you don’t have enough clothing and sufficient money, there is no problem. All you need to do is run one of the other businesses in this book until you do.
To make it even easier to start a retail store, you might consider a partnership. If you are lacking something, perhaps time, experience, or money, a partner who has what you don’t have can make all the difference.
You don’t want a partner who has what you have, and lacks what you lack. That’s a recipe for disaster.
If you decide on a partnership, you’ll want to make sure every eventuality is discussed up front, and a written agreement is signed in which things like who makes decisions, how much investment (if any) is expected, and how the profit will be disbursed, is all spelled out. The most important thing in that contract should be an escape clause for each partner. What if one person gets sick? What if there is an irreconcilable conflict? What if one partner loses interest, or doesn’t participate as expected? More than one business has been ruined because there wasn’t a clean escape clause.
When you consider a partnership, remember that the profit is divided. For instance, if your business makes $40,000 in the first year, and you have a partner, then you only get to keep $20,000 as opposed to $40,000.
One way to start a store is to spend thousands of dollars for inventory, then rent a large store, spend a lot on advertising, and see what happens.
That’s not the way I recommend. What I suggest is to learn the ropes at a flea market, eventually accumulating money, and more clothes than you need for the flea market. Then, rent a small, inexpensive store. In time, as your business grows, you can move into a larger store.
Let’s talk about what kind of store you might want to start with. You want a lot of square feet for your money. But much more important is exposure.
It is very important that people in your community will be aware of your store. So, look for a place where you can put up signs that can be seen from the street. And not just any street, but one which has a lot of traffic. And not just any traffic. You don’t necessarily want a commuter route. A tourist area, or one where the traffic varies every day – or one with a whole lot of commuter traffic is best. For instance, along U.S. Highway 1, in the small coastal towns of California, they have two million cars a year going by. And it isn’t the same 20,000 people going by 100 times. It is mostly tourists.
Another kind of exposure that’s very nice is foot traffic. In a way, that’s even better, because in most areas where people walk a lot, they are already shopping. So, getting a place in a busy shopping mall is ideal.
If you are not in a mall, then it is very important to consider parking. If people can’t park, or if they have to go through antics to come into a parking lot, they won’t stop at your store.
If you are not in a mall, then signage is important. Ideally, you’ll want explosively powerful, very bright, huge signs letting people know that you have clothing for sale. The problem is that zoning ordinances seldom allow anything that isn’t tasteful enough to fit into the community. So, before you rent a store, find out from your local zoning board what you can do with signs. They’ll tell you the limits. For instance, they may tell you that you can have one square foot of signage for each linear foot of front wall, no sandwich signs, but illumination at night is OK. In most cases, whatever you put in your front windows is OK, even if it is very sign-like.
If you do have foot traffic or drive-by traffic and good parking, you don’t need to spend even a penny on advertising.
On the other hand, if you the signs on your store are not sufficient, see what free publicity you can get before spending any money on advertising. You might be surprised what you can come up with, using a bit of inventive thinking.
You can send press releases to all the newspapers, radio stations and TV stations in your area. You can also inform the websites that focus on your community. Some charge for advertising. I wouldn’t recommend spending any money there. But some sites, such as most chamber of commerce sites, are happy to provide a free listing and a link to your website.
Your website can be a simple one-page affair, or something more. For the most part, people won’t discover your store through your website. Instead, those who already want to contact you or stop in, will use your website to get your phone number, hours of operation and address.
You can make it more of a destination site by taking pictures of your most interesting clothing, and posting pictures on your site that change every few days.
I believe I said something about inventive thinking and free publicity, didn’t I? Let me tell you two quick stories about bookstores. I believe this will fire up your imagination, and you might be able to figure out something similar or even better for clothing.
One bookstore in San Francisco was sometimes criticized because it was a bit dark, especially in the deeper shelves. The owner decided to make fun of this deficiency, and so he had a “Midnight Flashlight” sale. He turned out all the lights, and handed out flashlights at the front door, opening at midnight for his one-time-only sale.
Only a hundred customers came and bought books that night, but all of San Francisco was talking about it for years afterward. Eventually, tens of thousands of people came to the store, to see if it really was that dark in there, or just to see the place with the funny sale.
Another bookstore, in cooperation with a college art department, had all the books arranged, not alphabetically, or by subject, but by color. This lasted one week. During that time, a customer would be hard-pressed to come away with a specific desired title. But they came away with books they didn’t even know they wanted. But the main thing, is that 20 years later, people are still talking about it.
If you want something more than free publicity, there’s craigslist. If it serves your area, you can place free ads. The ads scroll down as other people post ads for their clothing, and soon your ad is lost from sight. However, you can delete and re-post your ad every two days.
Better yet, you can post a whole bunch of ads for individual pieces of clothing. You might take a picture of an interesting hat at 10 am, and post an ad for that hat. Then at noon, you can post a great dress. Then at 2 pm, post an ad for a purse. You get the idea.
Taking the craigslist idea one step further, on every ad you post, you can have a link to your website, saying something like, “If this dress isn’t your size or quite the one you wanted, check out my website where you’ll find dozens of others.”
I did this with secondhand computers in Marin County, and in two months, I had 20,000 visitors to my site, brought almost entirely from my craigslist postings.
