Ukay-ukay has unarguably become a very important part of the Filipino fashion culture, and its immense impact on the style of people living in The Philippines can generally not be exaggerated. The Ukay-ukay model of finding fashion items has provided an sustainable, economical, and exciting way of shopping for clothes
One of the best things about the Ukay-ukay industry is that it caters to the needs of millions of people, regardless of their location and economic or social status. Thinking of starting your own Ukay-ukay business online? We have just the right recipe for success prepared.
What is an Ukay-Ukay Business?
The term, Ukay-ukay, is derived from the Filipino word ‘Halukay,’ meaning ‘to dig,’ or ‘to look through.’ As a terminology in the Philippine fashion sense, Ukay-ukay refers to second hand items, the act of buying them, and second hand markets where they are sold at.
This Ukay-ukay business has been flourishing in The Philippines for many ages now, kicking off initially in the early ‘80s. The United States and other countries in Europe were shipping second hand apparels to the country as a form of charity. Most of these donations would eventually be sold at bazaars and street markets, thereby birthing the wave of thrift stores that would soon start springing up everywhere.
As at the 1990s, the second hand fashion industry had established a strong foothold in the country’s economy and the Ukay-ukay culture was fully planted. From the late 2000s to the present day, Ukay-ukay businesses have grown in popularity with several innovations making their way in, one of which is the launch of Ukay-ukay stores on the internet.
How Much Is The Capital For Ukay Ukay Business?
Just like almost every other business enterprise, how much capital is needed to start a Ukay Ukay business depends on the scale you wish to start on. Some business owners start small, others can decide to start on a large scale, and thankfully, the Ukay-ukay business is one that is flexible and budget friendly. That is, whatever your intended capital is, there is always a level of entry.
However, to put things into numbers, anything between 10,000 to 90,000 pesos is a fair capital to start with. We will make some further mentions on this, later on in this guide.
Why Starting an Ukay-Ukay Business?
As the general fashion industry evolves, so does the Ukay-ukay market, continually reflecting the resourcefulness, inventiveness, and the culture of quality clothing that the Filipinos have. More than ever, business experts have identified the Ukay Ukay business as one of the most favorable and low entry businesses to start in 2024.
If you still can’t find an answer to why starting ukay ukay business is a great idea, below are three reasons that will change that:
Ukay Ukay Business Profit
One of the biggest perks of Ukay Ukay businesses is the huge margin profit that comes with it, and that is thanks to the significant reduction in the cost of each second hand item. This allows you to offer competitive prices that will attract customers, while also making good money for yourself.
Low Startup Costs
The costs of starting an Ukay-ukay business are significantly low. The market is already an established one, so it does not require entrepreneurs to pump in an insane amount of money before they can get it started. Most of your capital will be fully invested into purchasing used clothing bales, and as the volume of your purchase increases, you get to negotiate even better deals.
Sustainability and Eco-Friendliness
Starting an Ukay-ukay business is ideal for the environment. By keeping manufactured goods in the market and letting them find new owners, you will reduce a great amount of environmental pollution and resource depletion. The waste that would have been gotten as a result of the destruction of these second hand items is avoided, and the resources that could have been used to manufacture new ones are saved.
Step #1: Research and Planning
Before we get into the process of how to start Ukay-ukay business online, we must first make a conscious attempt to study the landscape of the existing market, especially if you are new to the business.
Carrying out extensive market research and planning is an essential step that determines how solid the foundation of a business will be. It involves taking time to understand the market terrain by studying your competitors, target audience, and the wider second hand retail landscape.
Market research helps to determine what pricing strategies will work best for you. When you invest time into research, you’re not just creating a feasible business plan, but also laying the foundation for the success of your business. Research basically involves providing answers to questions like:
- Who are you selling to?
- What brands do they look out for more?
- Where do they like to shop?
- How often do they shop for new items?
- Do they move with trends or more vintage style?
- What is their price point?
These answers provide solutions to most hurdles you will face during the course of running your ukay-ukay business.
Step #2: Setting Up Your Online Store
The next step is to set up your online store on a digital marketplace. These websites usually will not charge you anything to start ukay-ukay business on their platform, although you might be required to pay if you wish to enjoy some features. Let’s take a look at some of the platforms:
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Shopify
Shopify is the most popular e-commerce platform that lets you host your Ukay-ukay business on its servers, with the aid of the Shopify website builder. You can manage your sales, promote your goods, and facilitate payments from anywhere in the world right on the platform. Click here to set up your store.
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WooCommerce
WooCommerce is an open-source platform that business owners can use to build their own e-commerce store. Using this platform, anyone can turn a regular website into an online store, a fully functional digital store, with necessary features like privacy protection, online payments, business email, etc.
