Consignment stores sell items from consignors, who are usually individuals, for a share of the profits of the sale. A consignment store owner is responsible for attracting consignors to do business with, evaluating and pricing the items from consignors, attracting customers to purchase the items, then dividing the profit and paying the consignor. Consignment stores are also often called second-hand stores. Although some sell both new and preowned merchandise, most tend to focus on slightly used clothing. Consignment stores differ from charity or thrift stores (like Salvation Army or Goodwil) in that the items being sold are not donations, nor do the proceeds generally benefit any charity. The store's and the consignor's goal is to make a profit. Consigned goods are not eligible for a tax deduction in the same way that donated goods are.

Things You Will Need
  • Merchandise

  • Computer with internet access (for research)

  • Price tags

Step 1.

Attract consignors. Friends and family who have merchandise they wish to sell are a good start, and can help spread the word of mouth. Placing advertisements in local publications is also an excellent way to get started.

Step 2.

Set up consignment policies. Determine what percentage of each sale you will retain, and what amount will go to the seller. Let the consignor know when money will be available to her. Will you pay out once a month, once a week or immediately after the item sells? Set up dates and times when you will be available to evaluate merchandise. Make clear the condition and kind of items you'll be accepting for resale.

Step 3.

Decide what merchandise to accept. Some consignment stores resell a range of items, from clothing to electronics to kitchenware, while some are very specific—baby-items consignment or sports-equipment consignment. Only accept items that fit into the general theme of your store. If you don't think the item will sell—for whatever reason, even if it's in excellent condition—then don't accept it.

Step 4.

Determine the original retail price of the item. Check the item for tags (if it is new and has not been worn) or ask the consignor is he has a sales receipt.

Research prices online. If you cannot find the item at a retail site, check online auctions to determine the market for the item and a fair price, based on the current supply and demand.

Step 5.

Expect that most consignment items will sell for a minimum of 20 percent less than the original retail price. Even items that are new with tags should generally be discounted by 20 percent or more.

Step 6.

Determine the age and condition of the item. Some things hold their value better than others. Last-season clothing will drop in price significantly from the original retail value, while an antique vase may be worth much more than its original price. If you choose to accept or specialize in vintage items, make sure you are sufficiently experienced to be able to price them accurately.

Step 7.

Stay up to date with current market trends. This can help you accurately price, and decide what items to accept.

Step 8.

Have a sale if items are not selling, either due to overpricing or choosing inappropriate items for your market. Clearing out the old and bringing in the new will encourage customers to frequent your establishment more often.


Stock for the seasons. This is especially true for clothing and sporting goods. People buy skis and sweaters in winter, and surfboards and swimsuits in the summer.