Filipinos have become enamoured with ukay-ukay stores because everyone loves cheap clothing deals. The popularity of these stores lies in their ability to provide branded clothes at a fraction of the price. It is the perfect solution for affordable shopping.
But while starting an online business may seem risky, particularly an online ukay-ukay store, we’ll show you how to be ahead of competition with these helpful tips.
What is Ukay-Ukay Business
Ukay-ukay stores are known for their large piles of pre-loved clothes that people must dig through to find a good deal. Shopping at these stores in the Philippines is a completely different experience from any other kind of shopping.
These clothes may undoubtedly come from other countries and are often very cheap. Still, many Filipinos love shopping at ukay-ukays because of the thrill of finding unique and often very stylish clothing, while it is also a great way to save money on clothing.
Meaning of the word Ukay
Ukay comes from the Cebuano word for ‘dig’, and ukay ukay is therefore to dig or sift through a mound of clothes to find hidden treasures at a fraction of the regular price. It’s also similar to wagwag, which means dusting off a piece of clothing, or SM (segunda mano in Spanish, meaning second-hand), coined after a popular retail chain in the Philippines.
The Advantages of Starting an Ukay-Ukay Business
1. You are in control of your business
As the sole decision maker and the boss of your own business, you get to decide how you want to run this business. It’s an especially great online business for students who are new to the field of entrepreneurship as you get to learn on the job, without having to commit too much capital.
2. Calculating your profit is quick
Since you can compute your profit with every sale, keeping track of your margins is easy. That said, do expect customers to haggle, as it has become a culture to do so in the Philippines. And even on the internet, you’ll want to offer options for customers to negotiate and not lose that aspect of the business. That’s where loyalty programs and price bidding ecommerce platform features can help retain some aspects of this culture.
After all, everyone loves buying at a discounted price, and even better when you can do it discreetly without revealing your identity, or having someone staring at your haggling process with the store owner.
3. Meet people from all walks of life
While the emphasis is on selling cheap clothing, it doesn’t mean that those are your only customers. You’ll be surprised to discover that customers patronizing your online store do come from all walks of life, especially when vintage clothing is a trend now.
4. The business model is simple and easy to learn
But the best advantage of this business is that it is easy to pick up and doesn’t require any advanced skills. Moreover, there are many groups and online forums that you can take reference to, as there are many Filipinos who have succeeded in this business, and are sharing their knowledge and experience on these platforms.
5. You have the option to run your business from home
With an online store, you can also have the option to run this entire business from the comfort of your home. Unsurprisingly, the online selling business is popular among housewives, given its flexibility, and they get the chance to sell their pre-loved clothes online to earn a side income.
Since everything is online, you won’t even incur the typical operational cost of a traditional business, such as rent or employee salary. And if you adopt a dropshipping model, you don’t need to worry about inventory either.
The Disadvantages of an Ukay-Ukay Business
Despite the advantages, there are also disadvantages and it’s always good to consider these factors before deciding to venture into it.
1. It can be difficult to compete with big online retailers
Given that this is a business selling secondhand clothing, it’s difficult to compete with big online retailers who are selling new clothes at a fraction of the price. This is especially true if your thrift store is not well-organized and lacks a good selection of clothes.
2. It can be difficult to establish customer loyalty
Since customers know they can get great deals at ukay-ukays, they often do not feel the need to return. As a result, it can be difficult to establish customer loyalty, especially if you’re not offering competitive prices, poor selection of products, or your customer service is not up to par.
3. You may experience stock shortages
Since you are buying used clothes from different sources, it’s difficult to predict what kind of stock you will have at any given time. This can lead to frustration for customers looking for a specific item and feeling disappointed when you’re unable to meet their needs.
4. There is a greater chance of receiving stained or damaged items
Since these clothes are pre-owned, there is a greater chance of receiving stained or damaged items from your suppliers. While you may be able to find ways to fix these items and resell them at a reduced price, it can still be frustrating for customers who are looking for high-quality clothing at a discounted price.
5. High competition due to low barriers to entry
Since starting a ukay-ukay business in the Philippines has a low barrier to entry, experiencing stiff competition is inevitable. And with many competitors entering the market, it might lead to a drop in profit margins. Additionally, this can lead to saturation of the business, resulting in customers finding it difficult to differentiate one’s store from the others, leading to lower customer retention rates.
What You Need in Order to Start a Ukay-Ukay Store in the Philippines
All you need is to find a platform to build your online store. There are free online store builders where you can easily create a professionally-looking website for your business. The website will help facilitate your online selling so you can focus on the other aspects of the business, such as delivery, marketing and promotion.
When starting your business, it is important to consider how to offer savings on your products to attract new customers. You may also be able to convince current customers who are thinking of buying from a different ukay-ukay online store to switch to yours. Offering savings in the form of gifts is one way to consider.
Also, remember that you don’t need to spend much money to make a good impression. You can have a product showcase that is not as good as the ones in shopping malls, but it should look decent, where the products are in good condition. This is important because most Filipinos are careful with their appearance and do not want to wear something that looks old.
Things to Remember about Running an Ukay-Ukay Online Store
Focus on Existing Customers
Ultimately, you’re now in the reselling business, which means it is all about having regular customers who will continue to make repeated purchases.
Once you start to earn revenue either from orders, sales, or a new business loan ( an investor has given you more money), you should focus on customer service such as improving the overall website experience and offering products of better quality. Such insights can be gathered from customers’ feedback, so it’s crucial to set up a review section.
And if you encountered customers who are seeking refunds due to clothes that don’t fit? Be prepared to make such incidents an opportunity for customers to love you more without abusing your kindness.
Be Extra Nice to Your Suppliers
No matter where your suppliers come from, it is important to have good partnerships and remain cooperative with them. This means setting clear expectations for things like payment terms, delivery commitments, and so on.
For the majority of them, your ukay-ukay online store is an excellent way for them to penetrate into the offline to online business model. They want a partner that helps them reduce their learning curve and technical processes. By bridging this gap for them, it will help build trust between you and your suppliers, leading to long-term partnerships.
Build a Customer Database
When someone buys something from your store, you may want to get their contact details (if they allow it) and a record of their purchases. This way, you will know their preferred style and choice. Thus, when new stocks match their particular style, they will be the first people to know. In that way, they can call first dips to the new products before it is listed on your ukay-ukay online store. This can help to retain your customers as they feel more valued by such a gesture, resulting in more repeated purchase from them.
Remember, this is a business where you sell used clothes. It’s not as glamorous as a fashion shop, but you still want to offer the best customer experience. Thankfully with an online store, it’s easy to set up the right automation system.
Now that you know all about ukay-ukay businesses and how to start your own successful thrift store, what are you waiting for?
This type of online business is a great opportunity for entrepreneurs who want to be their own boss, set their own hours, and make a profit while doing something they love. With hard work and dedication, you can build a thriving ukay-ukay business that brings in customers from all over the Philippines.
Start building your own online store today!
Common questions about Ukay-Ukay business
Is it profitable to run an Ukay-Ukay business?
Yes, with the right strategies in place and some hard work, you can turn it into a profitable business.
Is It legal to Ukay-Ukay?
Yes, it is a legal business so long as you register and get the right permits.
What Type of Business is Ukay-Ukay?
Ukay-ukay is a retail store where secondhand clothes and goods are sold.
What are the features of a Ukay-Ukay business?
The features of a successful ukay-ukay business include proper planning, organised store front, good customer service, marketing and promotion.