The main sales channels for used clothing are not limited to recycling plants. Besides sorting plants that wholesale by the ton, used clothing in good condition can go to urban and rural second-hand clothing markets, migrant worker markets, and street stalls; overstock with tags still attached can be sold via livestreaming; components like copper zippers, fur collars, and bra foam can be dismantled and sold; premium autumn/winter clothing is bought by the piece. Collected clothes must be sorted by destination, otherwise they may be rejected by recycling plants if rejected items exceed 30%.

Key points

  • Rejected items refer to clothing categories that recycling plants do not accept. When they exceed 30%, recycling plants generally will not take them. Shredding them before sale can increase the selling price.
  • Used clothing in good condition can be sold by the piece at urban and rural second-hand clothing markets, village and town clothing stores, and migrant worker markets, with gross margins far higher than the per-jin purchase price.
  • Copper zippers, fur collars, bra foam, down jackets, and other components have dedicated purchasing channels, mostly priced by the ton, by the strip, or by the piece.

After the used clothing recycling industry was exposed in April 2024, a large number of newcomers entered, attracted by the low barrier to entry and low startup capital requirements. But whether one can grow after entering depends on whether sales channels are opened up. Many entrants focus only on recycling plants as the single outlet, while in reality the downstream destinations of used clothing are quite dispersed.

Recycling plants are the basic outlet. Collected used clothing is usually first sold to sorting plants, which bale and sort it for export. Not all clothing is accepted; categories that are refused are known in the industry as "rejected items"—clothing that recycling plants do not want and overseas markets do not welcome. When rejected items reach 30% or more, recycling plants often refuse the entire batch. Although there are factories that specifically buy rejected items, the prices are low and sorting is troublesome, so most recycling plants are unwilling to deal with them. To increase the selling price of rejected items, shredding them before sale can yield considerably higher profits.

Urban-rural fringe areas and second-hand clothing markets are another route. Almost every city has a second-hand clothing market, where mostly good-condition, new-style used clothing circulates; they can also be supplied to village and town clothing stores and migrant worker general markets. The original text gives an example: a practitioner bought a batch of good-condition used clothing at 0.6 yuan per jin, negotiated with a local migrant worker market owner to sell at 10 yuan for two pieces, sold out in three days, and earned over 5,000 yuan. Many cheap clothes sold at street stalls and from small trucks are also bought for a few mao and resold for several yuan or even dozens of yuan per piece.

Component dismantling and resale is an easily overlooked high-profit segment. Copper zippers on pants can fetch 15,000 to 30,000 yuan per ton on the market; fur collars from clothing can sell for 15,000 to 20,000 yuan, or by the strip at 3 to 15 yuan each, while the purchase cost is less than one mao per strip. Bra foam is about 9,000 yuan per ton, down jackets can be sold by the piece—one bought for a few mao can sell for at least a dozen yuan, multiplying the profit dozens of times. Such categories all have dedicated buyers.

Overstock and premium items follow the by-the-piece route. Overstock refers to clothing with tags attached, unopened, indistinguishable from new clothes, but recycling plants generally do not accept them; the more profitable among them are online hit categories such as underwear, children's clothing, loungewear, and lingerie, which some practitioners already sell via platform livestreaming. Premium items refer to used clothing that is 70-80% new, mainly autumn/winter wear, including sweaters, suits, denim jackets, woolen coats, leather jackets, dresses, etc., bought by the piece by dedicated buyers.

From an industry perspective, the profit level of used clothing recycling is not determined solely by the purchase price, but by whether different categories can be sorted into corresponding downstream channels. The same goods, priced by the ton through recycling plants versus sold through component dismantling, overstock livestreaming, or premium by-the-piece sales, can see revenue differences of dozens of times. Price and export destinations themselves constitute the real barrier to this business.

Source: What are the profitable ways for used clothes? · Originally published on 2024-12-20