Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on December 31, 2021 Updated on February 29, 2024
$2,550 - $35,100
$156,000 - $780,000 p.a.
Time to build
1 – 3 months
$125,000 - $234,000 p.a.
Thrift stores can be full of treasures that someone else didn’t want, from clothing to trinkets to furniture. The US thrift store industry is valued at over $10 billion and growing. Whether you decide to specialize in vintage clothing, furniture, or a variety of items, you can make a profit by opening your own thrift store.
You could also follow the path of a business like Goodwill and have a social mission with your thrift store. Goodwill’s mission is to divert items that would be discarded away from landfills to offer them at affordable prices to customers, while actively helping job seekers find employment in their stores.
Launching and running a thrift store will have challenges and will require work and time to get started. This step-by-step guide has all the relevant information and insight that you need to move forward and begin your entrepreneurial journey.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Companies like Poshmark and ThredUp are booming, buying and reselling high-end fashion items. This presents a tremendous opportunity for a go-getter entrepreneur to start an online thrift marketplace without the startup costs and overhead expenses of a physical store.
How much does it cost to start a thrift store business?
Startup costs for a thrift store range from $2,500 to $35,000. The low end represents opening an online store with the largest costs being inventory and a website setup. The high end reflects the cost of opening a physical store.
You’ll need a handful of items to successfully launch your thrift store business. Here’s a list to get you started:
Shelving and counters
Storage containers for items
Setting up a business name and corporation
$150 - $200
Licenses and permits
$100 - $300
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
$1,000 - $20,000
Retail space security deposit
$0 - $6.000
Retail space preparation
$0 - $5,000
$2,550 - $35,100
How much can you earn from a thrift store business?
Typically, the markup on resale items is between 5 and 8 times the purchase price, but it can vary greatly. Use our markup calculator to calculate your sale price and how much revenue and profit you will earn with different markup percentages. If you start an online store from home, you can expect a profit margin of about 80%.
In your first year or two, you could work from home and sell 200 items a week at $15 average per item, bringing in $156,000 in annual revenue. This would mean around $125,000 in profit, assuming that 80% margin. As your brand gains recognition, sales could climb to 1,000 items per week. At this stage, you might rent an office and hire staff, reducing your profit margin to around 30%. With expected annual revenue of $780,000, you would make about $234,000.
What barriers to entry are there?
There are a few barriers to entry for a thrift store. Your biggest challenges will be:
You’ll have to find inventory to start with which will take some legwork
Competition, particularly online, is high
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a thrift store, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research other thrift stores to examine their products, price points, customer reviews, and what sells best. You’re looking for a market gap to fill. For instance, maybe the market is missing an online home goods thrift store.
You might consider targeting a niche market by specializing in a certain aspect of your industry such as glassware.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your products
You can decide to specialize in a certain type of product such as clothing, or you could offer a variety. If you decide to purchase items at garage sales to re-sell, you could find any number of things from clothing to glassware and home goods.
Source products for your thrift store
The key to success in a thrift store is not just about having a wide range of items, but also about having interesting, unique, or high-demand items that attract a variety of customers. Here’s how to source them:
Community Donations: Encourage local residents to donate items they no longer need.
Estate Sales and Garage Sales: These are great places to find unique and valuable items at a low cost.
Auctions and Liquidation Sales: Check out local auctions, including online platforms.
Collaborations with Local Businesses: Partner with local businesses looking to offload old stock or unwanted items.
Online Marketplaces: Platforms like eBay, Craigslist, or Facebook Marketplace are excellent for finding items.
Flea Markets: Flea markets can be treasure troves for unique thrift items.
Storage Unit Sales: Sometimes storage units are auctioned off. These can contain a wide variety of items, often at a very low cost.
Consignment and Buy-Outright: Consider setting up a consignment system where people can leave their items for you to sell, or offer to buy items outright from individuals.
Wholesale Purchases: Look into wholesalers who specialize in used or surplus goods. While this might require a larger initial investment, it can be a reliable source of inventory.
