Today we are going to look at the importance of a business model or choosing the right business model.

The secondhand clothing business is a low-cost, low-margin, high-volume business that specialises in buying bulk and selling to lower-income consumers, your main target there are people who can’t afford to buy new clothing.

The “preloved” and vintage clothing business is the premium or differentiation strategy of the secondhand clothing industry, this is people paying a premium for unique clothing or good quality clothing, for whatever reason: they have unique fashion sense and they want to look different, they prefer preloved because they don’t like the environmental effects of the textile industry or they want quality clothing at a good price – a good price and not cheap.

Here is the thing: there is a very thin line between the first business model and the second, one if exploited properly can see astronomical profits.

What is preloved?
From Dictionary.com: Preloved is an informal word that describes an item that was previously owned. Preloved is typically used to describe something for sale to avoid calling it used or secondhand.
So a fancy word for secondhand, there are some legitimate uses for the word, as if to imply that something was really well looked after.
What is vintage?
Vintage is described as something from the past of high quality.

You often hear the boomers complain “they don’t make it the way they used to”.

This business buys and sells quality clothing that was well looked after as well as something from the past that is not made anymore.

If you compare this to the lost-cost model in this industry, the low-cost secondhand clothing, the objective there is mainly to source popular sizes, that will sell easily, functional clothing.

The preloved and vintage business requires a better eye for fashion, you need to know what your customers want.
The target market is completely different from the lower-cost secondhand business, your target market is usually twenty-something females, usually employed upwardly mobile. I don’t know how big the male market is but guys unlike females don’t like to wear other guys clothing. Even the shops in this industry are almost exclusively female.

The sales and marketing is also completely different, in the low-cost model, the clothing are crumbled into heaps in community markets, in preloved and vintage both the marketing and sales happen on social media, where clothing is modelled or taking with props, Instagram is a popular promotional tool with apps like Yaga gaining traction. Logistics also differs low-cost, secondhand clothing is usually collected via black bags, here the shipping usually happens via courier, ironically many use Pep’s Paxi service.

So we’ve established that you need to know what can sell, the target market, promotional and sales channels but let’s look at stock acquisition.

So many of these people that sell preloved and vintage on Instagram they buy their stock from thrift shops and charity shops and add a 10x, 20x and even 30x markup, I kid you not. My mind was blown at the margins these people are making, its like drugs. So the question is what really separates a low-cost from a differentiation strategy in this industry? Is it just an eye for fashion? This is not a Toyota vs. Ferrari or Kulula vs. Elite Jet where the low-cost vs differentiation is so easily defined. I can tell you it’s a very thin line, why? Because Instagram “preloved and vintage” sellers are now sourcing from the very bales that low-cost sellers source from, unique good quality and vintage end up in these streams all the time, most times when people donate to charity shops as well it’s good quality, even what you would call vintage. That thin line is merely clothing that you can buy right now from cheap shops like PicknPay clothing, I don’t want to say Mr. Price even as I have seen Mr.P clothing being sold in Preloved channels.

If you can find that sweet spot and can grow a following this is a business that can be started with very little capital and you can make enough money to jump ship.