You've carefully weighed the pros and cons, done your research and you're sure that you want to open a prom dress consignment store. You know there’s a market and you’ve written a business plan. You’ve been networking with women’s groups and organizations that hold lots of formal events. Ladies all over town know they can make some money on their fancy dresses -- instead of leaving them to hang in their closets -- by bringing them to your consignment store. Now all that’s left is to get busy and prepare to open for business.
Things You'll Need
- Permits, licenses
- Prom dress inventory
- Display racks, fixtures
- Business cards
- Consignment agreement
Decide whether you are going to open a year-round store or a “pop-up” store. Open a year-round store if you strongly believe that the market potential is there for a sustainable business. Opt for a pop-up store that is only open for a short period to reduce the costs of a year-round operation.
Determine what type of business structure will work best, such as a sole proprietorship, limited liability corporation or a full-fledged corporation. Contact your State Department of Revenue to find out what types of filings and applications are required to legalize your business.
Start building your inventory before you even sign on the dotted line for a commercial lease. The longer you keep costs low, the better. Stock and store inventory in your home as long as possible.
Make advertising to those who have formal dresses they’d like to consign your first priority so you can build your inventory. Take advantage of low to no cost advertising media such as Craigslist and distributing flyers and business cards at schools, churches and established civic organizations to generate awareness of your consignment shop.
Develop a consignment agreement form. Work with agencies such as the Small Business Administration and SCORE (Service Corp of Retired Executives) to help draft an air-tight and legal document for you and consignees to sign.
Offer an incentive to consignees to build your start-up inventory, such as an extra percentage for a limited time. For example, if you plan to make a 30 percent share your standard, offer 40 percent during your first 30 or 60 days of business. Give new consignees a “Preferred Consignee” account number and offer them a discount on merchandise or additional percentage bonus points for each person they refer who brings in formal dresses to add to your inventory.
Purchase racks and fixtures by scouring ads for store closings and shopping only at wholesale retail merchandising display companies. Enlist the support of family members and friends who are handy and know how to turn a pipe into a dress rack so you can save money on fixtures and displays.
Work with local colleges to offer internships to students majoring in retail merchandising, marketing, advertising, photography and graphic arts. Leverage their skills to help create the look for your prom dress consignment store. College students are close to the age of your target audience and will be insightful to come up with visual treatments that will appeal to your market.
Create splashy, attention-getting signage for your consignment store. Make your window display the talk of the town. Do something classy one week and crazy the next. Generate buzz and excitement among the high school crowd and make your store the one everyone wants to take their formal dresses to for consignment.