What makes a successful consignment shop owner?
Here are ten tips on how to start your own consignment store.
1.) Treat your store like a real business- not a side hustle or hobby
Many people who love thrift shopping decide to open a consignment or thrift store. They assume that their ability to find good bargains means they know how to run a consignment store. However, it's essential to recognize that opening a consignment shop means starting a business and not just pursuing a hobby. To run a successful consignment store, you must acknowledge this fact and treat your consignment shop start up with the seriousness and dedication it deserves.
2.) Recognize that you need more than a dream. You need to create a business plan.
Opening a consignment shop is a long-held dream for most shop owners. However, many entrepreneurs in the resale industry think it's easier to open this type of shop because there's no inventory to purchase. They quickly learn the truth.
To make a consignment store successful, you need more than a business license. You need a solid business plan in place.
Research the industry. Know your product. Study the competition. Read Starting a Consignment Business – Step 1. Remember, it's never too late to revisit or create a strong business plan.
3.) Get skin in the game by making a financial investment.
SimpleConsign serves a diverse group of customers, ranging from successful multi-location stores to new store owners.
Conversations with new store owners often go like this:
New Store: "Hi, I want to ask about your software."
SimpleConsign: "Sure. Tell us about your business!"
New Store: "We're signing the lease for the basement area under my sister's hair salon. I borrowed a computer from my cousin and have handwritten all of our tags. Once we start making money, I'll add an actual cash drawer."
This is a clear sign that your business is underfunded, and your chances of succeeding are low.
Successful business owners make an investment in time and money. Purchase reputable software. Invest in quality hardware. Keep reserve funds that you can draw on during slow times.
Create an attractive retail store in the best possible location with in-demand consignment items. If you cannot do these things, there may be a better time to open your shop.
4.) Build a reliable team.
A successful consignment shop owner understands that you can’t do it alone. You need a solid support system and business structure. Take time to hire top-notch full and part-time employees. Invest time in training your team so you can trust them to work independently.
Build a network with other shop owners either in your community or across the country. Find a mentor to counsel with for business and personal needs. If you're wondering how to set up a consignment store, these are the people to ask!
5.) Accept the need for marketing and know how to measure your results.
Owning a consignment shop can be challenging, and one of the biggest challenges is attracting customers. Advertising and marketing must be a top priority to open a new consignment store successfully. A vibrant and active social media presence is crucial for any business nowadays, and they are usually free to set up.
If you lack the necessary skills or time to do this, you can hire someone to help. Remember, the ultimate goal is to get more customers within your target market. If you're managing your marketing team correctly, you should see a return on this investment.
6.) Don't skim over the details.
Details matter, yet many consignment shop owners ignore them. When reading Yelp reviews of consignment shops, we often see comments like "No one spoke to me during my entire visit," "The store is dingy and smells bad," and "Are you ever open?" These may seem like small details, but making excuses or ignoring them altogether can cost a lot of business.
If you're wondering how to open a consignment store, start by reading reviews online for consignment shops in your area.
7.) Identify and understand your customers.
When starting a consignment shop, it's essential to know your customers. The question is whether you choose your physical location and then determine your merchandise based on the location's demographics or decide your inventory and then find a place with the people who want to buy what you offer.
Regardless of where you start, understanding your customers is vital to running a successful consignment shop. Study the neighborhoods around your shop and survey your existing customers to get better acquainted with them. Look for unique ways to get involved with your community and build customer relationships before you start selling items. This will improve your bottom line.
8.) Give your customers what they want.
A staff member from our team once visited a consignment shop in another state. The shop owner complained about the poor business and how no one wanted to buy her clothes. Instead, customers were more interested in her display pieces, which were clearly marked with "Not For Sale" signs.
Our staff member suggested that the owner sell the right merchandise and advised her to switch to the used furniture and fixtures market. Her options were to continue with dismal results or try something new to increase sales. A successful consignment shop owner should know what their customers are looking for and offer the merchandise they want.
9.) Be flexible and open to change
We often hear shop owners say they can't change because of customer and vendor expectations. What if inefficient inventory searching, consignor payment tracking, or data entry is costing time and money?
The consignment industry has grown beyond traditional brick-and-mortar shops, becoming a large and profitable industry. The RealReal's success is a testament to this fact. It shows that to succeed in this industry, one must be flexible and willing to adapt to changing circumstances.
Successful consignment shop owners should be ready to grow and evolve as the industry changes. If you're willing to take that step, you can get a free trial of SimpleConsign.
10.) Make the hard decisions
As a business owner, you may face difficult situations with customers or suppliers who have high expectations or unreasonable demands. However, it's important to stand firm and maintain your policies. To make your stance clear, ensure that you have documented your policies and made them easily accessible on your website. Remember to remain respectful and professional.
Your customers and consignors are crucial to your business's survival, but ultimately, you are the one responsible for setting the guidelines. Your consignors should not be allowed to dictate what they will or will not accept. It's important to establish a set of rules and expectations for your team to follow, and lead by example as a role model for your employees. Remember to maintain consistency and fairness in your approach.
In conclusion, starting and running a successful consignment shop requires hard work, dedication, and a solid business plan. It's crucial to invest time and money in creating an attractive retail space, hiring a reliable team, and developing effective marketing strategies.
Paying attention to the details, understanding, and catering to your customer's needs, and constantly adapting to changes in the market are all essential factors that contribute to the success of a consignment shop.
With the right mindset, resources, and support, anyone can become a successful consignment shop owner and thrive in the resale industry.