Money Management
November 11, 2024
Imagine getting into a business venture with just Ksh500 early in the morning, buying 10 second-hand clothing articles at Ksh50 each and flipping it into Ksh1,500 at the end of the day.
Sounds too good to be true, but if done the right way, there’s a lot of money to be made in the mitumba business.
The 200% profit (Ksh1,000) realised from the example above is not something that can be achieved in most comparable businesses. If you then double your daily capital input to Ksh1,000 and still sell each item at Ksh150, this then turns into Ksh3,000 gross from 20 items.
This can then be scaled even further to a point where you are actually importing your own consignments from China, Australia, Canada, or the UK - as opposed to buying from a middleman in Kenya.
However, as is the case with all roses, there are thorns, and with every business comes risks. The secret is taking calculated risks and accepting that losses are just part of the process/business.
When it comes to mitumba business in Kenya, you’ve probably heard of ‘kuchomeka’ which is simply slang for taking a major loss.
There are also several other funny tales that have done the rounds regarding the mitumba business e.g. a vendor opening a bale expecting baby clothes only to find football jerseys from the Chinese league or something along those lines.
The goal of this article is to demystify all the stories surrounding the mitumba business in Kenya by getting to understand what it takes to be part of this industry.
Let’s start by looking at what it takes to actually get in the business of second hand clothes in Kenya.
Despite being often overlooked, selling used clothes in Kenya has proven to be very profitable for most people. However, one must have effective strategies and the willingness to do things differently.
Let’s start with the basics.
There are several reasons why selling mitumba is more popular in Kenya than selling new designer clothes. These include:
To start a mitumba business in Kenya, you will need anywhere from Ksh1,000 to Ksh 500,000. It all simply depends on how much stock you are willing to take and consequently, how much risk you are willing to take on as well.
The capital required to kickstart a second-hand clothing business will vary depending on your location, type of bales, and business model (that is, hawking or selling in a permanent location) etc.
With Ksh500, you can visit markets such as Gikomba in Nairobi and Kongowea in Mombasa and hand-pick outfits one by one. Early morning visits are preferred as this is when most suppliers open a bale to get the good stuff.
Get a bale if your budget isn't too tight and you have at least Ksh30,000. One advantage of buying mitumba is that the more you buy, the less you pay.
Ladies' and children's clothing bales are the most in-demand in the market.
According to Grace Wambere, founder and CEO of Mitumba Chap Chap (a thriving community of individuals engaged in the mitumba industry), the majority of people ‘chomeka’ in the mitumba industry after opting not to carry out proper market research.
Going into anything blindly more often than not leads to pain and regret - this also applies in the world of selling second hand clothes.
You need to study your market, identify its needs as well as any gaps that can be filled by your business. For example, if your base of operation is in Limuru, importing a bale of swimwear wouldn’t be the smartest thing to do.
You need to be willing to bend to the rules and demands of your particular market.
Some items are seasonal e.g. warm weather clothing. All these need to be factored in prior to putting your money into the business.
Simply put, the ideal location to sell mitumba clothes is one that is strategic, with high-foot traffic and has your target market. This means that it could be online as well, where you can find clusters of communities with similar interests.
As a rule of thumb, your location will make or break your business and should therefore be treated with utmost care.
If you opt to sell your clothes in an open-air market, you will have daily county taxes to consider.
If you open up a shop or stall, you'll need a business permit.
The only free location is on social media platforms, but then again, we now have the Digital Service Tax to consider - it is however, yet to be applied to Kenyan taxpayers.
The ideal location should be extremely busy with a large number of potential customers. Consider a town centre, busy city/estate street, or a location near higher education institutions. The goal is to expose your product to as many potential customers as possible.
Once you have your preferred location on lock, it’s now time to secure a credible supplier.
With so many shady dealers in the mitumba market, it is highly recommended that you do your research and choose someone with a proven track record.
