How Do You Create a Resale or Thrift Shop?

Starting a resale business is a great idea for new entrepreneurs. It doesn’t rely on manufacturing a product or selling a novel idea. Instead, you buy products from other suppliers and resell them for a profit. In addition to having the potential to be lucrative, it is also an environmentally sustainable business choice. To start a reselling business, however, you must have a plan.

The Official Business Plan

The business plan is your road map. It contains your strategy for success, including any potential hurdles and how you plan to overcome them. The traditional business plan starts with an executive summary. Your executive summary is one of the first things that investors or financial agencies are going to see. Keep your summary at one page or below. You want it to be concise, and to the point but also descriptive.

Include your concept, mission statement and your business’s vision within the executive summary. Additionally, the executive summary should address the types of products you plan to sell, your target market and your marketing and financial strategy.

One of the strongest parts of your business plan is your market research. Your market research should include who you think is your potential market and how large it is. Creating a customer profile can help you target your marketing and your products to that demographic.

The POS System for Resellers and Thrift Shops

Don’t wait until after you start your business to think about your point-of-sale system. The POS system for a resale shop should be different from a system for traditional retail shops. Instead of tracking manufacturing, you have to track your purchases from suppliers or donations from the local community.

A thrift store POS system can track repeat donations, print receipts and schedule thank yous. Many thrift stores also have regular discounts and utilize colored tags within their shop. A POS system designed for thrift stores will make it easy for you to create those discounts and track their success.

The Legal Business Structures

Next, you need to have a business structure. Your business structure is your company’s setup and legal identity. The structure you choose will heavily affect how you register your business, the taxes you pay and the liabilities that you face. Before you register your business in your state, you need to choose a business structure.

Different business structures include:

• Sole proprietorships: In a sole proprietorship, you are not a separate entity from your business. Your assets and liabilities are combined, so if someone files a lawsuit against your company, you could be held personally liable. Sole proprietorships should only include low-risk businesses.
• LLCs: An LLC is a limited liability company. LLCs protect your personal assets from liabilities related to your business. LLCs are a flexible option that can benefit a medium or high-risk business.
• Partnerships: If you own your reselling business with another person, it makes sense to establish a partnership. Most people use partnerships to test a business idea or when they have a company with multiple owners.
• Corporations: Corporations are fully separate from their owners. This is the highest form of protection that your business can have. As a corporation, you would have more extensive operational processes, record-keeping and reporting than the other structures.

Before you choose a business entity, think about your company’s needs and remember that you can change your legal structure later.

The Reseller’s Merchandise

Thrift stores can focus on a specific market, such as clothing sales or media sales, but they don’t have to settle for selling a specific type of product. Resellers should take advantage of diversifying their products with clothing, accessories, electronics and other products as they grow their business.

Look for different places to purchase your products. You can buy wholesale or you can focus on donations or purchasing used items through various avenues, including eBay or other marketplaces. Some sellers choose to scour garage sales or auctioned storage units to find items to sell. Your product should cost you little money so if you have products that don’t do well, it doesn’t hurt your business to remove them from your overall stock.

Starting your own thrift shop or resale business can be a fulfilling and lucrative opportunity for you as a business owner. It allows you to start a business with a low carbon footprint and to find gems for your customers.