How to Start an Online Consignment Business

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Thinking of starting a consignment business, but don’t want to deal with the stress of owning a physical store? Start an online consignment store. Since the majority of your products will be one-offs, you’ll need to ensure that your website is up-to-date by removing sold items the moment they sell and taking quality images of new merchandise the moment you get it. Good computer skills are a must.

Things You'll Need

  • Location
  • Business permit
  • Liability insurance
  • Good lighting
  • Website
  • Consigner contracts

Find products to consign that will do well online. For example, customers may be less likely to pay for consigned designer clothing if they can’t physically inspect it. Although used designer jeans do well on eBay, other high-end items may not. Check out fashion forums to find out what types of used items do well with online consignment stores.

Find a location for your business. Though your store will be online, you’ll need a professional and safe environment to meet with consigners and review their goods. Visibility is important and will save you money on advertising. If consigning high-end merchandise, lease space on the nicer or more posh side of town. You’ll need room for your office, racks to hold your merchandise and a well-lit area to take your pictures. Obtain a business license and liability insurance.

Create a small, well-lit photography studio within your office. Particularly with used goods, you’ll need to take high-quality images of your products. Customers who can’t physically inspect your products will want to ensure that there aren’t any stains or tears. Take pictures of the front and back of each item and good measurements. Purchase a mannequin and lighting for your photo studio.

Purchase a website for your online consignment store. Depending on your budget, you may elect to hire someone to help you create and design your site. Otherwise, you can research hypertext markup language and search engine optimization, which you will need to know to design an appealing site that can reel in traffic. You’ll need a domain name, store template, web host and shopping cart. Your web host may provide a domain and free templates. You can use PayPal or Google Checkout to accept payment. Ensure that your web host offers 24-hour support—if you have never owned a website, you’re going to need it.

Purchase racks, hangers, signature packaging supplies and tags for your goods, as well as office supplies for your consignment shop.

Create a system for accepting consigned goods and uploading them to your website. Until your studio is filled with consigned merchandise, you should consider accepting goods every day, at specific times. After you’ve built an inventory, you can choose to only accept items one or two days out of the week. At the end of each day, take pictures of your inventory and upload them to your site.

Create rules for your business. You’ll need a rotation schedule for markdowns, information on when you pay out, a policy on the brands you accept and rules about goods not retrieved by the consigners. Consider donating goods not retrieved to charity. Detail this information, including the charity's name, on your site. You’ll also need to decide what percentage to take on the goods. Detail all of this in an agreement form, which you will give to each consigner. Include this information on your website under the "How to Consign" section.

Contact fashion-savvy blog owners about getting your website listed on their blogs.

Tips & Warnings

  • You will be subject to self-employment or small business taxes. Visit the IRS website to find out how to calculate and pay your taxes.
  • Keep an excellent accounting system and detail all costs.
  • Contact UPS and FedEx for shipping quotes. Compare these to the USPS shipping. Go with the cheapest.
  • If selling high-end clothing, offer helpful tips on clothing repair or maintenance on your site. Discuss the latest fashion trends. Subscribe to online fashion magazines for the latest news.
  • Contact popular magazines like Lucky, Self or Shape about getting listed in an issue.

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