As far as paying for advertising, for a small retail business, it almost universally does not work! Phonebook ads, although expensive, used to work fairly well, but no one uses phonebooks any more. They go to the Internet.
Local newspaper advertising doesn’t work. Same thing: People look to the Internet for local news. Actually, advertising a small retail business in the local newspapers never did work well, even before the Internet.
So, I recommend that you simply don’t spend any money whatsoever on advertising. To ensure that you’ll have plenty of business anyway, make sure you rent in a location with good exposure. Then take advantage of free publicity if you have to.
When you start your first store, unless you have inherited a lot of money, you don’t want to risk your savings. Your first store can be just a few hundred square feet. You don’t need to be on Park Avenue or Rodeo Drive. Your rent can be under $1,000 per month. You don’t need a cash register at first. A desk drawer will do. You don’t need an alarm system until your store grows.
General liability insurance is something you’ll want to get as soon as you can afford it. The cost is around $500 to $700 per year. It covers you if a customer is injured in some way. Let’s say a customer pulls a belt too tight, or trips over his underwear in the changing room. You would want to help that person cover his medical bills, right? But not if it has to come out of your pocket. That’s what the insurance is for. If a lawsuit should ever happen, the insurance company will fight it with their own lawyers, and pay whatever costs come to you in the end.
In the used clothing business, a lawsuit is very unlikely. Especially, if you treat your customers well. That’s a good idea anyway. Most retail businesses start slowly, and build on reputation. People will shop with you because they like the conversation and the ambiance of the store. They’ll buy things they don’t even need just to help you out. They’ll tell all their friends and family. Especially if you go out of your way to be a good citizen.
Another good thing about this business, is that there are opportunities to practice philanthropy. For instance, when an unfortunate family’s house burns down you could give them a $100 gift certificate for clothing in your store. You don’t have to tell anyone. You don’t have to issue a press release. The recipient of the certificate is sure to tell people, and the word will get out.
I’m speaking of the retail store as if it is a one-person enterprise. That’s the way I recommend you start, unless you form a partnership.
Having employees is a huge expense, and it cuts directly into your profit. When you are small, there is no employee cost at all. If you buy a pair of shoes for $5, and sell them for $15, the $10 profit is all yours.
On the other hand, if you have an employee at $9 per hour, and the person sells only one pair of shoes during that hour, you get to keep only $1.
As your business grows, then employees become important. You might think that the bookkeeping for having an employee is difficult. In fact, it is easy to learn. There books and websites on the subject. But, easier than that, there are agencies such as ADP that do all the paperwork for you. They work out the withholding taxes, they tell you how to get Workers Comp (compensation) insurance, send you the occasional forms that need signatures, and write the checks for your employees. The cost is around $40 or $50 per pay period per employee.
There is a tendency among new retailers to hire too many people, too soon. It is far better to be a bit short-handed, until you absolutely know that if everyday, in the season and out, you need more help.
When interviewing, you’ll want to be careful not to ask questions that are discriminatory. You cannot choose to hire or not based on color, religion or anything like that. But you probably wouldn’t anyway, right?
When hiring, you want to spell out responsibilities up front. You don’t want to hire someone, and then be surprised when s/he balks at having to clean the bathroom. If you expect the bathroom to be cleaned, state it up front, before the deal is done.
If you have an employee that’s not working out well, it is best to talk early on, and in earnest, with this employee. See if you can discover underlying motivations for the behavior that’s bothering you. You’d be surprised what you’ll discover, if you have a compassionate, but totally honest conversation about problems. Usually after such conversations, both you and the employee feel better, and the problem is resolved.
If after such conversations the problem can’t be resolved, then you may need to let someone go and hire someone else. Do not cripple your business because you don’t have the heart to fire someone. In fact, letting them go is the best thing you can do for them. No one really wants to be a misfit. And, the lesson is unmistakable: Mess up, and you’ll lose your job. In the person’s next job, they may be a much better fit. They may have learned to perform better. When firing someone, state the exact reason, being careful not to mention anything that could be discriminatory. For instance, “I just can’t understand your accent” is a troublesome thing to say. On the other hand, “We are losing sales because the customers are having difficulty communicating with you,” is perfectly acceptable.
A moment ago, I was saying that it is better to be a bit short-handed than having too many employees. The one place where this really matters is at the cash register. Customers do not like to wait. Therefore, it is best to work out ways to be as efficient as you can be in handling sales transactions.
A technique I learned many years ago, but which is seldom seen in retail environments, is to juggle customers. While on person is getting out a credit card, I converse just a bit with the person behind him, while handing some merchandise to another person alongside the sales counter, and field a question from someone ten feet away. I just keep doing a few seconds of work with each of three or four people. No one feels they had to wait. Oh, it might seem a bit impolite, especially if I don’t get it just right, but people seem to think it’s quite novel, and have no problem being ‘juggled’. This is much preferable to handling the one person right in front of you, to the exclusion of everyone else, until the transaction is finished. Doing it this way, I have commonly had customers start to relate with and enjoy each other, rather than a boring quiet wait in a line.
It used to require a two or three year commitment and cost a couple hundred dollars to set up an account to take credit cards. Not any more. You can set up with PayPal, a company that was originally developed to make it easy to transfer money online. They now offer a simple and low-cost credit card solution.
