A step-by-step guide to opening a thrift store

Thrift stores are a great way to support your cause.

Most mid-sized thrift stores are non-profit thrift stores supporting a cause. (There's also a good population of small mom-and-pop style thrift stores run as for-profit stores, usually employing the owner and maybe an associate, and then there are also some very large thrift stores run by for-profit organizations like the Savers/Value Village chain.) If you're starting a thrift store to support a non-profit, there's a good chance you already have a large base of support to seed your supply of inventory.



Find a space

One of the first things you'll need to think about is your space. An average Goodwill store is around 7,000 square feet. I've been to many mom-and-pop thrift stores that are just a few hundred square feet. Some large Habitat for Humanity ReStores might be on the order of 40,000 square feet. If you have an existing organization you're supporting, it's possible some of your space could be used for the store. Just make sure that it makes sense for retail and that it is zoned for retail. Retail space can be somewhat pricy. The good news is that thrift stores often serve a fairly broad market, and don't need to be in the highest rent areas. People shopping your stores are often looking for a bargain - they're not trying to impress their friends with the fact that they're shopping in a fancy part of town.



Start thinking about store policies

Read reviews of other thrift stores on Google and Yelp. Which stores got a high number of reviews on Google? (High numbers of Google probably means a lot of foot traffic, since Google will automatically prompt many Android users to leave a review after they leave a store.) Of the stores that got poor reviews, what were some big complaints? Of the stores that got good reviews, what were the reasons? Start basing your policies with this customer feedback in mind. Here are a few pointers:
· Inconsistent or high pricing is a down-side. When you're getting started, it's probably better to start pricing tool low rather than too high.
· Dirty stores get lots of complaints. When laying out your space, make sure it's easy to clean.
· Rude staff members are another common complaint. Of course, many of those complaints are left by rude customers, but especially if you have volunteers running the store, make sure that your customer-service expectations are clear.
· Consider how to discount items. Your pricing won't be perfect and some items will need to be discounted. Click here to read a whole article on discounting.
· Think about return policies. Most thrift stores have an all sales final policy, which is fine. But you can stand out by offering a return policy. If you want to make sure the money stays in the store, you might want to consider offering returns for store credit. ThriftCart's point of sale system has built-in support for tracking store credit balances.
· If you sell large items (furniture, appliances, building materials), create a policy for how long a customer can leave an item behind before they pick it up. 2 business days, 3 business days, and 7 calendar days are popular choices for allowing customers to leave items behind. Most stores not using ThriftCart will have triplicate carbon copy paper forms for customers leaving items behind, where they can write their name, phone number, and the items they bought. (One copy at the register, one copy on the item, one copy with the customer.) If you use ThriftCart's Thrift Store POS system, however, you can print those slips directly from the register.
· Decide whether you'll allow price negotiation. If so, set parameters for how that's done. Most thrift stores do not allow price negotiation. That policy should be clearly in writing near the cash register, so the cashier can point to the sign when a customer asks for a lower price. Similarly, make a policy for items without price tags. Some customers will maliciously remove price tags from items hoping to get a better price at the register. So, many thrift stores have a policy of not selling any items without a price tag, instead sending the item to the back to be reprocessed.
· Set price points for common items, so you're not just making things up at the back of the store. Many clothing thrift stores will have certain categories of clothing with fixed prices (e.g., all jeans $5.99.). If you have fixed-priced item categories, this saves you the trouble of having to put tags onto individual items.



Get some inventory

You'll need something to sell at your thrift store. If you are a non-profit and you have a donor base, see about running a campaign to reach out to your donor base to get some items. If you have the resources to run a donation pickup service, that's a great way to get donations. Just remember that it's expensive to run trucks. Large pickups (furniture, appliances, etc) cost around $80 each, and small pickups (bags of clothes, household items, etc), cost around $10-$20 each. So, you need to ensure you're getting an average of 3-4 times that amount in retail value from each pickup for it to be worth the time. Drop off donations are best when you can get them.

