Have you noticed how cash-for-clothing shops seem to be springing up in most parts of the country right now? If you haven’t heard of them already they’re basically shops that buy second hand clothing – by weight.

As far as I can tell they seem to be doing pretty well in the crunch. Nowadays, people would much rather get a few quid for their old clothing than throw it away or donate it to charity shops.

But, cash-for-clothes could be an interesting opportunity for entrepreneurs too!

Let’s look at some figures:

Cash-for-clothing shops typically pay sellers around 10p-50p a kilo (£100 to £500 a tonne) for clothing. Yet, apparently, wholesale textile traders will pay from £650 to £1,800 a tonne in bulk depending on quality.

So, even at the lowest prices it’s a decent buy-sell margin… and in the extreme that margin can be huge!

In fact, one entrepreneur managed to build a £4m turnover business buying/sorting/selling used clothing from local council clothing recycling bins!

Now, that’s just for buying and reselling clothing in bulk. Here’s an idea for refining this opportunity which means you could make higher profits, even by handling much lower volumes of clothing:

You could probably make a lot more by picking out the good quality stuff and selling it on individually to second hand/retro shops on a wholesale basis. Maybe try export – which is what happens to a lot of donated clothing, or retail the clothes in your own shop.

Best of all, this could be a perfect sourcing opportunity for eBayers! This would mean buying and selling in lower quantities but for much higher margins, i.e. more practical as a small biz opp. Imagine being able to buy good quality, designer clothing items for a few pennies by weight and sell them on to eager buyers.

In my opinion the cash-for-clothing shop model isn’t ideal – the overheads are far too high. It would probably be much better for an operator to rent a town/village hall/community centre in a different place each week/month.

Promote your event using local ads and leaflets and ask people to bring in their old clothing which you’ll buy for cash. Then simply set up a regular buying round.

Like I said this could be really timely biz opp for right now. Charity bag collections have had a lot of bad press and in the crunch, people are more interested in making a few pounds where they can. Add to that the fact that more people are interested in buying good quality used clothing and you could have a winning opportunity here.