How to Start a Consignment Store

Consignment stores are becoming increasingly popular as people seek to gain extra cash from selling items they no longer use. With proper planning, you can start a consignment store that is the talk of the town.

Instructions

1. Understand how a consignment store operates. Many people confuse consignment stores with thrift stores. Consignment stores enter into contracts with people selling items and receive a percentage of the item's sale price. The consignor does not typically receive payment for an item until after it sells. Items are carefully examined for deficiencies prior to being accepted to ensure a sale is possible. The quality of products collected directly affects the future of the consignment store.

2. Complete all required paperwork. Obtain any needed business licenses or permits through your local tax office. Write a detailed business plan for increased success. Design consignment contracts which specify the percentage the store will earn per sale and any time limits associated with consigned items. For example, some consignment stores donate unsold items after 90 days.

3. Decide your specialty. Successful consignment stores focus their energy into collecting and selling targeted items. Baby items, women's clothing, and furniture are just a few examples of specialty areas. Specializing also lets customers and potential consignors know what to expect from the consignment store.

4. Gather inventory and equipment. Yard sales and auctions are great places to find gently used merchandise and business related items such as shelving. Purchase sales tracking software to effectively manage the store. Be creative in your search to maximize your inventory and available cash.

5. Choose and stock a suitable location. Consider the customer base the consignment store is seeking. Avoid areas of heavy competition or crime. Create attractive window displays to draw customers into the consignment store as they walk or drive by. Keep the store shelves neat and aisles free of clutter.

6. Spread the word. Use fliers and word-of-mouth to ensure you have a wonderful grand opening. Consider offering refreshments or price reductions to draw the crowd into the store.

Tips & Warnings

• Network with other business owners to increase your store's awareness and potential customer base.

• Many consignment stores fail due to poor planning. Take time to plan and operate a successful business.

Resources

• Read this Article in Spanish