How to Start a Consignment Shop

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If you are interested in starting a consignment or second-hand store, it is vitally important to think through every aspect and carefully plan before opening your doors. To give yourself the best chance for success, you want to follow some solid principles.

Research extensively before opening. Determine your target audience and the type of shop you want, whether ladies, children, furniture, family-style or antiques. Visit similar shops for ideas on every aspect of the business, from how to display to retail and resale costs. Also research on auction sites such as eBay to get a good idea of resale costs. Look up websites of designer labels for retail costs. Also check with local colleges or community organizations to see if they offer a two- or four-hour class on starting a business. With diligence and a little time, you will soon be a wealth of information to help grow your business.

Locate a place to rent or purchase. Do not go too high. You must be prepared to share all profits with your consigners. Keep this in mind when you are looking at the price. Thus, do not purchase the most expensive business on the busiest street in town until you get your feet wet for a few years and build both your business and clientele. Look around for a place that has plenty of space for an affordable amount. A house zoned in a commercial or multi-use zone is a great find for a consignment shop.

Purchase all items you will need to start your shop. Think not only of the big pieces, such as clothing racks and shelving but also the little items, like display signs to help the flow of traffic, footies to try on shoes, a place to sit for people who tire of shopping and more. Find good consignment software to help run your shop. Check out for its software and price tags. Check out stores you know may be going out of business for cheap display items such as jewelry counters, mannequins or clothing racks. Also, donation stores may have too many so see if you can purchase from them.

Build your clientele and your starting stock. For starters, offer your services to family, friends and co-workers. Pick up clothing and merchandise from thrift shops or estate sales that look great. Look into doing cheap marketing strategies such as printing your own fliers, brochures or business cards. Many companies offer cheap products to help promote your business. Hand out or post your materials wherever possible.

Write a contract to offer your potential consigners. Cover every aspect, including the time period you will sell the item, the consignment split (50/50 or 60/40), whether unsold items can be picked up or donated to a local charity and when and how the consigner receives payment.

Complete all necessary paperwork regarding property purchase, taxes, insurance, licensing and more. Check for state and local requirements on opening your shop. Become involved with a consignment association or with the local chamber of commerce.

Scrutinize the products you will accept for consignment. If you want to be successful, don't accept junk. The great perk is that all inventory will come to you from others, though you can, of course, also purchase items to resell. Donate items to charitable agencies that do not meet your standards or simply discard. Make sure your items have very little wear, no significant problems, no odor and are in good reusable condition. Ask yourself if you would purchase the item and for what price. Follow your gut. If you would not purchase it, don't accept it.

Make savvy decisions when pricing your items. A good way to do this is to expect to mark an item at 30 to 40 percent of the original retail price. Don't price yourself out of business, especially in a secondhand shop. Offer discounts after an item has been there a certain amount of time and clean and inventory frequently. A tidy shop will always be appreciated and revisited.

Never stop trying to improve your business image. Travel outside your area and scout out different types of consignment stores. Hold a "meet-and-greet" night at your shop with other business owners and agree to network. Think outside the box on how to attract more business and always remember that word-of-mouth advertising and referrals are free and will pay off.


  • Never hesitate to hire an attorney, accountant, interior designer or others to help. However, be smart and get references before paying anyone.


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