How To Start a Thrift Store in 2024 - Shopify Nigeria (2024)

A thrift store is a specific type of retail business that resells used goods at discounted prices. Also known as a secondhand store or charity shop, thrift shops can sell anything from vintage clothing to unique antiques.

Opening a thrift store is a great business opportunity, particularly if you don’t have much money to get started. Not only can you source second-hand products for much cheaper than they’d be brand new, but you can build community and serve those in your local area who might not have the money to buy new.

You’ll also participate in the circular economy and prevent waste—products you’re reselling won’t end up in landfill—and tap into the second-hand market that’s predicted to hit an $82 billion valuation by 2026.

If you want to start a thrift store but you’re unsure where to begin, you’re in the right place. This step-by-step guide walks you through the process of opening a thrift shop, starting with the foundations and ending with your store launch.

How to open a thrift store

1. Research your target market and local competition
2. Develop a business plan
3. Register your thrifting business and obtain necessary licenses
4. Find a suitable location and lease a space
5. Source second-hand inventory
6. Set up your thrift store layout and design
7. Price your items
8. Hire retail staff if needed
9. Set up a point of sale system
10. Market your thrift store
11. Host a grand opening event
12. Continuously manage inventory and store operations

1. Research your target market and local competition

Market research gives you a good indication of how successful your thrift store will be. Check whether the demographic in your shortlisted areas are typical thrift shoppers. You could survey people who live in the areas or use demographic data (such as the average age or income bracket of people who live nearby) as a way to prioritize potential stores.

Bear in mind that you don’t always need to set up shop in an area where thrifting is popular amongst locals. If your shortlisted retail location is a tourist destination, you could cash in on bargain hunters who travel further afield to thrift shop.

2. Develop a business plan

A business plan is a document that details the overarching vision of your thrift store business. It’ll show your end goal and how you plan to get there, acting as a roadmap for you to grow the business once you’ve set it up.

As part of the business plan for your new thrift store, cover aspects such as:

• Your brand story and the values you stand for
• Market research
• Products you’ll sell, including your niche
• Financial plan
• Marketing plan
• Logistical and operations plan

👉 Get yourbusiness plan template.

3. Register your thrifting business and obtain necessary licenses

Registering your new business is a monumental milestone in any entrepreneur’s journey. As soon as your business becomes officially registered (either as an LLC or S-corp), you’ll have extra legal protection since the thrift store and you are two separate legal entities. It also offers tax benefits—things you buy to open and maintain the thrift store can be written off as expenses.

You’ll also need retail insurance to protect yourself against any legal problems once the store is up and running. Check that you’re covered in case thrift store shoppers are injured in your store, if you’ve accidentally sold a product that’s unfit for purpose, or if your store is broken into.

Finally, check whether you need a general business license or sales permits to open your thrift store. Businesses in regulated niches, such as those selling age-restricted items like tobacco or alcohol products, need special licenses before they can set up shop.

4. Find a suitable store location and lease a space

There are three words that are crucial when opening any retail business: Location, location, location. Where you set up shop influences the marketing you’ll have to do to get people there.

A high-traffic location significantly reduces the amount you’ll have to spend on marketing. An engaging window display could be all you need to convince passersby to visit your thrift store. That said, high traffic areas like shopping malls aren’t always accessible. Some people might prefer to visit thrift stores that are easily accessible by public transportation or with car parking outside.

Here’s a handy shortlist of things to consider when scouting a retail location:

• Is the store accessible?
• Is the area safe with a low crime rate?
• How often do businesses tend to last in this area?
• Are there any zoning regulations?
• Will you be competing against other thrift stores within the local area?

Once you’ve found a potential retail space that meets your criteria, contact the agent to arrange a viewing. Check that there’s enough space to handle stock, process donations, and set up a checkout desk.

5. Source second-hand inventory

To make a profit through your new thrift store, you need to source inventory for a lower price than you’ll sell it for. This is a tricky task—the usual route of buying new products from a wholesaler doesn’t fit the thrift store ethos.

