The buying and selling of secondhand clothing to lower income consumers is one of the most profitable small businesses with low startup costs and high margins with quick turnaround providing you can get a steady supply of quality but cheap used clothing and can find an appropriate place to sell it.
Poverty, unemployment is widespread in South Africa, however clothing, is one of the essentials that everyone needs, this has opened up an opportunity for secondhand clothing resellers. With South Africa’s economy in such poor shape, people who would previously not have purchased secondhand clothing will purchase it today. Also some people who had previously given away clothing for free instead of selling it will also rather get something back then give it away for free which means a supply for you. What makes the reselling of clothing such an attractive small business is that nobody will have exactly what you have, if you at a market, you may have some competition also doing clothing reselling but if you have a quality supply of clothing you will sell it. It’s not like you selling an imported item where ten different stalls are selling the same item for the same price.
This is a business where you buy a lot of stock and move a lot of stock, you will either be purchasing your clothing by the black bag or per unit. This is a buy a t-shirt for R20; sell it for R40 business, multiple times a day depending on where you are located. There is potential for excellent profits providing you can get the supply and location right. You don’t even have to sell that many units where the profit margins are bigger but you should be looking at making at least 100% profit. However please remember that the places where secondhand clothing sell in volume will only run for once, maybe twice a week, so you have to consider that. The time when you are not at the market can be spent looking for secondhand clothing to buy.
Yes, there is money to be made in the resale of higher end clothing as well, but it is the lower end market where you should be looking. I don’t have to tell you that the majority of people in South Africa are living in poverty and they all need clothing.
Finding a good supply along with location is the most important aspects in this business. In fact I would rate the location even higher priority. You are looking for a location in a lower income area, preferably a type of flea market setup where you can just empty your stock onto the table and people browse and buy. The area does not have to be a lower income area on its own, it can be a town where the surrounding areas are low income or rural and people come into the town to do shopping. In many towns there are flea markets twice, maybe thrice a week; this is the places you want to sell at. Some days will be busier than others like end of month when people get paid or the beginning of month when child care and old age grants are paid out. Besides looking for a town with lower income areas in close proximity, look for towns that attract people from rural areas or even from other African countries, often times people leave their homes with the clothes on their backs to look for work and as soon as they get a job they start to buy clothing – often times secondhand.
The quality of clothing you can source at a good price is important, but the right type of clothing is important as well. Look for fast selling popular items. For males you are looking for functional clothing, t-shirts, jeans, jackets etc. If you grow large enough you can also import bales of clothing from other countries. If you are in short supply of clothing you can also try reselling secondhand curtains or bedding.
The buying and selling of secondhand clothing is one of the most underrated small businesses and many people prefer it that way as it means less competition. It is something that can be done with little skill and less risk than other businesses that cost more to start. But I cannot stress it enough location, location, location – there are some poor areas where people may not want to purchase secondhand clothing and they would put themselves in debt to buy new, meaning it’s not a great fit for this business, but if you can get the location and supply mix right, you can grow this business by either expanding the amount of tables you sell from or visit another market in another area on another day.
Image credit: Anton Malan
How to start a secondhand clothing business in South Africa
There is both a lower-end market aimed at low income earners and a high-end market for designer clothing aimed at middle and upper income consumers. While there is both a male and a female market in the lower-end there is virtually no male market in the higher-end. Unlike females middle and upper income guys just don’t want to wear other guys’ used clothing and would rather buy a cheaper brand new than a designer brand secondhand.
Our focus: the low end market
While there are high-end secondhand (or like they say “pre-loved”) boutiques out there (2nd Take, Second Time Around etc.), I find that business a bit too risky for the small business owner, even if you sell on consignment, you end up with a lot of expenses in rent and staff and with stock that you have no guarantee that will sell well. Unless you are really passionate reselling high end secondhand fashion there are probably better businesses out there (even in the fashion space). Our focus is the lower end of the market.
