Where do thrift stores get their inventory?
There are many sources for thrift store inventory
Maybe you're running a thrift store and looking for new ideas to procure inventory, or maybe you're considering opening a thrift store, or maybe you're just a curious thrift store shopper.
Drop off donations
One of the biggest sources of inventory for most thrift stores are donations dropped off at the store. This is particularly true if the thrift store is run by a non-profit. Many donors gladly bring their used clothing, appliances, furniture, housewares, building materials, and more to the local thrift store, for the joint purposes of helping the mission of the organization, getting a tax deduction for the donated items, freeing up space in their house, and helping reduce waste. Some thrift stores open up smaller satalite stores in more affulent areas of town, not so much to make more sales, but more to drive more high-value donations. ThriftCart has a drop off donation tracking tool, which can help with e-receipts, and keeping track of where your donors are coming from and what they are bringing you and when.
Donation pickup service
Many thrift stores run donation pickup services, often offering free pickups of large items, and occasionally even picking up small items like bags of clothes. Running a donation pickup service can be expensive, with most trucks being able to do about 6-10 pickups per day at an average cost of $60-$100 per pickup completed. (It's possible to do far more pickups if you're just picking up bags of clothing by the curbside, and this reduces the cost per pickup significantly, but the value of the items is also much lower.) Many stores require that at least one large, valuable item by included in the pickup, such as an appliance, or piece of large furniture. The average value for a pickup donation should be around $250. Of course, some will be much lower, and many will be much higher.
ThriftCart's Donation Pickup Scheduling tool can help reduce the cost of operating your donation pickup service with features like route optimization. That way you can pack more pickups into a single day, and spend less for each pickup.
Many stores set up unmanned clothing bins as a way to attract additional donations. These bins need to be well-maintained. If they aren't the owners of the shopping centers where they are placed may asked for them to be removed. Clothing bins are nice, because you can have many drop locations without needing to increase staff significantly. If you are a non-profit and you have clothing bins, consider prominently displaying that on the outside of the bin. Many clothing bins are operated by for-profit thrift stores, and some donors may prefer bins operated by non-profits. So, if you are a non-profit, feature it clearly on the bin.
Neighborhood donation drives
It can often be productive to blanket mail an entire neighborhood or geographical area, and mention that you're doing a donation drive in their area. This could be, for example, that you set up shop in a local shopping center or church parking lot and collect donations there for a day, with permission of the owner, of course. Or maybe you dedicate your donation pickup truck to service only that area for the day. You can bulk-mail everyone in the area announcing the donation drive and the date(s) that the drive will happen.
Purchased clothing from wholesalers
There are many wholesales of used clothing. In the US, there is far more clothing purchased than we have use for. Much of our used clothing ends up getting shipped overseas. But you can also purchase pallets of clothing domestically from these wholesalers. Prices can vary depending on the grade of the clothing. If you're starting a thrift store, this may be a good place to get started, even if you are a non-profit. You might have trouble attracting donations before the store is open, so you can seed the inventory with items from a wholesaler. Usuaully these items ship with freight transporters, so shipping may be slow.
Many businesses have items that they need to donate. For example, a hotel doing a remodel might have large quantities of furniture. A local contractor may have new building materials that were misordered, and are not returnable. Local manufacturers may have seconds or items produced for cancelled orders. Local retailers may have out-of-style or excess items.
Many thrift stores sell some of their items on consignment. (And of course, there are many consignment retailers.) If you doing clothing thrift, you can consider having an upscale section of your store for consignment items. You can offer either store credit or cash for consigned items. ThriftCart's point of sale module can track consignment sales.
Many thrift stores purchase items for resale just like traditional retails. For example, clothing thrift stores may purchase socks or underwear, and building materials thrift stores may purchase paint, paint supplies, or flooring. This allows your shoppers to meet more of their needs without going to other stores. Generally, thrift stores can have up to 15% of their sales be from purchased product items before they become subject to UBIT (Unrelated Business Income Tax). Please consult with a tax expert prior to doing purchased product to ensure that you report everything accurately.
Liquidation of returned items
Many traditional retailers and e-tailers have generous return policies, but really aren't set up well for reselling returned items. So, for many returned items, they put them on pallets, and sell them via liquidation auction houses. For example, you can Google Amazon Liquidation Auctions to find auctions for large quantities of returned or unsellable items. These can definitely be mixed bag, so it usually takes a bit of effort to separate the wheat from the chaff. The valuable items can be quite valuable, but there will be many items that are of poor quality, or well returned because they were defective and are unusuable.
Hopefully this article has given you some inspiration for where you can source inventory for your thrift or reuse store!