Thrift stores have their own special niche in the marketplace. Rather than offering brand-new or trendy merchandise, thrift stores sell previously owned goods at reduced prices. While thrift stores may not appeal to aspiring entrepreneurs interested in status or prestige, they do offer some key competitive advantages that can lead to long-term profitability.

Lower Cost of Goods Sold

Because thrift stores typically offer secondhand goods for sale, they can often sell their merchandise at lower prices than major retailers. In many cases, stores receive donated goods, providing the ability to offer even greater price reductions. Owners benefit by appealing to a specific segment of the market, including low-income individuals, students, families with young children, senior citizens on a fixed income or anyone else on a tight budget. Thrift stores can do especially well during economic downturns when consumers are looking for low-priced alternatives in an effort to save money.

Lower Cost of Operation

Operating costs are normally lower with thrift stores than other types of retail establishments, which can positively impact profitability. Customers expect a "no-frills" shopping experience so there is no need to secure a fancy building in a high-rent shopping mall or provide lots of additional services. Lower operating costs can enable owners to reinvest more of their profits in the business or spend more money on marketing the business if they choose.

Appeal to Social Conscience

Thrift stores often sell recycled or used goods, enabling owners to tap into the growing trend of social responsibility. According to USA Today, a 2008 survey conducted by Harris Interactive and eBay indicated that 70 percent of adults said they found it more socially acceptable to purchase used items than in the previous five to 10 years. Customers may also be attracted by the sense of satisfaction that comes from getting the goods that meet their needs without overspending.

Unique or Unusual Merchandise

Unlike other retailers, thrift stores do not depend on a standard distribution channel to supply them with merchandise. Instead, they receive their merchandise from a wide variety of sources, enabling them to offer a unique assortment of goods that changes frequently. Consequently, thrift stores attract shoppers in the market for vintage clothing or other unique items they can't find elsewhere. Thrift stores also appeal to collectors who are in search of rare items that may hold significant value.