In the very first weeks or months of your store, you don’t even need to take credit cards. I have run a few cash-only small businesses. Customers who had no cash, were sent to the ATM machine across the street. I almost never lost a sale.
Many retail businesses start by remodeling the retail space they’re going to occupy. I recommend doing as little of that as possible early on. If you have really good deals on clothing, people aren’t going to care whether your floor has brand new carpeting or wall-to-wall concrete. They probably won’t even notice your walls. All you need is an old desk or something for a sales counter, and some way to hold up and display the clothes. You can grow into proper store fixtures and decoration later. You can start selling items from the first day you have the keys. This isn’t necessary if it isn’t your style, but the point is you don’t need to waste rent money in preparing a grand opening. You don’t need a grand opening at all. You can just show up like a toadstool. One day, there’s an empty store. The next day, there’s a great new place to buy used clothing. You can be making money almost immediately.
The only thing you need to do is get the proper paperwork filed. There are only a handful of steps to the process. The following steps are what you do in most communities in the US. In other countries, the procedure will be similar. In almost all the offices where you do these steps, they’ll tell you exactly what to do, what the next step is, and which next office to contact.
1. Before you even rent the building, go to your local zoning department, and find out if you can conduct retail sales at that location. Also find out if they have prohibitive sign restrictions.
2. Go to your bank and get a commercial checking account. It is free.
3. Find out whether your city or county handles business licenses. A quick look on the Internet, or a couple of calls, perhaps starting with the Chamber of Commerce, will let you know which office to visit. There, you can register your business name (even if you are doing business under your own name), and get what’s called a DBA – Doing Business under Assumed Name certificate. This is also known as a business license. In most places, there is an annual fee ranging from just a few dollars, to a small percentage of your gross sales. It is typically around $150/year for a small retail business.
4. If you are not in one of the five US States that do not require sales tax – Alaska, Delaware, Montana, New Hampshire and Oregon, then you need to visit the local sales tax office (called the State Board of Equalization in California). Using a one-page form that’s very easy to fill out, they deputize you to collect sales tax. With the sales tax number, also known as a resale certificate they give you, you can contact wholesalers get their catalogs, and secret price lists, in case you want to branch out to new clothing. If you are in one of the sales tax-free states, the wholesalers typically ask for a faxed copy of your DBA. The sales tax office will give you a brochure that tells you exactly how to collect sales tax. For instance in some communities, secondhand goods are exempt. They’ll tell you the exact percentage, which ranges from 2 percent to just under 10 percent in US states, and can be as high as 25 percent (VAT – Value Added Tax) in Europe.
Typically, you set aside the amount of sales tax you collect every week or so, and deposit it into a savings account. Then, every three months, you fill a one or two-page form, and mail in a check for the sales tax.
Although rare, in some communities, there is an inventory tax. Once a year, you pay a small percentage of the value of your inventory. Your city or county office can tell you about that.
Bookkeeping is easy. You need to keep all your paperwork – receipts, licenses, and other such documents related to your business. Manilla file folders, and a plain banker’s box, that you can buy for $2 in any office supply store will do. You’ll also want to make a chart of the money that comes in, and the money that goes out. You can do this with a spreadsheet, or software on your computer. Quicken is a program that makes it super easy once you answer 20 minutes worth of questions to set it up.
Once every three months, you file a Form 1040-ES with the Federal government, and perhaps a similar form with your state government, prepaying approximately 1/4 of the amount of tax you guess that you may end up paying for the entire year. Since it is a guess when you prepay, you don’t have to be particularly accurate. If you are way low, you pay a small fine, perhaps $20, at the end of the year.
You may be surprised that by being in business (at least in the United States), rather than someone’s employee, your Social Security tax suddenly doubles. Whereas 7.15 percent was withheld from your paycheck, now, you are responsible to pay 13.3 percent. What’s up with that? Your employer paid half – the other 7.15 percent.
Once a year, you fill out a Schedule C in addition to your 1040 income tax form. This is a two-page form that’s fairly easy to fill out. If you’d like to make it even easier, you can use TurboTax, HR Block Online, or other such services to work out the details for you. These programs ask questions, you answer them, and voila, your tax forms are printed out, and you have instructions on where to sign, how much money to pay, and where to mail them.
If this sounds overwhelming to you, there is a very easy solution! Contact a bookkeeper or accountant for a lesson. In one hour, they can teach you what you need to know. Then, if you still feel overwhelmed, you can pay the professional to do everything for you.
As your business grows, you’ll want to hire employees. You need to get a special insurance, called Workers’ Compensation or “workers’ comp” that covers the possibility of someone being injured on the job. This is inexpensive in comparison to the cost of the employees. Your regular insurance agent can help you with that.
That’s it. If you get something wrong, and most people do from time to time, since people in small retail businesses are not MBAs from Harvard, the branch of the government that discovers the problem will simply mail you a letter telling you what’s wrong, and what to do about it. They may issue a fine, but these fines are manageable, like $20 or $30. They don’t want to break you after all. They support you in your business, so you’ll be able to flourish for years and years, paying them lots of tax money.
The only exception is someone who repeatedly disregards the requirements. When you hear of a business person who had a heavy fine, or even went to jail, this is always someone who flaunted disrespect for the government. You may disagree with a lot of what the government does, but if you make too big a stand, your business will suffer.
