The 9 Steps You Need to Take to Start a Consignment Shop
Do you have an eye for quality clothes that other people don’t want? Then consider starting your own consignment shop so you can resell the best pieces of second-hand clothing at bargain prices and make some money while you’re at it. But before you dive right in, here are the 9 steps you need to take to start a consignment shop.
Do your homework
Consignment shops make it easy for customers to find affordable clothes and household items. Whether you’re looking for ways to make money or just have things around the house you don’t want anymore, here are the nine steps you need to take if you want to start a consignment shop in your town
Know what it takes to start a consignment shop in your area by talking with other business owners who have done so before you decide whether it’s right for your town. First, talk to lawyers and accountants that can give you insights into different legal issues regarding running such an establishment in addition to providing sound financial advice on how they handle everything from payroll taxes to setting up accounts with suppliers. In addition, speak with competitors about what works best at their stores and glean knowledge about important trends taking place now that could affect where potential buyers look when they seek out second-hand clothing.
Don’t mass produce
Consigners donate clothes and other items to consignment shops for the chance that their donated items will get sold. In return, the consigner will receive some form of reimbursement.
The idea is that you’ll offer people in your community an opportunity to sell their used or unwanted clothing instead of throwing them away or donating them directly. For most consignment store owners, this is where the real profit comes from because there’s often little or no cost associated with acquiring the donated clothing and reselling it for more than what was paid for it. It sounds easy enough but there are things you should keep in mind before opening your shop up for business.
Choose a strong niche
Not sure where to start? The first thing you need is to find a niche for your consignment store. Some things that might work are vintage, kids’ clothes, women’s clothing, and home décor. Consider what customers in your area need the most help with before starting up. Think about how much inventory you will have before you set out on this adventure and make sure you know the best way to organize it once it arrives. These are just some of the things that you will want to consider if you’re serious about starting up your own consignment store, whether online or in person! There are many ways to get started but take it one step at a time and don’t try too hard or get discouraged by new obstacles.
Create an eye-catching, appealing brand
Many people don’t know that selling second-hand goods is legal in the US. According to the 1964 Supreme Court decision, you can sell items for someone else as long as you’re not making any claims about their authenticity or providing warranties. That’s why consignment shops are perfect for those who need some extra cash without compromising on having quality products in their business. Consider these nine steps if you’re considering starting a consignment shop
1) Start by creating an eye-catching and appealing brand. There are many ways to go about this: take your favorite color and use it in your logo, have a slogan that reflects what your company stands for, etc.
2) Be sure to provide valuable customer service so customers feel like they’re receiving great value when they purchase from you.
Keep up with trends
To find success with a consignment shop, it’s important to start the business in a crowded market. For example, startups can consider neighborhoods with limited shopping options or off-the-beaten-path neighborhoods where boutique fashion thrives. Startups should also keep up with trends and ensure that inventory stays fresh. They might need guidance from local stylists for this type of market research, but it’s worth it in the long run! Once they have chosen their location, the next step is… To decide on how much to charge: If you are new to running your own store, starting prices at 60% of retail price could be a good idea. Another option would be using competitive pricing models like eBay or Amazon’s dynamic pricing system. But remember, these types of pricing models require keeping track of every item you buy so you can constantly monitor its price on these platforms
Offer both online and in-store purchases: It may seem like an unnecessary time investment at first but establishing your brand’s name in more than one arena will help increase visibility over time
Start a Consignment Shop in
Consider what type of business you want: If you know that you want your consignment shop to specialize in used clothing, antiques, or handmade products like crafts and candles, then start with those products. Otherwise, it may be wise to plan out the general area of your store before deciding on what product category. Check into what will make sense for your stores such as a certain population area or geographic location; go with something that is close by.
Target local markets effectively
Local markets are great places to try out your store and build up your customer base. First, scout out the competition and do some reconnaissance. Who has a store like yours? Is it successful? Talk to other people who sell at the market too and see what they think of their experience. Maybe you could even set up shop in someone else’s booth for a day just to test things out. Find out if there is enough demand for your type of business before you invest any more time or money into this idea.
Use photos as well as words
- Look for items that can be profitably resold.
- Set up shop and register for a business license.
- Inventory your shop, set prices, and create your storefront with eye-catching signage in order to attract customers.
- Spend time visiting popular local consignment shops in your area (or in similar areas) and get their advice on which type of inventory they sell most of – the more popular the item, the more likely you will be able to resell it!