Business Overview:

If you love high fashion and low prices and would like to offer that combination to others, you should consider learning how to open a consignment shop. How many times have you given clothes away because they didn’t fit anymore or your tastes had changed? So many people have had the same experience, which is why consignment shops selling gently worn clothes are so popular. When you start thinking about how to open a consignment store, you may wonder where to get your initial inventory. You need to have a fairly full stock before you first open your store, and that’s the first challenge you will face with this business idea. It’s an easy one to overcome, however. You can find inexpensive used clothing at other consignment stores, garage sales, rummage and tag sales, on eBay and at clothing fairs. There are many details to be attended to when figuring out how to start a consignment business so it’s a good idea to have a business plan. This plan will outline who your target market will be, how many employees you will need to hire, if you will buy a franchise, etc. Another detail for you to iron out is what percentage of each sale you will offer to your consignees. If you buy a franchise, these details will be all spelled out for you. If you don’t buy a franchise, you will need to determine these factors for yourself as well as secure items like clothing racks, a cash register and display cases. You can find many of these items at auctions and garage sales. While opening a consignment store will take a bit of work up front, once your stock is in place and you have spread the word, you will have consigners lining up to work with you. The great news is that many of the same people that will bring you clothes to sell will also stay to shop.

A Day in the Life of a Consignment Shop Owner:

This article brought to you by Business Ideas! If you enjoyed this article, make sure to subscribe to the Business Ideas Newsletter to get ideas sent straight to your email inbox.You will begin your day by making sure your displays are in order and that items are priced correctly. Then you’ll want to make sure your store is clean and your staff is in place on time. During the day you will be dealing with customers bringing you inventory. You’ll need to negotiate pricing with them and display the clothing appropriately. You will also work with customers wanting to buy clothing. At the end of the day, you’ll go through your inventory to make sure everything is in order. You’ll then want to be sure to record all the day’s transactions in your finance software or to have your bookkeeper do that for you.

About Your Customers:

Your customers will be individuals looking to sell their clothing items in your store (for a percentage of the profit) and individuals looking to buy clothing items in your store.

What You Need to Start:

• Business plan
• Marketing plan
• Storefront
• Clothing
• Clothing racks and hangers
• Cash register
• Sales staff
• Computer with finance software

The Good:

• Once everything is in place, running a consignment store is relatively simple.
• You get to work with people who are happy to be in your store.
• You’ll have your pick of the some of the finest clothing available—at a fraction of the original retail price.
• Watching people get a good bargain is very rewarding.
• Being your own boss means you have freedom to leave the store when you need to.

The Bad:

• Getting everything in place initially is quite time consuming.
• The hours can be long, especially in the beginning while you’re training your staff.

Resources:

• The Association of Resale Professionals
• Bureau of Labor Statistics on Clothing, Accessory and General Merchandise Stores
• Wikipedia on Consignment

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