Information on How to Start a Consignment Store
A consignment store is a specific type of second-hand or thrift store. Instead of buying most of their merchandise wholesale, consignment store owners don't pay for most of their inventory up front, and instead procure items from clients who are looking to sell them. The clients don't get paid until their item sells, and the consignment store keeps a certain percentage of the profit. In order to grow a successful consignment store business, there are several things you can do.
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Instructions
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Choose a specific niche for your consignment store, such as designer women's clothing, kid's clothing and accessories, formal wear or bridal gowns.
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Write a business plan, including the following details: information about competing consignment and thrift stores; public relations strategies; marketing and advertising plans; five-year expense budget; five-year profit projections.
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Obtain the licenses and permits needed in your area to start a retail business, such as a resale permit, Employer Identification Number, assumed name certificate or sales-and-use tax permit.
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Pick a venue to sell your inventory, such as a brick-and-mortar store, Internet auction website or an e-commerce store. Brick-and-mortar stores are traditional, and will make it easier to obtain merchandise, as customers can simply walk in and offer items for consignment.
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Develop a consignment contract. This document should include the percentage of each sale your business will retain and what you will be payed out; how long you will keep merchandise up for sale; what happens in the event merchandise is ruined or stolen before it is sold; what types of merchandise, labels and quality you will accept.
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Advertise your need for consignment items by placing ads in community newspapers and on classified-ads websites. Once your store is open, customers will come in more regularly. In addition to finding items for consignment, consider shopping at estate and garage sales to build your initial inventory.
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Organize your merchandise effectively and logically, ensuring your store is easy to navigate. If you're starting out online, ensure your website is attractive and that your shopping cart software is easy for the average customer to use.
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Promote your consignment store. Launch a promotional blog or website, place coupons or fliers in complimentary businesses, such as beauty salons and accessory stores, and place ads in local print and online business directories.
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