One of the easiest ways to sell clothing is through consignment stores. They exist in most communities, and look like ordinary secondhand clothing stores, so you may not have known of their existence. They don’t own their inventory. Instead, they depend on customers bringing them things to sell.
When you bring in some clothing, they check it out, and accept some or all of it. They put a code tag on each piece identifying you as the owner. When an item sells, you get all but 33% (typically) of the amount. In many consignment stores, you don’t get to set the price. They set the price using their experience with clothing and with the market. In other stores, you dictate a price for each piece.
The very nice thing about consignment stores is they bear all the expense of having a store, and they do all the work. Someone has to be there from 10 to 5 everyday, and that person isn’t you.
In some consignment stores they may entertain offers. When a customer says, “I’ll give you $10 for this $12 item,” they may phone you and see if you’ll accept the sale for $10. If so, you’ll get $6.67.
Some pay for all the items of yours that have sold monthly, some pay for what has sold whenever you show up, others pay on Tuesdays.
Some specialize, and many only accept clothing in nearly perfect condition.
They love professionals. If you start bringing more and more clothing to a store, they learn who you are, and a professional friendship develops. More and more, they trust you, and you trust them. You learn what sells and what doesn’t, so in time, nearly everything you bring them is highly profitable for them, and for you.
There is no need to do all your business with one consignment store. You can sell at as many as you can reach. You may discover that Shop X is the best place for selling shoes, and Shop Y, you get a better price for high-end clothing, and at Shop Z, they sell inexpensive articles quickly.
Thousands of people throughout the world earn good livings simply by consigning clothing.
I recently stopped in a local clothing consignment store and was shocked to discover they give back only 35 percent of what clothing brings to the consignors! Yet, their business was obviously successful. I did a bit of asking and they told me a bit more about what they do.
This conversation got me to thinking how much I’d like to start a similar store, and do things better. But, I’m a writer. So instead, I’ll tell you how to start a consignment store.
Like any big business, it is safer and less stressful to start small. How small could you start? I wonder if you could start out of your car’s back seat? Could you tell your friends and associates that you’re planning to start a consignment store, and have them seed your business with some of their clothes? At the same time, you could tell people that you have clothes in your car – or in your garage, basement, or back bedroom, and encourage them to come buy some. It could be as simple as telling George or Sally that you have a nice pair of slacks that’s just the right color, will probably fit perfectly, and is only $10. Do they want to try them on?
This way, with no money invested in a business, signs, advertising or employees, you’ve got a start on a business in which you can gain experience and grow.
You can accelerate the growth of your business by advertising on Craigslist and setting up at a flea market on weekends.
A consignment business can naturally grow faster than an ordinary retail store because the people who bring clothes to consign will most likely also buy some of the clothes you have. And, they’ll tell their friends, who could be buyers as well as consignors.
There’s no reason you couldn’t be your own good customer. As you are building the consignment business, you could buy things at thrift stores, on eBay, and elsewhere to add into your inventory.
Once you’ve gained that experience, and have a large pool of people who have consigned clothes to you, it is time to rent a building. You can see the chapter on starting your own store, if you haven’t already, for details on starting a retail business. A consignment store is just like a retail store, but with one huge advantage: You don’t have to spend money on inventory, which is usually a big cost.
Whereas the shop I visited charges a whopping 65 percent consignment fee, and that seems to work for them, I think you can charge less, and will be more successful. I’d recommend something between 30 and 50 percent.
The biggest downside to the consignment business compared to regular retail is that you have to keep careful track of all the inventory. At any given moment it might be important to know who owns a specific piece of clothing. When it comes time to pay your consignors, you want it to be a simple process.
The consignment store I visited uses their computers for all that, probably with expensive custom software. That’s not necessary, especially at first. You’ll probably want to use a computer, but you can get by with an ordinary spreadsheet program, such as Microsoft Office or Open Office, a free download created by volunteers that many say is just as good as Microsoft Office. If you don’t know anything about spreadsheets, you can hire a bookkeeper or computer person to show you the basics in an hour. It is really quite simple if you already know how to click a mouse and write email. All you need is two charts. A list of consignors with their contact information, and a list of inventory. Each consignor gets a number. Each item of clothing carries the consignor’s number. In the inventory sheet, you have a description for each piece, a price, the date it came in, and most importantly, the consignor’s number.
For each piece of clothing you need a nearly bulletproof tag of some sort. You’d be in a bit of trouble if the tag becomes separated from an item, because then you won’t know who the consignor is. You might spend a few bucks and get two or three types of tags. You might have ones that can pin securely onto shirts, pants and sweaters, and another kind that comes with a loop and can be tied onto shoes, belts and non-pinnable items.
When a new consignor comes to your store, you start by putting them on the consignors’ sheet with their unique number.
You’ll probably also want to have them sign a form for your records that informs them of how your consignment system works, and puts all the responsibility for theft, loss, damage and mix-ups on them. If something sets off the fire sprinklers in the middle of the night, you wouldn’t want to have to pay all your consignors for all their clothes. Once they sign the form, give them a copy for their records.
When a consignor brings items, for each one you accept, you immediately add a price tag with the consignor’s number, and the price. You might also give the consignor a receipt.
At the beginning, you can do the whole thing on paper, but it won’t be long before the size of your business demands a computer. With that, you can get as sophisticated as you want. For instance, in time, you can invest in software that with a single click of a button, prints checks for all your consignors every month.