Places to source cheap inventory for your thrift store include:

• Donations. Ask customers to donate their unwanted items to your store. You could set up a donations area in the store, place collection bins around the local area, and partner with local businesses who can collect donations on your behalf. It’s a great way to get free inventory.
• Estate sales. People might sell the contents of their homes if the homeowner has passed away, are downsizing, or are relocating in an estate sale. You can find unusual or high-value goods that people don’t want to donate, while still negotiating with the owner to secure a lower price.
• Flea markets or garage sales. Find your local flea market or community garage sale to pick up secondhand items that you can sell through your own online thrift store. You can find hidden gems here, particularly if they’re hosted in affluent neighborhoods.
• Auctions. High-value items often go to auction and are sold to the highest bidder. If you want to open a luxury thrift store or sell antique items, find your local auction house and place a bid on the inventory you want to resell. Just remember that you’ll need to add your own markup when reselling, so go a little under the price you estimate you could sell it for.

6. Set up your thrift store layout and design

Before you start welcoming people into your thrift store, think about the shopping experience you want to provide. A great store layout—one that makes people feel welcomed and at ease when they’re thrifting—can not only entice people to come in, but also buy the secondhand products you’re selling.

While there is no “best” way to optimize your retail store layout, there are some general guidelines to help you maximize floor space:

• Create an eye-catching window display that showcases your best thrifting finds
• Avoid placing inventory in the first five to 15 feet of the opening—this is known as the “decompression zone”
• Incorporate breaks or stopping points to prevent people from breezing through too quickly and overlooking merchandise
• Make the checkout desk easy to locate with retail signage
• Place inventory that could be an impulse purchase, such as low-value items, near the checkout area for people to pick up while they’re waiting in line

7. Price your items

Pricing second-hand goods can feel like a minefield. You’re likely selling inventory for less than the recommended retail price (RRP), but you still need to make a profit on any goods you sell.

Remember that profit doesn’t just mean covering the cost of buying each product. Factor in operating costs—such as store rent, point of sale subscriptions, and marketing costs—into your retail pricing strategy to still turn a profit once you’ve covered your store expenses.

As for pricing individual items, consider:

• Quality. If there are obvious signs of wear and tear, you might charge significantly less than the RRP. Quality items can demand a premium.
• Demand. If a particular item is in demand (and supply can’t keep up), add a premium to the product price.
• Condition. On rare occasions, the item might be worth more than it originally sold for—particularly if it’s a rare or vintage find. If you find a vintage designer purse, for example, there might be collectors who will spend extra money on a thrifted item to add to their collection.

8. Hire employees if needed

There are many moving parts associated with running a thrift store. It’s not always possible to do it all yourself, hence why some entrepreneurs hire retail staff before their store even launches.

Jot down the responsibilities you’ll have when the store opens and whether you’ll have the capacity (or enthusiasm) to do them. A sales associate is a good first hire if you’re not quite sure. They can pick up any extra tasks around the charity shop, such as:

• Assisting customers
• Ringing up items on the point of sale system
• Setting up product displays
• Providing excellent customer service
• Replenishing inventory
• Cleaning the store

9. Set up a point of sale system

A point of sale system is a type of technology that can manage your store operations and process transactions from customers. You can use it to manage inventory, arrange staff rotas, ring up orders, and process payments through a compatible card reader.

Shopify POS has everything you need to get up and running. The mobile app allows you to turn any device into a POS system. Simply download the iOS or Android app, find a card reader from the Shopify hardware store, and start ringing items at the checkout counter.

The best part? If you want to open a successful online thrift store and sell through your own website or online marketplaces, Shopify gives you one source of truth for your inventory. No more selling items that are out of stock; more happy customers.

10. Market your thrift store

Retail marketing spreads the word about your new thrift store and convinces people in the local area to visit. A great marketing campaign communicates your value proposition, showcases the products available to buy, and gives an incentive for people to visit.

