10 surefire ways to be a successful consignment shop owner
February 10, 2017
What makes a successful consignment shop owner?
1.) Decide it’s a business, not a hobby
A number of business owners we speak with will decide to open a consignment shop purely because they like thrift shopping. They know a good bargain when they see one. In fact, their basement is filled with them. They mistakenly believe this translates into becoming a business owner. The #1 way to be a successful consignment shop owner is to acknowledge you’ve opened a business, not enlarged a hobby.
2.) You need more than a dream, you need a plan
Many shop owners say opening a consignment shop had been a dream they had had for years. Entrepreneurs in the resale industry often think it’s easier to open this type of shop because there’s no inventory to purchase. They quickly learn the truth. Even more than a dream, you need a solid business plan. 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 solid business plan.
3.) Make a dollar investment
A phone conversation goes like this, “Hi, I want to ask about your software.” “Sure, tell me about your business.” “We’re signing the lease for the basement area under my sister’s hair salon. I’ve borrowed a computer from my cousin and I’ve handwritten all of our tags. Once we start making money, I’ll add an actual cash drawer.” I can’t tell you the number of times I’ve wanted to scream in the phone, “Please, please don’t open a business!” A successful consignment shop owner makes an investment. Not just an investment in time, but in money too. Purchase reputable software. Invest in quality hardware. Have reserve funds to tap into during the slow times. Create an attractive shop with in-demand merchandise in the best location possible. If you can’t do these things, perhaps now isn’t the time to open your shop.
4.) Share the load
A successful consignment shop owner understands that you can’t go it alone. You need a solid support system. Take time to hire top-notch full and part-time employees. Invest time in training them 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.
5.) Understand the need for marketing
What is the saying? “If you build it, they will come.” Well, not when it comes to owning a store. In order to be a successful consignment shop owner, you have to recognize that advertising has to be a top priority. If you don’t have the skills or the time to market your shop correctly, find someone who can. There’s no excuse. You must have a vibrant, active social media presence. By golly, it’s free! Many younger aged students fully grasp the power of successful Facebook and Pinterest pages or Twitter and Instagram accounts. They would be happy to assist you for a small wage or even store credit. The other saying? “Get ‘er done.”Get my Free Trial of SimpleConsign
6.) Don’t skimp on the details
I can’t tell you the number of times I’ve read a Yelp review of a consignment shop and the reviewer states, “No one even spoke to me the entire time I was in the store.” Or, “This store is dingy and smells bad.” Or, my personal favorite, “When are you open? You never seem to be open when I come!” Details, details, details. These are simple ideas, but you would be surprised at the number of consignment shop owners who do not pay attention to the details.
7.) Know who your customers are
It’s the old “which comes first, the chicken or the egg?” discussion. Did you chose your location and then determine your merchandise based on the location’s demographics? Or, did you decide your merchandise and then find a location with the people who want to buy what you offer? However you chose to begin, knowing who your customers are is the difference between being an unsuccessful vs. a successful consignment shop owner. Study the neighborhoods around your shop. Survey your existing customers to get better acquainted and find unique ways to get involved with your community.
8.) Know what your customers want
A member of our staff once visited a consignment shop in another state. The shop owner was disparaging the fact that business was so poor. She said no one wanted to buy her clothes, but they constantly asked about her display pieces that were clearly marked with “Not For Sale” signs. Our staff member looked her square in the face and told her she obviously wasn’t selling the right merchandise. “Get out of the clothing business and get into the used furniture business!” A successful consignment shop owner knows exactly what their customers are looking for.
9.) Be flexible and open to change
We often hear a shop owner say they’ve always done things a certain way and they simply can’t consider doing it any other. Really? Even though the way you’re searching for inventory, tracking consignor payouts or entering data is costing you time and money? No longer just “Ma and Pa’s Used Stuff” shops, the consignment industry today has evolved into big business. One only has to look at the success of The RealReal to realize there’s money to be made, but not if you’re unwilling to grow with the industry. Any business owner, especially if you want to be a successful consignment shop owner, must be flexible and willing to adapt.
10.) Make the hard decisions
Whether it’s unreasonable customers or consignors, someone has to be the one to hold the line. That someone is you. Make sure you have listed your policies clearly in writing and on your website. There’s no need to be disrespectful. Both your customers and your consignors are the life blood of your business, but you are the one who sets the rules. Your consignors should never be the ones to say what they will and won’t accept. Remember, stick to the rules. This applies to your employees too. Set a standard. Be a role model that your employees can follow.
I have been a writer for various forms of marketing for awhile now. I've written my share of radio and TV scripts, magazine and newspaper ads as well as direct mail brochures and newsletters. Currently, as the Marketing Director for Traxia, home of SimpleConsign software, I've moved into blog posts, eBooks and website text. It's been an ever changing and ever challenging journey but I've loved it all along the way.
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