At the store I recently visited their computer even told them which clothes to accept, and which not, as well as what price to set on each item of clothing. Then, they could tell the consignors, “the computer says. . .” whenever a consignor is dissatisfied with a price or what the store is willing to take for consignment.
You get to decide your policies. You can take everything consignors bring in, although you probably don’t really want to clog up your store with undesirable stuff. What you carry will dictate what kind of clientele you attract. For instance, if your consignment store is all upscale, with few items under $60, you’ll get all upscale customers. It won’t take long for the people who must shop in the lower prices to figure out your store is not worth going to – for them. You’ll make more per sale, but may have fewer sales. Or maybe not, because the upscale people may all shop at your place.
If you go too upscale, you’ll only attract customers who can easily afford to buy new clothes, and so you may have almost no customers at all. On the other side, if you go low-end, you spend a lot of time handling a lot of transactions for smaller profits per sale.
You can also decide who sets the prices. If you decide, consignors may grumble or argue. If you let them decide, you may grumble or argue. Price charts are difficult in this business, but not impossible. You could say all sweaters are $25. But some are not worth that much, and many name brand sweaters are worth far more.
You can decide whether consignors can be paid whenever they drop in, or just on Tuesdays, or you can mail checks once per month.
When your business is small and you’re running it yourself, everything is easy. To start bringing in employees complicates things because unless a person knows clothes values well, and unless they understand how you like to do things, the training period may be long and awkward. The store with a computer that sets prices is a big asset once you have employees.
You get to decide whether your prices are flexible when customers ask for deals. I’ve run stores where that was my policy. In time, I was inundated with people who wanted to wheel and deal, which took much of my valuable time. Sometimes, I’d give a guy a good price, and the customer right behind him would say, “What about me, can I get such a good discount also?” Consignors will only be happy with wheeling and dealing if they know up front that that’s store policy. If they know in advance that they may get 15 percent than the usual amount, they’ll generally accept that.
If your prices are set in concrete, your items may spend a lot of time on the shelf, which tends to bother consignors. Rather than wheeling and dealing, you can have a sort of reverse auction. Let’s say you start with a wedding gown at $200. After a week, you lower it to $190. Then after another week, $180, and so on. Perhaps it will sell at $140. This is the most profitable way to get as much as the market will bear for each item, but it requires that you set up a system that allows for such flexibility. For instance, you don’t want to go through everything in the store, marking new prices on tags every week.
Imagine having a retail store with unlimited space, where you don’t have to actually greet customers, it’s open 24 hours a day, has almost no overhead costs, and has not thousands, but millions of customers!
That would be eBay. More than 150,000 people are earning their livings on eBay, and you can be one of them. eBay is one of the easiest businesses to set up, and can start bringing you money within just days. It is possible to start an eBay account, list your first-ever item, and have it sell 10 minutes later.
Setting up an eBay account is as easy as falling off a log. You enter your name and contact info, make a couple of choices, and you’re all set. You’ll also want to set up a PayPal account, which is equally easy, and also free. PayPal is a division of eBay that takes care of collecting money, so you don’t have to deal with credit cards or anything like that.
You can start your eBay business with a single article of clothing. For an example, let’s say you have a collectible Grateful Dead T-shirt.
You might first want to assess the market for your T-shirt. On the top of most pages on eBay is a search field. You can type in a description of your T-Shirt. Maybe something like “1972 San Francisco Grateful Dead Shirt.” You will see a list of any such shirts currently being sold on eBay.
This list is interesting, but not very helpful. It shows only what’s currently being offered. Some items are being sold as fixed price, but you don’t know if they will actually sell, or not. Others are being sold through auction, and you don’t know what value they’ll rise to when finally sold. So, scroll down the column on the left where you can narrow down the search results. Click “More Refinements,” then “Show Only” and finally “Completed Listings.” That’s more like it. Now, you have a list of all items that closed during the past 30 days.
Items that didn’t sell have their prices shown in red. The sellers may have ended the item early, or let the time expire without a sale.
Items that have their prices in green did sell. So you can see how much people have actually paid for your T-shirt. You can click any of the items, see the pictures and read the description so you can better understand competing conditions. For instance, you might find that four of the shirts sold for only $10, while two others sold for $50. Upon reading the descriptions, you see that the four $10 shirts were all faded. You might see one that sold for $250. What’s up with that? Click through, and you might discover that it was signed by Jerry Garcia. And look at that! You didn’t notice it before, but yours is also signed in nearly the same place! (If only. . .)
Now it is time to take some pictures. eBay requires that you supply at least one picture, and allows for up to 12 pictures at no cost. You’ll want to take your pictures in such a way that they make your T-shirt as appealing as possible. I suggest to set the contrast up just a little tiny bit. Make sure the camera is held still, and the focus is good and sharp. Think about the background. It should be non-distracting, and of a contrasting color.
You might model the shirt on a real person, or on a mannequin. Or on a hanger. Or just against a towel or rug on a table. Whatever you think makes it look most appealing. The one downside to a live model, is it makes it clear in peoples’ minds that someone has worn the shirt. Although it is obvious when one thinks about it, being secondhand (although possibly not with a collectible shirt), you don’t want to point out that it is used by showing someone using it. On the other hand, with a live model, you can show the shirt in action on an attractive person, which makes the shirt itself more appealing. Eventually, you’ll probably not use live models because it takes too long, since you may end up listing dozens of items per day.
