If you’re looking to open a thrift store, now is the perfect time — it’s a business model that’s rapidly gaining popularity. According to the National Association of Resale Professionals, there are over 25,000 resale, consignment, and nonprofit resale shops in the United States. But that doesn’t mean there’s no space for you in the industry — after all, online retailer ThredUp estimates that the global secondhand market will expand to $350 billion by 2028, growing three times faster than the overall apparel market.
Although you want to strike while the iron is hot, opening a thrift store is a complex process that should be done with care. Whether you’re an individual thinking about starting a small business or a nonprofit looking to supplement your fundraising efforts, following these steps will help you confidently start the process of opening your thrift store in 2025.
What Is a Thrift Store?
A thrift store is a retailer that sells used or secondhand items, usually at a lower price than new items. Some thrift stores focus on a single type of item, whereas others offer a variety. Here are a few examples of the items thrift stores usually sell:
- Clothing
- Accessories
- Furniture
- Household items
- Books
- Toys and games
- Collectibles and antiques
- Electronics
Why Should You Open a Thrift Store?
Many people shop at thrift stores because of their relatively inexpensive goods. Others shop there in search of vintage items that are no longer produced. Regardless of the reason, shopping at thrift stores is incredibly popular. Just consider these statistics from Capital One:
- 16 to 18% of Americans shop at thrift stores each year.
- 93% of Americans shop online for secondhand items.
- In 2023, the U.S. secondhand market generated an estimated $53 billion in revenue.
Opening a thrift store allows you, as a business owner or nonprofit professional, to capitalize on the popularity of secondhand shopping — and see an increase in profits.
Plus, thrift stores support sustainability by empowering consumers to reuse items. Every year, 92 million tons of textile waste end up in landfills, yet much of that is recyclable. The thrift store business model keeps textiles and other items out of landfills by encouraging individuals to donate their items to these stores to be resold. Through thrift stores, old items are given new life, contributing to a more eco-friendly and sustainable future.
10 Steps to Opening a Thrift Store
Let’s take a look at the steps needed to open a thrift store:
- Create a business plan.
- Register your business.
- Obtain your licenses and permits.
- Secure funding for your thrift store.
- Find your retail space.
- Source your inventory.
- Determine your pricing strategy.
- Invest in thrift store technology.
- Hire necessary staff members.
- Promote your thrift store.
1. Create a Business Plan
The first step to opening a thrift store is to select your niche. For thrift stores, this usually means focusing on a specific type of item. For example, you could select books as your thrift store’s niche. In that case, you’d source popular or valuable secondhand books to sell in your store.
After you’ve selected your niche, you’ll build a business plan based on it. Your business plan should include the following:
- Executive summary: Include your store’s mission statement along with descriptions of your business, goals, core values, products, and target market.
- Market analysis: Research the thrift store market in your area, including your target customer’s demographics, needs, and preferences. Additionally, consider any competitors in the location, including what they offer, the cost of their items, and their customers’ demographics.
- Staffing plan: Determine the number of employees your thrift store will need, what roles they will fulfill, and your hiring plan. For instance, when you're first starting, you may need cashiers, retail assistants, and inventory sorters.
- Financial projections: Outline the financial details of opening your thrift store, such as funding requirements, sales projections, and profit margins.
If your store is part of a nonprofit or all proceeds will go toward a nonprofit cause, you can still benefit from creating a business plan. While you’ll run your store differently than you would a for-profit business, the contents of your business plan will help you identify if opening your store is feasible and which steps you need to get up and running.
After creating your business plan, gauge how realistic it is. If necessary, bring it to your organization’s leaders for approval. Based on your judgment and your stakeholders’ approval, you can start the process of opening your thrift store.
2. Register Your Business
Once you’ve decided to open a thrift store, you need to register it by:
- Choosing and trademarking your thrift store name
- Obtaining your employee identification number (EIN)
- Registering for taxes
If you’re a business, then you’ll also need to determine your business structure and whether your thrift store will be a:
- Sole proprietorship, where there is no legal distinction between business and owner. In this case, the owner will receive all the profits but will be responsible for any losses.
- Partnership, which is similar to a sole proprietorship except with multiple owners or partners.
- Limited liability company (LLC), which is a business structure that protects its owners from personal liability and is regulated differently depending on the state. Many thrift stores fall under this structure.
- Corporation, which is a legal entity that is owned by its shareholders. Profits are shared among owners and the general corporation.
If your thrift store is part of a nonprofit, then you won’t need to worry about deciding your business structure. However, there may be regulations you need to follow to ensure that your thrift store follows all the legal requirements of a 501(c)(3) organization.
Regardless of whether your thrift store is a for-profit business or part of a nonprofit, we encourage you to consult a lawyer to help you navigate the rules and regulations of registering your store. They’ll ensure you comply with federal, state, and local requirements and protect you from legal liabilities.
3. Obtain Your Licenses and Permits
After declaring your thrift store as a legal entity, you need to obtain the necessary licenses and permits required for you to operate and sell your products. Generally, these include:
- General business license: This is required to operate a business in almost every state in the U.S.
