Resellers Best Practice Checklist

A data-informed guide for turning thrifting into a sustainable business

If you want to resell seriously, you must think like an operator, not just a shopper.

Reselling sits inside the broader retail and secondhand economy, which has grown rapidly in the past decade. According to ThredUp’s annual resale report, the U.S. secondhand market has been projected to grow significantly faster than traditional retail in recent years. Growth, however, does not equal ease. A growing market still requires disciplined operators.

This checklist is not poetic. It is practical. It is meant to protect your margins, your time, and your sanity.

1. SOURCING: Tactical Criteria

Most resellers fail at sourcing because they rely on instinct instead of criteria.

Set a Buy Rule

Professional resellers use margin targets. A common benchmark in retail is aiming for 60–70% gross margin. That means:

• If you buy for $10, your resale price must support a meaningful return.

• Many use a “3x rule” as a minimum starting point.

• Some aim for 70% margin after costs.

  
  

Before purchasing, ask:

• Can this sell within 30–60 days?

• Does it meet my margin threshold?

• Does it align with my customer base?

  
  

If the answer is no, walk away.

Track Sell-Through Rate

Sell-through rate measures how much inventory sells within a specific timeframe.

Formula:

Units sold ÷ Units available = Sell-through %

If denim sells at 65% and formalwear sells at 20%, that tells you where to allocate capital.

Time-Limit Sourcing

Unstructured sourcing leads to hoarding and poor capital allocation. Set:

• A fixed sourcing window

• A sourcing budget

• A target quantity

Create a No-Buy List

Track items that historically sit:

• Certain fast fashion brands

• Oversaturated categories

• Complex restoration projects

  
  

Data should guide your future purchases.

5-Point Quality Check

Inspect:

• Seams

• Zippers

• Armpits

• Hems

• Fabric thinning

Structural damage can erase profit instantly.

2. RESTORATION: Risk Awareness

Restoration is where time disappears.

Calculate Hourly Labor

If you spend 4 hours restoring a garment, that labor must be valued. If your time is worth $25/hour, that piece must support at least $100 in added value to justify the effort.

Otherwise, you are working for free and you wont be able to pay the bills.

Define Repairable vs. Not Worth It

Create a standard:

• Cosmetic fix? Acceptable.

• Structural tear in delicate fabric? Likely no.

• Severe odor or fiber damage? Usually no.

Maintain a Restoration Kit

Include:

• Lint shaver

• Professional steamer

• Fiber-specific stain guide

• Replacement buttons

• Fabric glue

• Sewing kit

• Leather CPR

Learn Fiber Care

Silk, wool, cotton, synthetics, and blends all behave differently. Damage from improper cleaning can eliminate resale value entirely. The more you understand textiles, the less you lose.

3. PRICING: Formula-Based Thinking

Many resellers price emotionally. Professionals price structurally.

Pricing Formula

A sustainable pricing model includes:

Cost of Goods (COG)

• Restoration Labor

• Allocated Overhead

• Target Profit Margin

  = Final Price

If you ignore overhead such as rent, software, utilities, transaction fees, or payment processing, you are underpricing.

Retail gross margin benchmarks often range from 50–70% depending on category. Resale must operate similarly if it is to survive.

4. INVENTORY MANAGEMENT: Metrics Matter

Inventory Turn Rate

Inventory Turn = Cost of Goods Sold ÷ Average Inventory

Higher turnover means healthier cash flow.

If the inventory turns less than 2 times per year, capital is frozen.

Aging Policy

• 60 days: evaluate

• 90 days: markdown strategy

• 120+ days: clearance or bundle

  
  

Emotion cannot dictate retention.

Monthly Deadstock Review

Pull reports:

• What has not moved?

• Which category underperforms?

• What was overpriced?

Adjust accordingly and consistently!

Open-to-Buy Budgeting

Determine how much you can reinvest without starving operations.

Revenue is not cash flow. Unsold inventory cannot pay rent.

5. CASH FLOW REALITY

This is where many resellers collapse: Revenue is not profit; Profit is not cash flow; Inventory ties up capital; Seasonality impacts demand; Fixed costs do not pause during slow months (January, February, & March)

According to data from U.S. Small Business Administration, insufficient cash flow is one of the primary reasons small businesses fail. You can be selling consistently and still be losing money if margins do not cover fixed costs.

Build:

• 3–6 months operating runway

• Monthly fixed cost clarity

• Margin discipline

6. CUSTOMER EDUCATION AND BRAND POSITIONING

If you try to sell everything to everyone, you will struggle.

Define:

• Your niche

• Your ideal buyer

• Your price tier

• Your quality standard

You can't compete on price alone. Compete on trust and curation.

Educate your buyers:

• Fabric differences

• Construction quality

• Era significance

• Sustainability value

  
  

The goal is not one-time transactions. It is repeat customers. It is also about building trust and community.

7. LEGAL AND OPERATIONAL BEST PRACTICES

Professionalism protects longevity.

Ensure:

• Proper business registration

• Sales tax compliance

• Expense tracking

• Clear return policies

• Insurance if operating physically

Ignoring compliance can erase profits quickly.

8. BURNOUT PREVENTION

Creative entrepreneurs underestimate labor.

Batch Your Work

• One day sourcing

• One day restoration

• One day pricing

• One day merchandising

  
  

Track Labor Hours

If you do not measure time, you cannot price correctly.

Set Intake Limits

More inventory does not equal more profit. It often equals overwhelm.

Systems will reduce stress.

The Business Framework Most Resellers Ignore

If you remember nothing else, remember this:

• Set margin targets.

• Track inventory turn.

• Value your time.

• Monitor cash flow.

• Build systems.

Reselling is not just about finding gems. It is about running a retail operation with discipline.

The secondhand market is growing. However, growth does not guarantee survival.

Data, structure, and clarity do.