Keep in mind that the first picture that you upload will be used as a little thumbnail. You want your shirt to either be obviously a shirt at first glance in the thumbnail. Better yet, make it questionable. It is possible to create thumbnails that spark curiosity. People will want click in so they can figure out what they’re seeing.
Then you create the listing. First you select the right category. Most of the time, the right category is within the clothing section. Other possibilities include the “Weird Stuff” section under “Everything Else.” This would only be if you do have a weird bit of clothing. People look in that category who don’t know they’re going to end up buying a shirt. The other possibility is categories that some clothing specifically addresses. A painter’s smock can be classified as clothing, or a painter’s accessory. A T-shirt with a gardening logo might do better in the Gardening section.
For the item title, describe your item in appealing terms, but don’t forget to use the keywords someone who wants this T-shirt will actually be entering.
Click the various options as you create the listing to set it up the way you want. Be honest and straightforward throughout.
These options include:
Condition: New, used, etc.
Description: If it is collectible, state why. If it has special features such as signed by Jerry Garcia, make sure to include that information, even if it is in the pictures.
If there are any flaws, you must mention them. You cannot omit something like a small stain on the back. If you try to sell it without mentioning such flaws, you will not be an eBay seller for long. On the other hand, honest mistakes can be made, and as long as you don’t do it excessively often, all will be OK.
Size: For most clothing items, you can select a size. Whether or not you have a field in which to enter a size, put it in the description also. You don’t want buyers to forget that they have to take size into consideration. However, there are also many professional buyers. They don’t care so much about size, because they’re just going to sell it to whomever it fits.
Auction or Buy-It-Now: An auction listing can run for 1, 3, 7, or 10 days. You get to pick an opening price. For instance, you may decide that there’s no way you’d accept less than $30 for your T-shirt. So that’s your opening price. As the auction progresses, people will hopefully bid higher and higher. There is no limit. I once started an item at $50, figuring I’d be happy if at least one person would bid and give me $50. It sold at $1,200. If you’re lucky, at least two people will want your T-shirt, they’ll get into a bidding war, and the winner will pay way too much!
You can also set a secret reserve price. You can start your T-shirt at 99 cents, with a $30 reserve. This way, you can see what people are willing to pay. If no one pays $30, you get to keep it, yet you can see what they were willing to bid. Maybe the bidding stopped at $25, for example. Most savvy eBay sellers don’t use reserve pricing.
For ordinary non-collectible things, Buy-It-Now is probably a better option. You set a price, and your T-shirt remains available until someone is willing to pay your price. Many people don’t like the auction game. They come to eBay to get something, and they want it as soon as possible, and it would drive them crazy to have to wait and see when an auction closes whether they won or not. Buy-It-Now generally closes a bit higher than auctions on non-collectibles. Buy-It-Now runs 30 days, and can be set to automatically renew every 30 days until the item is sold. It is not uncommon for a merchant to list an item for a fairly high price, and then wait 8 months until it sells.
Return Policy: With clothing and buyers who want things for themselves (as opposed to professional buyers and sellers), size can be very important. You can decide what happens if an item doesn’t fit. Will you accept a return? Will you pay return shipping cost? If so, you may find that 10 or 15 percent of what you sells comes back. On the other hand, the individual buyers are happy to pay much more when they know that they can return things.
Shipping: You get to decide whether you’ll ship an item for free, or whether the buyer has to pay a shipping charge to you. Many sellers offer free shipping, thinking that will make their items more attractive. Others charge the exact amount the shipping will cost them. I charge a bit more, to cover the cost of packing materials (when I don’t use the free envelopes and boxes provided by the Post Office), and to cover my time in packing the item and applying postage. I feel that whereas free shipping is an attractive offer, my prices feel lower, because people don’t really think very much about the shipping cost when they’re considering an item. You can ship by any carrier you like. You may prefer UPS, FedEx, US Mail, or another. I like US Mail because most of my items are fairly small and light, so the costs are smaller. Working with the US Postal Service seems a bit easier to me than the other services.
When you list an item, there is a small listing fee. Depending on a few factors it can range from five to 30 cents. You can also add options so the listing fee will be over one dollar, but I do not recommend any of these options.
When an item sells, there is also a closing fee. This too, is a variable amount, but it averages around eight percent. Finally, PayPal has a fee of around three percent. I like to ballpark my figuring by saying all the fees add up to twenty percent. It is a bit less, but this factors in mistakes and return expenses. So, if something sells for $100, you actually get about $80 after costs.
You’ll find shipping is easy, because eBay includes a free part of their website called Shipping Manager. You put your item in a box or envelope, click Shipping Manager, enter the weight of your item, a couple of other choices, and print a shipping label with the address already filled out on an ordinary printer using ordinary paper. Later, you can get a fancy label printer, if you wish. The shipping cost is automatically deducted from your PayPal account. Shipping with eBay Shipping Manager is slightly less expensive than taking this to the Post Office and paying there.
eBay has a feedback system in which a buyer can rate the transaction. They can give you a positive, neutral, or negative vote. In almost all cases, they’ll give you a positive one. In order to get a neutral or negative rating, you have to misrepresent your item, ship it quite late, and communicate badly with your customer. If you have made a mistake, such as listing the size incorrectly, but communicate with your buyer and do your best to make things right (offer an exchange or refund), then you won’t get negative feedback. Oh, there is the occasional crackpot who is mad at the world and issues negative feedback for no good reason, but that is rare, and eBay has some mechanisms in place to keep that to a minimum.
