Calculating your cost of goods is an important part of managing any business, and it’s especially important when it comes to reselling thrifted apparel. By understanding your cost of goods, you can accurately price your items, track your profits, and make informed decisions about your business. Here are some tips for calculating your cost of goods when running a thrift reselling business:
Determine your cost of goods sold (COGS): COGS is the total cost of the items you sell, including the cost of purchasing or sourcing them, any repairs or cleaning that were needed, and any other related expenses. To calculate your COGS, add up the total cost of all the items you sold during a given period of time, such as a month or a year.
Include all related expenses: When calculating your COGS, be sure to include all related expenses, not just the cost of purchasing or sourcing the items. This might include things like transportation costs, cleaning supplies, repairs, and any other expenses related to preparing the items for sale.
Use a spreadsheet: One of the best ways to track your COGS is to use a spreadsheet to keep track of your purchases and expenses. You can create a separate sheet for each month or year and include columns for the date, the item, the cost, and any related expenses. This will make it easy to see how much you are spending on each item and how much you are making in profit.
Consider your time: When calculating your COGS, don’t forget to factor in the time you spend on your business. Your time is valuable, and if you are spending a lot of time sourcing, cleaning, and repairing items, you should include that in your COGS. You can do this by assigning a value to your time and including it as an expense.
By following these tips, you can accurately calculate your COGS and get a better understanding of your profits and expenses. This will help you make informed decisions about your business and ensure that you are pricing your items appropriately. It will also help you stay organized and keep track of your expenses, which is essential for any successful business.
One way to lower your cost of goods when reselling thrifted apparel is by sourcing your inventory from a wholesale supplier like America's Thrift Supply. America's Thrift Supply is a wholesale company that provides a wide range of gently-used clothing, shoes, and accessories at discounted prices. By purchasing your inventory from America's Thrift Supply, you can save money on your purchases and pass those savings on to your customers, helping to make your business more competitive and profitable.
In addition to the cost savings, there are a few other benefits to sourcing your inventory from America's Thrift Supply:
Wide selection: America's Thrift Supply has a large selection of brand name items that are carefully inspected and sorted for quality, making it easy for you to find stylish and in-demand items for your business.
Low minimum order quantities: America's Thrift Supply offers low minimum order quantities, making it easy for small business owners to get started.
Fast shipping: America's Thrift Supply offers fast shipping, so you can get the items you need quickly and efficiently.
Flexible payment options: America's Thrift Supply offers flexible payment options, making it easy to pay for your orders.
By sourcing your inventory from America's Thrift Supply, you can lower your cost of goods and make your business more profitable. This, in turn, can help you price your items more competitively and attract more customers. Whether you’re just starting out or you’re an experienced reseller, America's Thrift Supply can be a valuable partner in helping you grow your business.
One way to track your COGs (cost of goods) is to create a CSV file on Microsoft Excel. CSV stands for "comma-separated values" and is a file format that stores data in a tabular format, with each row representing a new record and each column representing a different field.
Here is an example of a CSV file that could be used to calculate your cost of goods:
1/1/2022,Thrifted sweater,$10,$2 (cleaning supplies)
1/2/2022,Thrifted dress,$15,$5 (repair costs)
1/4/2022,Thrifted purse,$25,$3 (transportation costs)
In this example, the CSV file includes four rows, each representing a different item that was purchased or sourced. The first column, "Date," lists the date the item was purchased or sourced. The second column, "Item," lists the name of the item. The third column, "Cost," lists the cost of the item. The fourth column, "Related Expenses," lists any expenses that were related to preparing the item for sale, such as cleaning supplies or repair costs.
To calculate your cost of goods using this CSV file, you would simply add up the total cost of all the items in the "Cost" column and add any related expenses listed in the "Related Expenses" column. This would give you your total cost of goods sold (COGS) for the period of time represented in the file.