As a consumer, getting items you need that are in excellent used condition at a much lower price than new makes good sense. Millions of Americans frequent consignment and thrift shops each day. Whether it is children’s clothing, adult clothing, furniture or house wares, thrift stores are increasingly popular. If you are thinking of becoming an owner of a consignment shop, it is important to know how to run a successful business. This involves more than just renting a space, hanging out a sign and accepting consignments.
Figure out your start-up costs. You may have a passion for vintage clothing, but you will need financial resources to get going. Use the sample calculator at bplans.com (See Resources) or sit down with a financial adviser, and be sure you have the money to keep your business going for at least a year without expecting any profit. As stated on bplans.com, few businesses of any kind make it past the two-year mark, mostly due to financial strain.
Have a detailed business plan. Determine what kind of consignment shop are you planning to start and how you will split the profits with the consignors. See if there is a market for this type of shop in your area. In the Wall Street Journal, a 2005 advice article on consigning suggested thinking very hard about the customers and clientele in your neighborhood when making these types of decisions.
Be selective. Stick with your specific niche in consignment, and be careful what you accept for your shop. As an article on consigning at thefreelibrary.com stated, the most successful consignment shops build their inventories carefully and selectively around their chosen niche/category.
Be friendly. As the Wall Street Journal stated, successful consignment shop owners are outgoing and build rapport with their clients, ensuring that these people continue to consign with them and purchase from them.
Most successful consignment shop owners do not have a lot of money invested in their inventory. Instead they split the proceeds of sales with the consignors.
Never start any business, including a consignment shop, without first having enough cash flow on hand.
- Jupiterimages/BananaStock/Getty Images