You can sell things if you have no feedback. Many people will trust a brand new seller with low-value items. If you have something that is selling for a lot of money, lack of feedback can cause some people not to bid. However, most people understand that eBay offers so much buyer protection that even if you turned out to be a horrible seller, they’d be covered by eBay.
As you start selling things on eBay, you will build more and more feedback, and that enhances your profit slightly.
I’m going to propose something that hasn’t been done that I know of, but seems like it has great potential. Maybe you’ll be the first to do it.
Imagine a large vehicle, perhaps a bread truck, filled with secondhand clothing. The driver would have a route, much like the Fuller Brush or Jewel Tea salespeople of a bygone era. The driver (you) stops at customers’ homes or business places, and they step onto your truck, looking over clothing, and buying the things they want. As you get to know your customers, you buy things with them in mind, and show those special items to your specific customers. You’ll build relationships, dare I say friendships, with the people on your route.
Once you get your truck, have signs made on the sides, and fill it with clothing, you could start by pulling into your local flea market. Everyone who boards your truck would be told about your route sales idea. Many will sign up. Your route will build quickly, as people tell people, who tell people, and so on. In time, you can decide who to visit, and which customers to drop, eventually optimizing your route into exclusively big-buying customers. You could specialize in high-end men’s clothing, children’s clothing, sports apparel, anything you want. Sounds like fun, doesn’t it?
This model is being done successfully in modern times, but not very often with clothing. Snap-On and some other tool companies have trucks filled with tools. They visit mechanics in car repair shops.
I wonder how it would be to combine route sales with a consignment operation?
I wouldn’t be surprised if you’ve already been wondering how much any clothing business could be enhanced if you could modify clothing. Right. What if you have the skill and interest in repairing or modifying clothes?
First on the list is repairing. If you have tailoring skill, you can buy things for next to nothing, and sell them for much more by simply adding a button, reducing a worn cuff, replacing a zipper, sewing a seam, or bleaching a stain.
If you can do that, you can do tailoring for others. In most of these businesses, you’ll be in contact with people, and they’ll know that you are a clothing expert. All you need to do to start a tailoring business, either on the side of your clothing buying and selling business, or as a business in itself, is to hand out business cards. After a while, your reputation will be all the advertising you need. You can seed the business by putting cards and flyers on bulletin boards all over town, advertising on craigslist, and so on.
What can you do with a long-sleeve shirt that has a stain on one cuff? How about a pair of pants that’s torn near the bottom? How far can you go with this idea? Is it possible to take a turtleneck sweater in which the neck is all stretched out, and turn it into a collarless sweater? Can you remove the brim from a hat, thereby creating a brimless hat? Can you remove the frilly stuff from a Halloween costume, turning it into an ordinary jumpsuit?
Much of costuming can start with ordinary clothes. You cut and attach as you see fit to make something that represents (or actually becomes) something else. You may find a market with local theaters. You may find a market (consider costume rentals) right before Halloween. You may find a market with musicians, magicians, jugglers and clowns. I can imagine taking two pairs of pants, one torn on the left, one of an entirely different type and color torn on the right, sewing the good halves together and selling that goofy pair of pants to a clown.
I once saw a mother standing behind a stroller while waiting for a traffic light to change. In the stroller was her baby. The stroller had a cloth roof, and on the roof of the stroller was her poodle. While standing there, she paid considerable attention to the dog, and no attention to the child. I’m hoping that she wasn’t always like that, but it is true that some people love their pets – a lot!
People will often dress up their pets, especially their dogs. Cat’s don’t really go for being dressed up so much, because they like to spend a lot of time licking their fur, and clothing inhibits that. But I’ve seen hats and sweaters on ducks and chickens, and I suppose it is possible to make clothing for a snake, lizard, turtle, hamster. . . Well, I suppose the hamster would eat his clothing.
A visit in any pet store will give you an idea how much people are willing to spend on sweaters for their dogs. What else can you invent in pet clothing? If you come up with something that’s an obvious ‘fit’ – pardon the pun – and something that’s positively eccentric, then people will pay anything reasonable to get it for their pet. I can imagine that material costs would be next to nothing. You could cut down, or use the material from human clothing that’s been stained on the sleeves, is torn, or whatever. In fact, these bits of human clothing from which you can start may inspire your pet designs.
Where might you sell it besides selling to, or consigning in pet stores? I believe eBay is a natural and huge market. You might also look into Etsy.com, and Amazon.com as venues for your hand-built pet clothing.
You could become mechanized, building hundreds or even thousands of identical dog sweaters or whatever. Or, you could be an artist, making one-off creations, even taking custom orders from pet owners. You might be asked to make an ascot to tie on a German Shepard, or a cowboy hat for a duck. Are you up to the challenge?
