Sue Ryder Care is offering to supply cheaper wholesale goods to small businesses that complain they are being undercut by charity shops selling new products.
The charity wants to work in partnership with smaller traders so that both parties can profit.
It says it can provide new goods - dolls' houses and musical instruments in particular - at far more competitive prices than other suppliers because it buys directly from the producer.
"Smaller retailers have to go through a couple of wholesalers to get to the same point that we do directly," said Alan Hodges, director of retail at Sue Ryder Care. "We would cut out all of the middlemen."
Hodges said that, by minimising the supply price, Sue Ryder Care was able to sell the same products as other well-known retailers but at 50 per cent less. He said the charity would be pleased to help smaller traders compete in the same way.
"We're very happy to operate as wholesalers to these smaller traders," he said.
The charity hopes small businesses will take up the olive branch after the Forum of Private Business told the Government last week that charity shops selling new goods, in addition to donated items, were undercutting them. The forum said that charity shops should no longer receive tax breaks so that high-street businesses could compete on an equal footing.
"Small businesses are becoming increasingly frustrated with the new-style charity shop chains, which are actually more like businesses with the buying power of major retailers," said Victoria Carson, campaigns manager at the forum. "The line has become blurred. Many charities, such as Oxfam and Sue Ryder Care, are now competing aggressively in the commercial marketplace."
Oxfam said it believed the forum was wrong to point the finger at charity shops when large supermarket chains monopolised a far bigger chunk of the market.
A spokeswoman said: "Charity shops make up 2 per cent of the retail market. Are they really the problem?"
The initial signs are that Sue Ryder Care's proposal could be one way of breaking the impasse.
A spokesman for the forum said: "This is a very exciting proposal and one that we would very much want to put to our members. We appreciate that this is genuinely charitable and we would like to look at the proposal in more detail."