If you're running a clothing thrift store, the good news is that America is overrun with clothing. If you don't have time to source donations from locals for free, you can seed your store with items from bulk clothing suppliers. A quick google search for buy bulk used clothes yielded many results. Also, many regional Goodwills run their Goodwill Outlet stores where they sell excess items by the pound. My local Goodwill Outlet sells clothing for $0.89 per pound. (A pair of jeans weighs between one and two pounds, so you can use that as a reference point.) Bulk clothing suppliers selling mixed bag pallets of clothing state that a 1000 pound bale of clothing typically has around 2000 pieces. So, an average piece of clothing costs about $0.45 at Goodwill outlet.)

You'll also need to seed your store with non-clothing items. Again, if you have an existing donor-base, their donations are a good place to start. If not, Goodwill Outlet is a fun place to pick up many housewares items. If you're looking for higher-end items, particularly in boxes you can buy returns sent to online suppliers as a way to seed your inventory. A quick Google search for buy Amazon returns pallet will bring you to suppliers of items that were returned to online giants, and then sold off in bulk. (Liquidation.com is one such supplier.) Unless you also plan to sell items on eBay, this is probably not a great long-term way to source inventory, but it might be a good way to keep your store from looking empty.

Of course, you can also do things like buy up the contents of abandoned storage units, or show up at the end of yard sales and agree to buy everything for a rock-bottom price. (Or if you're an established non-profit, agree to take the items for free and give them a tax receipt.)

Also, consider whether you want to offer some new items for resale. Many clothing thrift stores offer new underwear and socks. Many building materials thrift stores offer new paint and paint supplies as well as lightbulbs. Lots of stores also offer food items for the customers to snack on. Consider what you might want to offer, and find suppliers.



Get ready to open

Once you have your lease locked down, you'll need to take steps to open. Lay out your space, put in shelving, wire up your cashier station, buy signage, and so forth. Make sure to include enough space to process incoming donations. Once you get established, you could be getting mountains of donations, so you'll also need procedures to rid yourselves of excess donations. Do a search for local textiles recyclers so you can inexpensively get rid of clothing items that are not usable. (Sorry, you will get a lot of those if you sell clothing!) Set up bins for recycling other items. Metal junk items can be valuable. Broken appliances may even be valuable if you have a quality metal scrap yard nearby. You'll also need a dumpster for the stuff that's just trash. Make sure your stores are well-lit. People know they are buying used items, but they don't like shopping in dingy places. Make sure the changing rooms are obvious and plentiful. Make sure you have clear paths to load and unload any large items. Get shopping baskets or shopping carts, depending on the average size purchase you expect customers to make. Don't crowd your store. You can crowd the stock room in the back, but make sure there's plenty of physical space for customers to browse without getting bumped by fellow shoppers.



Get some press and attention

Moment can mean a lot in business, so having a big grand opening can really get the ball rolling. Although newspapers don't have the influence they once did, a lot of the thrift-shopping world still reads articles by local writers. Get in touch with all the local press - TV, newspapers, and radio - and see if they'll give you some free coverage. This will be much easier if you are from a well-known local non-profit organization. Hop on Facebook and Instagram and start promoting the grand opening.



Have a soft opening

You'll probably make a few mistakes early on, so before your grand opening, consider having a soft opening. Just open the store with no promotion, and see what foot traffic comes in. This is also a good time to remind people that they can drop off donations. You can keep your staff and volunteers busy pricing incoming items as a small number of customers trickle in. Pick a selection of customers and ask them about their experience. Make corrections as you go.



Have your grand opening!

Make sure your store is well stocked and have a grand opening. If you're a non-profit, double-staff the store for this day. If you're for-profit, consider recruiting friends and family members to be on standby to help you out. You don't want shelves to be sold bare, so make sure you're ready to restock with new items from the back. Consider giving away promotional items to keep people excited. (Give them a coupon for their next visit, and another coupon to give to a friend.) If they're shopping there, remind them they can donate as well. Ask them to come back. Ask them to tell their friends.



Rinse and repeat.

An increasingly popular tactic is to have multiple thrift stores in the same region. You can share your inventory, resources, and expertise between the stores. You can also have a large store in the area where your customers are located, as well as smaller satalite stores in the areas where your donors are located, if you find that there is a big difference between your customer-base and your donor-base.