- Sales permit: A sales permit is a license to collect sales tax on retail transactions. It is also known as a resale license, sales tax permit, seller’s permit, and reseller permit.
- Wholesale license: If you intend to purchase inventory in bulk, a wholesale license is required to buy items at wholesale prices. However, if you plan to source your inventory another way, you may not need this permit.
- Zoning and sign permit: If your thrift store will operate as an in-person storefront, you need to obtain a zoning permit. These permits allow a parcel of land to be used for a specified purpose. You’ll also need a sign permit, which allows you to display signage for your physical location, such as the name of your store.
Required licenses and permits will vary from state to state and even county to county. Be sure to check your local regulations, and don’t hesitate to contact a lawyer to determine if you’ve obtained all the licenses you need.
At this stage, you may also want to purchase insurance for your thrift store to protect you from any issues. For instance, you may want liability, commercial property, and workers’ compensation insurance.
4. Secure Funding for Your Thrift Store
If you don’t already have the funds needed to open a thrift store, then you’ll need to obtain them. For individuals or small groups, this means that you may need to request a loan from a bank. You can also try crowdfunding, asking friends and family to support your thrift store by contributing a small amount.
If your thrift store is part of a larger business or corporation, you may be able to request funds from the company to support it.
For nonprofits, you can put your donations toward opening your store. You can even host a capital campaign or create a specific fundraising program, letting donors know that you’re planning to open a thrift store to garner more funds for your beneficiaries. Your loyal supporters will likely be thrilled to help you in this new fundraising venture.
5. Find Your Retail Space
Now that you’ve taken care of the legal requirements and obtained the necessary funding, it’s time to look for a retail space. Most new thrift stores will need to lease an existing space and customize the inside to fit their needs. Start by inquiring at local malls or shopping centers, as those areas guarantee foot traffic and ensure that your store will have customers.
After you’ve obtained your storefront, create a floor plan. This means deciding on:
- The overall layout of the store
- The location of checkout counters
- The type of merchandise you’ll sell in each area
- What type of display fixtures you’ll need
- Where the fitting rooms will be
- The location of emergency exits, fire extinguishers, security cameras, and other safety information
Focus on creating a well-organized, inviting thrift store space to maximize sales. For example, fitting rooms are usually in the back of stores to avoid taking space away from displays. Additionally, customers must walk through the store to reach the fitting rooms, resulting in customers discovering more items they want to try on.
Online Thrift Stores
If a physical retail space is not an option, consider opening an online thrift store through one of the following platforms:
- Online marketplaces: Online marketplaces are a great place to sell secondhand items for very small thrift stores that are just starting or don’t have a lot of inventory. eBay, Facebook Marketplace, and Poshmark are just some of your options — simply choose the platform that best suits the items you plan to sell. Additionally, pay attention to each platform's fees so you’re not caught unawares.
- E-commerce platforms: These platforms allow you to create an e-commerce website with minimal coding or web design experience. With the right platform, you’ll create a visually appealing online store that attracts new customers.
- Self-hosted store: For larger thrift stores with the funding, technical resources, and desire to have a uniquely customized storefront, a self-hosted e-commerce website is the way to go. You’ll have complete control over your site, allowing you to create your desired customer experience.
With an online store, you can reach customers nationwide, leading to more potential sales. However, you will not have an attention-grabbing storefront, so you may need to put more effort into marketing and promotions to gain visibility. We recommend pairing an online store with a retail store to reach the most potential customers.
6. Source Your Inventory
Next, obtain the initial items and products your thrift store will sell. Thrift stores can obtain inventory from many sources, including:
- Wholesalers: If you have a wholesale license, you can receive discounts by purchasing inventory items wholesale or in bulk. You can contact manufacturers directly or look for secondhand wholesale sellers for this option. For example, Goodwill outlets sell clothing cheaply and by the pound.
- Storage unit auctions: When individuals stop paying rent on their storage units, the owner is allowed to liquidate the items contained within the unit. In a storage unit auction, bidders usually make an offer on the contents of the entire storage unit, making it a great place for you to find unique secondhand pieces at low prices.
- Yard and estate sales: Generally, individuals hosting yard or estate sales are trying to liquidate as many items as possible in a short time frame. These individuals may be willing to allow you to purchase many items for a large discount.
In addition to these options, you can also source inventory through donations. This option is best suited to nonprofit thrift stores, as in-kind donations (also known as non-monetary donations) to nonprofits are tax-deductible, making donation drop-offs a more attractive option for those looking to get rid of items. Just know you'll need to issue IRS-compliant donation receipts for these contributions.
However, if you’re a for-profit business, you can incentivize donations by offering a $5 or $10 coupon for every acceptable bag of items.
7. Determine Your Pricing Strategy
Over the last few years, thrift culture has evolved from a way for low-income individuals to find affordable items to a sustainability-focused movement where people seek out unique vintage pieces. This means that thrift stores now have the opportunity to price their items higher than before — however, striking a balance between affordability and profitability is still key.
When pricing your items, keep the following factors in mind:
- Condition and quality: High-quality or good-condition items are worth more than low-quality or poor-condition items.
- Brand and rarity: Popular brands or rare items are more sought after and may be sold at higher prices.
