Sunayana SubudhiHave you ever sat down on a Sunday afternoon with a thought in your head of opening a thrift store via social media networks and searched up for #thriftstoreindia or #thriftindiafashion on Instagram just to find out that there already exists around 118k posts and 19.4k posts respectively made by the stores who are already a step ahead of you in the “Thrift Business”?
If your answer is No, then for the next few seconds while you scroll down on this article, you will be gaining the required set of information regarding the rise in thrift culture in India and consignment stores selling treasures without burning a hole in your pocket.
But if your answer is Yes, then you might want to scroll down this article as well just to find out the legalities that run around this subject and how so-called thrift stores have been doing it wrong all this while.
It’s seen that there is a drastic rise in the usage of the term ‘Thrift Stores’ & ‘Thrifted Clothes’, amidst the Covid-19 pandemic situation. This noticeable upsurge of thrift culture in India can be for varied reasons but it is seen mostly because of the urge to stay updated with the trends that are often set up by fast fashion brands on a global basis. And it’s no surprise that the protagonists of the said dynamics are mostly the Millennials and Gen Zs. It’s 2021 and what the world is experiencing is a paradigm shift in consumer’s buying behavior, from buying apparel when in need to buying apparel one might later need. This kind of perspective has allot to do with how people of this era are trying to understand and create their personal style on the basis of their body shape, taste in art, inclination towards a particular aesthetic that is relatable to them as an individual and in order to maintain that what they are doing is trying to enhance and invest in fashion that is readily available irrespective of seasons, that is sustainable and that dose not cost them a fortune. After applying all these filters, what comes to rescue is basically the acceptance of the age old western concept of “Thrift Culture”. If I had to define thrift culture, then i would go about it as the procedure where individuals invest in owning/buying pre-owned clothes(that can be at times vintage and one of it’s kind), jewelleries, accessories and footwears often on huge discounted rates that serve the purpose of sustainability, easy on pockets and a quick doorway to upgrade an individual’s wardrobe that would have otherwise ended up in the landfills causing grave effects on the environment. It’s been long that fashion has been narrowed down to be defined as something seasonal in nature but with today’s wok audience that drive the fashion market, have actually made it quite obvious with the rise in demand for investing in thrifting items that even tho the items that are supposedly termed as out of fashion and no longer made by many high end brands are often searched for in their thrifting quests and bought by these individuals keeping in mind that these items would make them appear more in fashion.
So stick with your Sunday afternoon thought of opening a consignment store for selling second-hand apparel and be a part of the Thrift Community. Yes, you heard me right, consignment store it is. Old habits die hard, so be ready to hear certain individuals call Consignment store and Thrift Store as though they mean exactly the same thing. Yet, you will not, particularly after you’re sure about the distinctions in how these two elements work and what they sell.
Looking into the Technicalities of Consignment and Thrift Store
If we had to see the nomenclature of classification in the retail segment of industry as a tall pile of clothing then the “Consignment Store” would be placed at the top and below that will be placed the “Thrift Store”. So when seen from a technical point of view, people have sure adapted the thrift culture but what they are missing out is coining of the term ‘consignment store’ with that of it’s word cousin i.e. ‘thrift store’, interchangeably.
Consignment stores are basically a sort of resale shop that shows merchandise for a level of the deal cost. In this retail model, the owners acquire things and get compensated a specific sum after the product sells.
Mostly consignment stores are always for profit i.e. these types of stores sells second hand clothing, accessorize, books etc for making a profit for their own pockets.
On the other hand Thrift stores are donation based. There is always a difference in motive in case of Thrift stores. If we go by the dictionary meaning of it, these stores are often mostly non profit ventures i.e. stores who sells second hand clothes, house hold goods for raising funds let that be for support of a cause or organization or ministry etc. There came up India based then e-thrift store, namely Bombay Closet Cleanse, who collaborated with NGO namely Karkhana.io for donation of 100% of their sales for helping with the production and manufacture of safety instruments for doctors who were helping in combat the Covid-19 pandemic situation.
Looking into the Legalities required for running your E-Consignment Store
In a world where everybody is going digital, it is assumed that most of us already know about the selling of goods and services via social media networks but what most of us don’t give a thought about is the legal requirements that need to be fulfilled for hassleless sale of second-hand clothing on such platforms.
- Registration of E-Consignment Store as a business entity-
The business of an E-Consignment store can be carried out in form of a Proprietor or a Company or a Partnership Firm. If the business form chosen is a Proprietory business then it would be best suggested to register the business as an MSME and check if one has to be registered under GST.
- Is there a GST registration required in case of E-Consignment Store?
It becomes quite obvious in most of the cases that an e-consignment store running on social media platforms would be selling Pan India and few cases where it would also be selling outside the country. As every business is required by the GST laws to be having done it’s GST registration if they are making a taxable supply of goods and services with an annual turnover of 40 Lakhs and 20 Lakhs respectively. So the answer would yes even an E-Consignment store would be required to have GST registration for selling second hand apparel online.
- Complying with the filing requirements under GST Laws-
According to the GST Laws, a registered person should file monthly or quarterly returns depending upon the turnover. The GST return filling basically requires the business to have a record of sales and purchase made by the business. Since, an e-consignment store cannot for the most part have a robotized data set which could give these data to meeting the filling prerequisites. One must without fail put a recording instrument to record the deals in order to make the information available to document the material returns precisely and on schedule.
- Filling and outlining the income in the ITR–
Just like any physical business store, e-consignment stores (as they are also engaged in business) require to form accounts of their income and expenditure, evaluate their taxes to be paid and through filing of ITR , outline the same.
- Prepare and maintain the business records of the E-Consignment Store-
As seen with time, it can be said that many online businesses don’t record, maintain and preserve their books of accounts. But doing that not only has landed them into legalities but also did not help them much in striving through in their respective businesses. So it would be appreciative and suggestive enough if you keep hold of the records of books of accounts of your e-consignment business store.
Conclusion
With the current statistics, it can very well be put out there that the thrift culture has definitely fascinated Gen Y and Gen Z. With too much on the plate being served, the market audience is often missing out on the legal and the technical side of entering into the fashion business industry. So the least they can start with is, rightly coining their own business.