Where to Buy Secondhand Clothing
Sourcing a constant supply of good secondhand clothing is imperative for success in this business. Here is how to go about:
Buy by the bag
Many people who have previously thought about donating their clothing end up selling it or will consider selling it if you make it easy to take it off their hands. Put adverts in your local classifieds or Gumtree saying that you buy secondhand clothing by the bag. Word your ad around the lines of “I collect and pay cash” and make sure to mention that you are in the lower end of the market by using terms such as “up to Rxxx paid per bag”, so people know you don’t buy designer fashion by the unit instead you just buy clothing by the bag.
This is a fantastic source of secondhand clothing. People who don’t sell their unwanted secondhand clothing usually donate it to charity shops. What is a charity shop? Charity shops are like “Goodwill” shops in the US, they sell items that have been donated to help raise funds for a cause. Whether it be HIV/AIDS initiatives (Pink Shop), animals (SPCA charity shop), religious (Salvation Army), poverty alleviation, homeless shelters etc. A lot of charity organisations accept donated items which they resell as part of their fundraising efforts, almost every major town in South Africa has a charity shop, and some larger cities have multiple shops. Clothing is the most common item in most if not all of these shops. Here is a partial list of charity shops in South Africa.
Flea markets (if you already selling at a flea market – try other flea markets or even other stalls in your flea market)
Another source of clothing is flea market stalls, especially if you can buy from one place and sell at the other, even more so if you know what is popular at one particular place you can get from one flea market and sell at the other. Often time you will get great products and great prices, sometimes other sellers just have better sources than you, maybe a relative of them works at a place that gives them great free clothes which they then decide to sell. Look for marked down lots and bulk buys here as well. One flea market that has a lot of secondhand clothing sellers is the Parow market in Cape Town, if you can buy there and sell somewhere else that would be a great business. I’ve seen some R5 items at my local flea market, even R2 items:
How and what to buy
At the beginning buy variety, as it’s difficult to know what will sell and what won’t sell at your particular location. Adult male, female, children, baby etc. Later on you will get a feel for what sells at your location and what doesn’t, this is very important as you could end up having a lot of money tied up in stock that is not selling. Getting your product mix right is important whether you a multinational or selling vetkoek on the corner. In one area mince curry vetkoek will be popular while in others plain, French polony and chicken livers vetkoek will be popular. Same with secondhand clothing, in certain towns and certain times you will have people mostly buying clothing for themselves while in others you will have them buying clothing for their children or relatives children.
If you buying at charity shops look out for their specials sometimes they have ridiculous discounts to clear out old stock. Also, try to get bulk discounts some will, some won’t, it doesn’t harm to try as sometimes they have boxes of stock at the back that they still need to unpack and they can use the space to put out the new stock.
Where to sell secondhand clothing
The second part of the equation to making this a sustainable business is where to sell. Where you live will play a major part as well. For example if you live where there is large informal trading areas you already have a daily market, where you can sell to the community.
This is one of the cheapest places to sell from that has a lot of foot traffic on market days. A table is all you need to empty your clothes onto. Although you can use rails to display the clothing as well.
Many businesses we cover requires a lot of foot traffic to be a success. We often call these “mall businesses” even though the concept will work at other high traffic locations such as markets. To the informal sector the taxi rank fills a similar role and this is a great product for a taxi rank: common sense tells us you cannot sell a low margin item where there is little foot traffic, and you also can’t sell a high margin item in areas where people cannot afford it, secondhand clothing is in the sweet spot in-between.
Many people in SA treat used clothing as worthless, and will probably snicker at this industry, thinking why? But this is a massive part of the informal sector. You must not allow South Africa’s modern infrastructure and pretty beaches to mislead you: South Africa faces the same challenges like the rest of the continent. The majority of people (even in Cape Town) are living in poverty and could use some quality secondhand clothing while they spend what little they have saved on something worthwhile like putting food on the table and putting their children through school.
A buying and selling business is one of the easiest businesses to get into; it requires little skill (besides basic mathematics) and can be started with very little capital. There are two underlying components to a successful buying and selling business: 1.