- Seasonality and demand: Seasonal items that are in demand can be priced higher, as it’s likely that individuals will still purchase them.
Research other retailers and thrift stores in your area to understand how to price items while keeping your profit margins in mind. Additionally, consider your store’s niche, audience, and goals. For example, if your thrift store is nonprofit-run and dedicated to providing affordable items to individuals in need, you may price your items lower than your competitors. However, if your focus is one-of-a-kind vintage clothing and furniture, your prices may be higher instead.
8. Invest in Thrift Store Technology
Keeping track of sold inventory, overseeing your finances, and managing your thrift store can be very time-consuming. To reduce your workload, invest in robust thrift store software that will help you automate and streamline your processes.
In particular, look for software with the following features:
- Inventory management: Easily track your inventory to ensure that it’s moving, and stay on top of sourcing before it runs low.
- Discounting: Discount specific departments and color code your price tags to reflect deals. Plus, offer sales for specific groups, such as employees, seniors, or volunteers.
- Point of sale (POS) and receipts: Accept various payment methods, such as credit cards, debit cards, cash, and mobile wallets. Plus, provide customers with print or email receipts.
- Donations: If you run a nonprofit thrift store, you’ll need a solution to handle donations. The right software will encourage customers to donate by rounding up their purchase to the nearest dollar and will track in-kind gifts to help you maximize revenue and inventory. Plus, you can send thank you notes to your kind donors!
- Reporting and analytics: Stay on top of your data with reporting and analytics features that will help you improve your store operations to generate more revenue.
If you’re looking for a thrift store solution, take a demo of ThriftCart. Our cloud-based software is built specifically for thrift stores, making it the best choice for meeting unique thrift shop needs. ThriftCart has all the above features (and more!) and the software is incredibly easy to use.
9. Hire Necessary Staff Members
Before you open your store to the public, make sure that you have the help you need to ensure everything runs smoothly. That means hiring staff members, which may include:
- Store manager: This individual will oversee the day-to-day store operations. They’re in charge of ensuring that your thrift store runs efficiently and smoothly and meets its goals.
- Sales associates: These staff members work on the frontline assisting customers, processing payments, restocking inventory, and maintaining the organization of the store.
- Inventory manager: This staff member will work in the back of the store to manage inventory levels and coordinate restocking activities. They may also be in charge of pricing items.
- Donation coordinator: Thrift stores that accept donations can greatly benefit from a dedicated donation coordinator, who will accept donations, sort through them, and determine which items can be sold. When you’re first starting out, your inventory manager may be able to handle these responsibilities — but as your store grows, you’ll need an individual dedicated to these tasks.
Depending on your store’s unique needs and growth, you may need additional staff members. For instance, if your thrift store has a large furniture selection, you may want to hire a staff member with expertise in furniture repair or refurbishment. Or, if your thrift store rapidly gains popularity online and you want to create an online storefront, you may need a dedicated e-commerce manager.
10. Promote Your Thrift Store
Now that you’re all set up, it’s time to promote your store and gather customers. To maximize your visibility, market your thrift store through various channels. This way, individuals who only pay attention to one specific marketing channel can still learn about your shop.
Use the following channels to market your thrift store:
- Your website: Your website is the first place most individuals will go if they want to learn about your thrift store. Ensure it contains all necessary information, such as your address, hours, and contact information. It should be mobile-optimized so interested individuals can learn about your store from any device.
- Local business listings: If you have a physical store, you can benefit greatly from adding your thrift store to local business directories such as Yelp or search engines like Google. Since these sites have a great deal of traffic (there are almost 6 million Google searches per minute!), having your business listed on them will significantly increase visibility.
- Social media: With over 5 billion individuals using social media platforms, this marketing channel has become one of the best for free advertising. Popular platforms include Facebook, Instagram, and TikTok.
- Paid advertising: If your thrift store has the revenue to spare, you may consider paid advertising, such as Google Ads or Facebook Ads.
- Email and SMS: Email and SMS marketing allow you to target individuals who have previously engaged with your thrift store, whether they’ve purchased products from your store or donated items. Send emails and texts about new discounts, promotions, or inventory drops to generate excitement and attract customers.
Additionally, use your grand opening as a marketing tool. Give away promotional items, such as discount coupons or branded merchandise, to entice people to attend. Promote your grand opening several weeks in advance to ensure a good customer turnout.
Additional Thrift Shop Opening Resources
Opening a thrift store is a complicated process, but with the help of this guide, you’ll be well on your way to successfully starting your store. With the tips here, you’ll start generating revenue for your business or nonprofit in no time.
If you’re interested in learning more about running a thrift store, take a look at these resources:
- Thrift Store Pricing: How to Be Affordable and Profitable: To attract customers and generate revenue, thrift stores must tread a fine line between affordability and profitability.
- Where Do Thrift Stores Get Their Inventory? Guide + FAQs: Not sure where to source inventory from? Explore this guide for ideas and answers to FAQs.
- Best POS Systems for Thrift Stores: Our 5 Top Picks: A robust thrift store POS will boost efficiency and profitability for your store. Discover the top solutions you should consider.