How much should you charge for thrift store items?
Your prices are going to vary based on what you buy items for and how much people are willing to pay for items. Keep in mind that your customers are going to be looking for items that are significantly less than they would pay for new items.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will depend on the type of products you decide to offer. If you specialize in trendy or vintage clothing, your target market will likely be younger, so you can find them on sites like Instagram or TikTok.
Where? Choose your thrift store location
If you have an online store, in the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office.
Look for a spot with high visibility and easy accessibility for both foot and vehicle traffic, preferably in a commercial area or close to other complementary businesses. You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Thrift Store Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “thrift” or “thrift store”, boosts SEO
Choose a name that allows for expansion: “Affordable Finds Thrift” over “Furniture Finds Thrift”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Thrift Store Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: Provide a brief overview of your thrift store business, emphasizing its focus on selling affordable, quality second-hand goods and its unique position in the retail market.
Business Overview: Describe your thrift store’s operation, which includes sourcing and selling a variety of used items such as clothing, furniture, and household goods.
Product and Services: Detail the range of products offered, including second-hand apparel, home décor, books, and potentially upcycled items.
Market Analysis: Assess the demand for thrift and second-hand goods, identifying key customer segments like budget-conscious shoppers, vintage enthusiasts, or eco-friendly consumers.
Competitive Analysis: Compare your store to other local thrift shops and second-hand stores, highlighting your advantages in product variety, pricing, or store location.
Sales and Marketing: Outline your strategy for attracting customers, such as through community engagement, social media marketing, or loyalty programs.
Management Team: Highlight the experience and roles of your team, focusing on retail management, merchandising, and sustainable business practices.
Operations Plan: Describe the day-to-day operations, including inventory sourcing, store layout, and customer service procedures.
Financial Plan: Provide an overview of financial aspects, including startup costs, pricing strategy, and revenue projections.
Appendix: Include supplementary documents like supplier agreements, market research data, or community partnership details to support your business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to thrift stores.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your thrift store will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
Benefit Corporation – A B-Corporation is a business of any entity type that has a social mission but can still make a profit. By passing rigorous standards and “meeting the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose” they can get a B-Corp certification from B Lab, a non-profit organization. Not all states recognize the B-Corp status. The B-Corp is taxed based on what type of entity it is. For example, a corporation that has B-Corp certification is taxed as a regular corporation.
Non-Profit Corporation – A corporation that does not generate profits and works toward a social mission. The owners are not personally liable for debts. Funding comes from donations or fund-raising activities.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Friends and family can help fund your company either for a stake in the company or as a loan. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter offer an increasingly popular low-risk option, in which donors fund an entrepreneur’s vision. Other crowdfunding sites like Fundable and WeFunder allow you to invite multiple investors to fund your business for a stake in the company
Personal: Self-fund your business via your savings, or the sale of property or other assets.
Bank and SBA loans are probably the best options, other than friends and family, for funding a thrift store. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Before you start making money you’ll need a place to keep it, and that requires opening a bank account. Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your thrift store business as a sole proprietorship.
Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Developing a website for your thrift store is a critical step in establishing your online presence and reaching a broader audience. Utilizing website builders like Shopify, Wix, or Squarespace is a convenient and cost-effective way to create a professional-looking site without needing extensive coding knowledge. These platforms offer customizable templates, which you can tailor to reflect your store’s unique personality and brand.
It’s important to optimize your website for both user experience and search engines (SEO), ensuring it loads quickly, is easy to navigate, and is mobile-friendly. Incorporating clear calls to action (CTAs) is essential; these could be prompts for visitors to sign up for newsletters, follow your social media, or check out your latest collection.
Opening a thrift store presents unique marketing opportunities to connect with your community and stand out. Here are some effective strategies:
Social Media Engagement: Use platforms like Instagram, Facebook, and TikTok to showcase unique finds, store events, and promotions. Regular posts and engaging content can build a loyal following.
