Wednesday, 17 August 2011

How to Start a Consignment Shop

Consignment shops have started popping up in nearly every town across the United States. Whether they are selling clothes or furniture, sporting goods or household appliances, consignment offers a great way for people to buy and sell used goods, whether it is online or in a brick and mortar store.

Here are the basics of what you'll need to start a consignment store:

1) A business plan. Even a ten page business plan will double your chances of success. Your business plan should spell out what your market is like, what kind of competition you have, and what niche you will fill. It should specify your business structure, how many employees you'll need, and what your start up costs will be, as well as what your monthly overhead costs will be and how many months it will take for you to break even. You also need to write a basic marketing plan, and write a detailed resume for yourself and why you have what it takes to run a great consignment store. There are plenty of resources online for how to write a business plan, but that gives you the thumbnail sketch.

2) A great location.... that fits your budget. Writing your business plan will help you define your budget, but after you've got a figure you'll need to start looking around. A new consignment store is made or lost by its location. You want at least 100 square feet for even a closet of a store, and 500 is better. Most successful consignment stores are 800 to 2000 feet, but there are plenty of exceptions to that. Foot traffic and good parking is essential. It is a good idea to have a lawyer review your lease contract, just in case something goes wrong down the road.

3) A business license and possibly a reseller's license. Get yourself down to your local municipal building and find out what you'll need to be legal. This paperwork may seem like a pain, but you'll need it to get a business checking account. Even if you are starting your consignment store from your home, or online, you still need to get your business registered.

4) Business cards. You can get them printed online for $20 or less. Don't buy 10,000 of them to start... in a few months you'll know more about what you need on your business card. For now, just get 500 or so, and put your name, business phone number, email address, street address and your consignment specialty on the card. If there's room, you can tell people about the conditions under which you take new inventory (walk in anytime, or by appointment?) and what your terms are (50/50 split, or 60/40 in your favor?).

5) Equipment for your store. At the very least, you'll need a cash box and some racks and signage. To be taken seriously, you'll probably need a computer inventory system, plus a real cash register, quite a few racks and hooks and tags and bags and more. Hopefully, you made your start up costs list and equipment needs in your business plan, so you'll have your shopping list handy.

6) Inventory. This will be easier than you think. Almost any consignment store owner will tell you that getting inventory is not a problem. Place a few ads or let friends know you're taking inventory, and your store will fill up faster than you can believe. The real problem is picking stuff that will actually sell. That's a fine art, and most of your long-term success as a consignment store owner will hinge on it. Just keep practicing.

For More Detail:

Making Money at Home - Consignment Selling on eBay

Consignment Account