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Etsy
Etsy is a world renowned online marketplace where sellers can create their own stores and list items on. The interesting thing about Etsy, compared to the two other options mentioned, is that Etsy focuses primarily on thrift and handmade crafts. As a result of this, your Ukay Ukay business will be in the ideal environment for thrift shoppers to find your store.
Step #3: Sourcing Ukay-Ukay Clothes
Finding the right source for the Ukay Ukay clothes in your store is as important as finding customers to sell to. Your online store is the bone of your business while the Ukay-ukay clothes are the meat. Bear in mind that wherever you sort from, it must be top quality.
Where to Source Ukay-Ukay Clothes
So where can one get the best bale for ukay ukay? There are a number of options to source Ukay-ukay clothes from, the most common being local markets and Ukay-ukay suppliers.
- Local Markets
You can find ukay-ukay clothes in local markets all around The Philippines, some of which are concentrated all over Baguio City. Baguio City is often referred to as the “Ukay-Ukay” capital of the Philippines due to the number of shops that sell second-hand clothes in areas such as Harrison Road, Session Road, and Hilltop. Other places you can find ukay-ukay local markets include Banawe, Cubai, and Anonas, all in Quezon City. Sourcing from local markets is ideal for people who have very little capital.
- Ukay-ukay Suppliers
Ukay-ukay suppliers are the backbone of the whole second hand clothing market because they make things happen. If you prioritize your profit margin, then sourcing from Ukay-ukay suppliers is more ideal. The reason for this is that the cost per item bought from a ukay ukay supplier comes at a cheaper rate, giving you the leverage of setting a sales price that works best for you.
Inspecting and Selecting Ukay-Ukay Clothing Bales
While sourcing for second hand clothes, you must inspect the Ukay-ukay clothing bales, and ensure that your chosen styles are selected. The reason for this is that you already have a target audience that you cater for, and anything other than that might affect your ability to retain customers.
Furthermore, when you are inspecting a bale of Ukay-ukay clothing, you’re looking for confirmation that the clothes are not in bad condition, or to make sure that they are what you requested. The best way to avoid any of these being the case is to source your Ukay-ukay clothing bales from a supplier that lays priority on the quality control of used clothing bales in their factory.
Step #4: Pricing Strategies
One major challenge that Ukay-ukay store owners face is choosing the right pricing strategies to employ in their business. The process of determining the price that will be set for each item can be a really tasking one, using the competitive analysis model and profit margin considerations can help to ease things for you.
Competitive Analysis
Competitive analysis is like when you have to copy your class mate’s assignment, except in this case, you only need their work for comparison with yours, and not to straight up copy. Competitive analysis involves finding out the price your competitors sell similar goods as yours, then using this as a guide to set your own price. You do not want to go higher than their prices, because then, you would be giving them your potential customers.
Profit Margin Considerations
Profit margin consideration is another great pricing strategy that you can use. It involves calculating the costs of getting a particular item, then adding a percentage of the initial costs to it to give you your selling price. The percent added will be your ukay ukay business profit margin, and it can be applicable to all your Ukay Ukay clothes.
Step #5: Building Your Brand
Your business is your brand, and vice versa. Except you are only selling as a one time thing, if you intend to sustain your business for a long time then you must put effort into building a brand. The purpose of branding is to set your business aside from your competitors.
Firstly, your business needs a name. Pick a name that is easy to spell, pronounce, and remember. Choose a color scheme that will represent your brand, and this color scheme should be used in creating a logo for your business. You can easily create a logo on Canva
Step #6: Marketing Your Ukay-Ukay Business
Your ukay-ukay business online store will require some marketing if it is to reach the target audience. There are multiple ways you can use in marketing your Ukay-ukay business, but you must use one that your target audience are mostly likely to engage with. The following are some practical marketing strategies you can employ for your Ukay-ukay:
- Use social media platforms like Pinterest and Instagram to publish contents of your inventory, and gain organic engagements.
- Pay for social media advertising like Facebook and Snapchat ads.
- Partner with notable influencers who have a significant amount of followers online.
- Create a website and employ in-depth search engine optimization (SEO).
Tips For Online Ukay Ukay Business
Below are more tips for online ukay ukay business you can integrate to ensure a better success rate:
- When buying ukay ukay branded clothes, always buy in bulk as this helps you achieve the highest profit margin.
- As an online Ukay Ukay business, you must partner with a reliable local courier company to facilitate the timely delivery of customers’ purchases.
- Sign up for local trade fairs and fashion events, this helps your brand reputation in the second hand fashion industry.
- The primary driver for Ukay-ukay patronization is affordability, it is important to make your Ukay-ukay clothes as affordable as your expenses can allow.
Conclusion
To most shoppers, whether newbie or seasoned thrifter, Ukay-ukay stores are not just an opportunity to fill their closets, more than that, they are an avenue to discover rare fashion items. Most of these items would not have readily been available to shoppers, but thanks to Ukay-ukay businesses, everyone can have their pick.