Local SEO Optimization: Ensure your website and online content are optimized for local search engine results. This includes using local keywords, having a Google My Business listing, and ensuring your store’s name, address, and phone number (NAP) are consistent across the web.
Community Involvement: Participate in local events, sponsor community activities, or collaborate with local artists and creators. This builds your brand’s presence and reputation within the community.
Email Marketing: Collect email addresses at the point of sale or through your website. Send out newsletters with special deals, store updates, and featured items to keep your store top of mind.
Customer Loyalty Programs: Implement a loyalty program to encourage repeat business. This could be a points system, discounts on future purchases, or special sales for returning customers.
Local Directories and Online Listings: Get your thrift store listed in local business directories and online platforms like Yelp, TripAdvisor, or local chamber of commerce websites to increase visibility.
Targeted Local Advertising: Consider using local advertising in community newspapers, radio, or local online forums and groups. Tailor your ads to the local audience to maximize impact.
In-Store Events and Promotions: Host special events like vintage fashion shows, DIY upcycling workshops, or themed sale days to draw in customers and create a buzz.
Collaborate with Influencers and Bloggers: Partner with local influencers or bloggers who align with your brand to reach a broader audience.
Visual Merchandising: Make your store visually appealing and regularly change displays to keep the shopping experience fresh and engaging.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your thrift store meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your thrift store business could be:
Thrifty home goods that fit your budget
Sustainable clothing that sustains your wallet
Re-sale jewelry at rock bottom prices
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a thrift store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in the resale market for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in thrift stores. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a thrift store business would include:
Sorters – sort and price items
Store clerks – make sales if you have a physical store
Marketing lead – SEO strategies, social media, other marketing
Buyers – find items for re-sale
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Thrift stores are great for the community and the planet, and your own store can be good for your bank account. It’s a nearly $11 billion industry and growing, so why not make money while doing a service for others? It’s fairly easy to start an online store, and you can do it for very little money. You can also start from home.
You could grow your business to include physical locations later. Now that you’ve read all about it and have all the information you need, you’re now ready to start your entrepreneurial journey and open your own thrift store!
Thrift Store Business FAQs
Can you make money having a thrift store?
Yes, you can make money from a thrift store. While some operate as nonprofits and take donations, others are for profit. With an online thrift store, you can earn a high profit margin, as much as 80%.
How can I get merchandise for my thrift store?
Many re-sale stores extend offers to buy people’s used items and then re-sell them for a profit. You can also go to garage sales or estate sales to find quality items to re-sell.
What strategies can I use to promote and market my thrift store?
Utilize social media platforms to showcase unique and desirable items, share styling tips, and engage with your audience. Offer special discounts or promotions for loyal customers or new visitors. Collaborate with local influencers, bloggers, or community organizations to generate buzz and attract new customers.
What steps should I take to ensure the cleanliness and quality of items in my thrift store?
To ensure cleanliness and quality of items in your thrift store, establish strict quality control procedures. Implement a thorough inspection process for all items before they are placed on the sales floor. Regularly clean and organize the store to provide a pleasant shopping experience.
How profitable is thrift?
The profitability of a thrift store can vary depending on factors such as location, pricing strategy, quality of items, and target market. With careful selection of items, effective marketing, and efficient operations, thrift stores can generate a profitable income.
Where is thrifting most popular?
Thrifting is popular worldwide, but certain regions, cities, or neighborhoods may have a stronger thrift store culture. Thrifting is often popular in urban areas with a diverse population, strong community involvement, and a sustainability-focused mindset.
How can I differentiate my thrift store from competitors in terms of selection or pricing?
Curate a unique and diverse selection of items, focusing on high-quality and sought-after brands. Regularly update your inventory to provide a fresh and exciting shopping experience. Offer competitive pricing by carefully pricing items based on their quality, brand, or demand. Implement sales or discount programs for specific items or designated shopping periods.
How to Start a Thrift Store
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Thrift Store Name
Create a Thrift Store Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Thrift Store Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Thrift Store - Start Making Money!
Thrift Store Business FAQs
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