Most celebrities are quite wealthy. This enables them to buy clothing frequently, and discard all the clothing that’s the least bit worn or uninteresting to them. Where does it go? If you can find out, or better yet, offer to pick up and recycle clothing they no longer want, you can get their old clothes. Depending on the popularity of your celebrities, you can sell their old clothing for a lot of money. eBay would certainly be a good market for secondhand celebrity clothes, as fans will bid whatever it takes to get Kevin Costner’s old T-shirt. Especially if it is one he wore in “Field of Dreams,” for instance.
As with anything of higher intrinsic value, celebrity clothing is worth more if you can have it authenticated. Or, better yet, autographed.
Maybe you don’t know any celebrities. Maybe you can’t arrange to get their old clothes. But you can watch movies, right? In a currently popular movie, you may see a bit of interesting clothing. Perhaps a T-shirt with a unique picture on the front, or an unusual hat, or maybe even a cane. Can you get or make replicas? (You’ll want to be careful not to violate copyright restrictions.)
Movie fans will go to great lengths to emulate their favorite stars. If you can modify off-the-rack clothing, or better yet, low-cost used clothing to look exactly like something in a recent movie, you can probably sell many copies online. Of course you wouldn’t want to claim you have the original items. You can plainly state that what you are selling are replicas, and you’ll still find plenty of takers.
I read about a fellow who came across a construction project. Workmen were replacing the original wooden sidewalk of the Brooklyn Bridge. He saw a pile of old wooden planks, and asked whether he could have them. The workmen were happy to give the old wood away, because then they wouldn’t have to take it to the landfill. He took the wood home and cut it into one-inch (2.5cm) squares. He drilled a hole in the corner of each square and attached a keyring. He then advertised these for sale as genuine keepsakes of the Brooklyn Bridge. He made tens of thousands of dollars very quickly.
That kind of gives you some clothing ideas, doesn’t it? Can you get a costume that was in a big movie? Can you get something that President Obama wore? If you get one bit of important clothing, and sell it as a whole, you have only one chance to make a profit. But if you cut it into thousands of pieces, you can make a profit thousands of times over. Making keepsakes out of as little as a few threads is possible. These bits can be made into keyfobs, pendants, clear plastic blocks, jewelry, glued onto buttons, or directly onto clothing. You could simply glue a few threads onto a sheet of paper documenting what you have. This stuff can be sold concurrently on eBay, Etsy, DeviantArt, Amazon, all sorts of websites.
When you see something at a thrift or garage sale that’s unique, you can buy it, take it apart and make a pattern from its pieces. You can then make the same thing, but using your own choice of color and material. You might even like to modify some of the dimensions, creating something entirely new.
Being a business coach, I haven’t looked into the market for patterns, but you probably know: Are they profitable? Could you sell patterns? What if yours are unique, or presented in a unique market. Are people looking for patterns on Amazon? On eBay? Are there patterns already for sale in those venues? What could you do different in order to sell your patterns?
I have heard that more clothing is sold by Mattel for their Barbie Doll line than any real clothing company. I wonder if there is a market in making doll clothing? Perhaps to collectors? I’ll bet ordinary clothing would provide plenty of material for doll clothes. eBay would probably be the best outlet for hand built doll clothing.
Take an ordinary T-shirt, pair of pants, skirt, hat or backpack, and cover it with patches. Done artistically, you may have a very sellable product line.
People don’t think much about buttons and accessories, but there are things that can be done with them. I wonder if someone who knows what they are doing could go into a thrift store, buy a sweater or shirt for its buttons, take them off, and sell them for a nice profit on eBay? I wonder if a rather ordinary blouse could be enhanced with just the right buttons, frills, or what-have-you?
Think about an ordinary pair of pants or a dress. What could you add to it so it will become someone’s fashion statement? Another good eBay play, don’t you think?
If you can embroider, and can think up designs that someone would want, you could earn a great living. I’m not thinking so much about ordinary stuff, like “One for the Road” or “Stuff Happens.” I’m thinking of specialized markets. What would a bicycle racer like? How about an ice skater? How about a guitar player? How about all the guys at the XYZ factory? Wouldn’t that be a nice commission? To sell embroidered jackets to the XYZ company for every one of their employees.
Remember tie-dyeing of the 1960s? The idea is that you bunch up shirts, skirts or pants in various places with rubber bands, and dip those bunched areas into pots of dye. In the end, you have colorful large splotches, that at one time were almost essential fashion. That’s the way it was done back then in America. Tie-dyeing has been done for centuries in other parts of the world. You can learn about and utilize some of the ancient techniques, as well as inventing your own, such as painting the dye in designs onto clothing that’s bunched in inventive ways, using layers or stages of dying, and incorporating unique folds.
Now you have everything you need to start your own clothing business, If you can stay focused, motivated and on track, you’ve got it made! However, these attributes are difficult for most people. I’m a business coach, so I know! In fact, that’s exactly what I do: I help people actually become successful in business.
Over the years, I have developed a support system for you that works great, costing just $188/month. I work entirely by email. Besides much lower cost, this gives you several advantages over the traditional once-weekly phone conversations. You don’t have to schedule a time, and make sure to be ready for the calls. We can write as often as you like, even once a day if needed. As things come up, we can discuss them right away. And, email tends to work better than voice communication in terms of taking the right actions for the greatest success.
As you read this, I probably still have room for more clients, or the waiting list is short, so go ahead and drop me an email at firstname.lastname@example.org or check out JeffNapier.com for more details.
Have fun and prosper! – Jeff Napier