Try these marketing ideas to get people excited about your store:

• Host retail promotions, such as giveaways or flash sales
• Use direct mail, such as posters or leaflets delivered to people in the local area
• Create social media profiles for your new store to tease new inventory
• Ask local influencers to talk about your store in exchange for a free item
• Get press coverage in local publications or magazines
• Launch a customer loyalty program to turn first-time visitors into repeat customers

“Advertise as much as you can online and don't be afraid to,” says Amit Mahtani, owner of Bagels on Greene. “Change up the advertising and try different things. The worst thing that's going to happen is somebody won't click on it.”

11. Host a grand opening event

Get people excited about the upcoming launch of your own thrift store with a grand opening. The one-day event builds buzz in the local community and gets people excited about the new thrift shop.

For example, you could:

• Host a contest or competition
• Tap into experiential retail by turning the event into a party with food, drinks, and music
• Invite local influencers or celebrities to attend
• Give the first 20 visitors a free product or a generous discount
• Partner with a local charity and donate a percentage of profits on the day

Consider giving people an extra incentive to come back once the grand opening concludes. For example, you could offer people who attend on opening day a free $5 store credit voucher to redeem on their next purchase. This not only gives potential customers a reason to attend, but a reason to come back once the hype from the launch wears off.

12. Continuously manage inventory and store operations

Set your thrift store up for success by implementing procedures that keep the store running efficiently. These retail operations make sure the customer experience is consistently great, and that you don’t spend too much money on unnecessary tasks.

Once your thrift store is open for business, document retail operations like:

• How you’ll manage incoming inventory (particularly donations)
• Your approach to customer service and staff training
• Opening and closing procedures
• Payments methods you do and don’t accept
• Returns and exchanges

Let’s put that into practice and say you don’t currently have an opening procedure—a checklist of tasks to complete before the store opens every day. Sometimes you forget to turn on the POS system so the first customer has to wait; other times you forget to wipe down surfaces so the store looks unclean.

A well-documented opening procedure, however, makes sure that these tasks are done every day, no matter who is on shift.

How much does it cost to start a thrift store?

Our data found that the average small business owner spends $40,000 in their first full year. Product-related costs are the biggest expense, though thrift store owners can fall significantly below this average. You don’t have to pay for excess inventory if you’re accepting donations.

Here are the other costs to consider and the amount they tend to claim from the $40,000 annual average:

• Operations: 10% to 15%
• Shipping: 8% to 12%
• Online: 9% to 10%
• Marketing: 7% to 12%
• Team: 14% to 30%

If you don’t have money to start a thrift store, consider startup funding options like bank loans or community grants. Grant issuers might be more inclined to give out funding to thrift stores because they encourage more sustainable shopping habits.

Pitfalls to avoid when opening your own thrift store

There’s a lot to consider when starting a thrift store. It’s not uncommon for entrepreneurs to pick the wrong choices and make their path to making money much harder.

Common pitfalls to avoid when starting a thrift store business include:

• Choosing the wrong location. Thrift store owners that set up shop in areas with a demographic of people who are unlikely to thrift, or stores that are out of town, have an uphill battle. Market research and competitive analysis can help here.
• No inventory management processes. Thrift stores tend to have one of every product. When it’s sold, it’s gone, which makes inventory management much harder. Use a thrift store inventory management tool like Stocky to show real-time availability, which is especially important if you’re selling through the retail store, ecommerce website, and through social media storefronts.
• Ineffective pricing. You likely started a thrift store to make money, but people tend to shop for secondhand items when they’re on a budget. It’s difficult to find a happy medium and takes trial and error.

Make 2024 the year you become a thrift store owner

Thrifting isn’t just a fun activity to do on the weekends—it can be a lucrative business venture that helps you make money while also helping the environment and supporting your local community.

The key to operating a successful thrift store business is niching down into a specific type of secondhand products, pricing your inventory competitively, and finding unique ways to source items other than wholesalers. It’s a lot of work, but it’s worth it.