This can be done by joining Facebook groups focused on the mitumba industry where sellers and buyers discuss everything about the business and expose cons.
This way, you can easily get contacts and remain updated on the latest stock arrival.
It is always prudent to sample a few suppliers for starters, look at the price differences, check and see who among them has the best customer reviews or recommendations etc.
Okay, now that you know what you want to sell, where you want to sell it, and already found yourself a good supplier, it’s time to polish up on all the terminologies you’ll come across everyday in the world of mitumba.
Let’s start with the various mitumba bales available in the market.
Mitumba bales prices in Kenya vary depending on the type of bale, and your supplier.There are 5 basic types of bales that you need to understand
Grade D Bales - Clothes in Grade D bales have significant flaws that you may not be able to correct.
They are the cheapest mitumba clothes and do not make a good profit because you may be forced to sell some pieces at throw-away prices. This particular grade should be avoided if possible.
Grade C Bales - This bale contains mitumba clothing with minor flaws such as ink spills, small tears, faded colour, or leather dents.
Fortunately, most of these flaws can be fixed before hitting the market. However, these corrections come at a cost that eventually translates to a higher selling price which could in turn make it hard to sell such items.
Grade B Bales – Almost as good as Grade A but not quite good enough. The defects are visible and need some little work before taking to market.
The most expensive pieces in this particular grade retail for about Ksh200 to Ksh300.
Grade A Bales - These are made up of high-quality clothes that have been lightly worn and have few flaws.
You can get a good Grade A Bale with about Ksh25,000 – Ksh28,000 depending on the items you are looking to procure such as baby clothes, women’s clothes etc.
According to industry experts, when you buy this particular grade, you need to sort the clothes by quality.
You can then sell the best, also known as cameras, in your shop or online store as single pieces. The rest can then be taken to an open-air market and sold at a discount.
Crème Bales – As the name suggests, this is the best of the best when it comes to the types of mitumba bales in Kenya, the crème de la crème of bales if you like.
They contain new clothes which are made or bought, never worn, and consequently donated. As such, this bale is the most expensive. You will need at least Ksh30,000 or more to get one for yourself.
Fagia - These are the remnants of a bale after customers pick most of the best outfits. The clothes are sold at throwaway prices to make room for a new bale.
Camera - These are the near-new clothes and the clothes of good quality. Second camera is just a grade below this one.
Now, pay close attention as this may not immediately make sense but it should in the end.
Let’s say you get your hands on a bale of Grade A kid’s clothes at Ksh20,000 (hypothetically).
When it comes to pricing, most people just end up dividing this buying price with the quantity of the clothes.
For example, if the bale had 200 pieces, it means that they could sell the items at more than Ksh100 to make a profit. This is mathematically correct but it would also be a very bad business move.
Instead, they should select the camera clothes, then pick the second camera, then the third bunch etc and price them differently.
As an example, if that particular bale had 50 first camera pieces, they could price them at Ksh 400 per piece and thus recoup their entire cost of securing the bale, any sale after that is just pure profit, simple, but effective.
Now that we have a basic grasp of the mitumba business in Kenya, it’s time to look at the actual business environment and any laws that we should know about.
According to data from the Kenya National Bureau of Statistics (KNBS) the value of mitumba went up to Ksh9.2 billion in the first half of 2021 from Ksh5.1 billion in corresponding time in 2020.
The Kenya Bureau of Standards had in late March 2020, suspended the importation of used clothing after Covid-19 made its way into Kenya.
The government had previously backed down from plans to impose a total ban on second-hand clothing, claiming that doing so would leave local textile dealers at the mercy of market forces.
According to the government, maintaining the flow of these garments into the country will allow both importers and domestic producers to remain in business.
On the other hand, the Kenya Association of Manufacturers has previously called for punitive duty to be imposed to discourage increased imports of new clothes sold at low prices in local retail stores.
However, as it stands, the mitumba business is now back and thriving as it was prior to the Covid-19 imposed ban.
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