Everything To Know About Starting A Second-hand Business In Nigeria
Starting a second-hand business is one of the best things a woman can ever go into as it is more profitable and lucrative than most people think.
Be it the most popular second-hand business- clothes, shoes and bags or furniture, antiques, and the like, second-hand businesses have a lot more to offer and you should consider this area of business.
Okrika products are sourced online at eBay or Alibaba or bought from major distributors who in turn obtained them from charity organizations, auction houses, and clothing merchandise willing to clear their racks to make space for new products or individuals who continually buy all year round when sales are cheap or heavily discounted.
The clothes are then carefully selected, packaged and baled to be exported. Have a reliable source of supply to always meet up with demands and avoid disappointing your clients.
Below are some necessary tips you need before going into this business.
1. Choose your line of business
Focus on a type of item that you want to carry and the market that you want to reach. Do not try to sell everything or you will get lost in the jumble of retail stores. Being known for themes such as having high-end evening wear, career clothes, durable vintage pieces or children’s consignment items will attract customers who are looking for those things. Make sure customers can easily understand the theme of your shop by the shop name, your store sign, business cards, etc.
2. Do not stock too many expensive items
To have high turnover at the start of the business, don’t compete with high-end markets, except you are sure of your clients base and patronage. For example, if you buy a bale of chiffon tops at N90,000, there is possibility you will get 300 extra quality out of 500 or more, say you sell at N500 each that’s a sum of N150,000, excluding transportation, delivery and rent costs, you can make a tidy profit of N30,000 on each bale, which is enough gain, imagine you get to sell 5 bales in a month.
You can plough back this gain to reinvest in the business and get more goods unlike keeping and holding on to stock just because you want to obtain higher prices for them and you manage to sell 2 or 3 bales, the market wont move and your turnover will be low.
3. Records are important
Keep a record of all sales, items in stock profits and loss, be accountable for your business, pay your taxes, start a savings plan. Hire professional staff to help with the running and daily activities of the business as it grows. Separate friendship from business, discourage selling on credit and people owing you especially if your goods are reasonably priced.
Have time for the business, especially in the first year of starting it to enable you have a good idea of what the business involves as this period is still a learning process. The first year will determine if you can continue and succeed in the business, but with adequate determination, it should be an easy journey.
4. Don’t invest lots of money at first
Like with any new business venture, it’s a good idea to start small and keep your expectations realistic. Dropping lots of money on inventory might feel exciting, but it could take a while for you to recoup those losses when a business is brand new.
5. Accept the ups and downs
Unlike a regular 9-to-5 job, being in a second-hand business doesn’t always come with a steady paycheck. Running any kind of business comes with income fluctuations, and in retail, certain times of year are just busier than others.
The holiday season may tend to yield more sales but the key to getting through the unavoidable less profitable periods is to be prepared. The more you count on your shop as a source of income, the more savings you should have socked away to keep you afloat for when sales slow down.
6. Consider selling on consignment.
This means you accept an item for sale, but you don’t pay for it upfront. Many second-hand stores get their goods this way. It cuts down on start-up costs because you don’t pay for the item until it’s sold. Once the item sells, you give a percentage of the money to the person who supplied the item. You also keep a percentage.
7. Pay particular attention to your location
Select a location in a middle class or low-income area. An area populated by the rich may not be the best location for a second-hand clothing shop. A high traffic area near other shops like yours may attract bargain hunters who are also interested in used items.