1.) Develop a Business Plan – A successful consignment business begins with a solid business plan. This plan outlines your vision and shows you what steps to take. The time you invest in creating this document will save you money and help prevent mistakes. According to Entrepreneur.com, a consignment clothing store requires $2,000 – $10,000 to launch. Plus, it takes two years to work out the kinks. Minimize these numbers by carefully considering your business structure, policies and consignor relationships. If you would like to learn more regarding financing and the return on your investment (ROI), read Build a Strong Consignment Business – Step 1.
2.) Research – If you aren’t comfortable talking to a direct competitor, at least browse their store and marketing materials. Then, contact similar businesses in other cities or states. Make sure there is a market for your store in your area. If the market is over-saturated or if a large, well-known shop will be in direct competition, you’ll need to brainstorm ways to make your store unique. If you would like to learn more about finding your niche in your market, read Build a Strong Consignment Business – Step 2.
3.) Acquire an Outstanding Inventory – The only way to become a successful consignment business is to attract customers with quality merchandise. If the doors open before the shelves are full, clients will hesitate to come back. Advertise for consignors in your local newspaper; do website searches and scour yard sales, auctions, estate sales, business liquidations and thrift shops for good deals. Become comfortable with bargaining and negotiating – these skills will be needed when interacting with consignors. If you would like to learn more about acquiring a solid inventory, read Tweaking Your Consignment Acceptance Policy and Inventory Management: Because You’re Running a Business, Not a Museum.
4.) Design an Attractive Store – Customers will form first and lasting impressions of your consignment shop based on the atmosphere and layout. No matter how well-stocked the store is, if it isn’t clean, bright, organized and attractive, customers will find another place to shop.Visit your favorite retailers and see how their merchandise is laid out. Must-have seasonal items are placed in the front of the store and every day products are in the back. Smaller items that cost less than $10 should be displayed next to the register. These impulse purchases can add up to significant sales each month. It’s also important to vary how you display your items. For more merchandising tips, read 6 Tips to Improve Store Design.
5.) Seek Community Support – It’s crucial to reach out to the community for support. If your storefront is located near other businesses, team up to offer cross-promotional services and discounts. Dry cleaner or repair shop customers will likely be interested in your shop, while your customers may need cleaning or repair services after purchasing an item. If the store specializes in formal wear, an aspiring jeweler could sell original accessories, or a children’s consignment store could partner with a photographer for a customer appreciation sale. To become a successful consignment business, you need to think outside the resale box and find every available opportunity to build your vision. To learn more about partnering with other shops in your community, read Pros and Cons of Teaming Up with Other Resale Shops.