To start out a consignment store, as with every enterprise, you’ll want a primary storefront and a technique for buying prospects and merchandise. It entails selecting a distinct segment, establishing a funds and marketing strategy, discovering merchandise and laying out your retailer, promoting, staffing up, and, lastly, opening to the general public.
Key Takeaways:
- Consignment is a kind of enterprise mannequin the place the shop proprietor is a “reseller” offering a market for sellers and their items.
- To start out your individual consignment enterprise, you will want a marketing strategy, funding, a retailer location, and merchandise.
- Beginning a consignment retailer can price as much as $10,000, in accordance with Entrepreneur, with store house owners incomes wherever from $40,000 to $60,000.
Right here’s the best way to begin a consignment store―as a brick-and-mortar retailer―in 9 steps.
Step 1: Select the Proper Sort of Consignment Store
When you’re questioning the best way to begin a consignment store, step one is to slim down precisely what sort of retailer you wish to open. Essentially the most profitable shops cater to a particular viewers and have a specialty or focus space that helps them stand out from different on-line or offline retail opponents. To take advantage of cash along with your new enterprise, select a product space that’s in excessive demand and/or onerous to search out, to draw buyers into your retailer.
Designer & Luxurious Items
The secondhand luxurious and designer items market was price an estimated 45 billion Euros in 2023 in accordance with the Bain-Altagamma Luxury Goods Worldwide Market Study (about $46 billion), a determine anticipated to proceed to rise. These are standard objects as a result of buyers can buy merchandise which will in any other case be exterior their budgets. Individuals seeking to eliminate gently worn designer merchandise usually decide to promote them to a consignment retailer somewhat than donating to get a partial return on their funding.
Fashionable designer items to promote embody watches, jewellery, sneakers and different footwear, purses, wallets, jewellery, and attire.
Attire & Footwear
Clothes and footwear are standard secondhand objects, even when they’re not costly designer-label. Based on ThredUp’s Resale Report, greater than three-quarters of people that’ve by no means accomplished it could contemplate promoting secondhand garments. They’re comparatively simple to supply—greater than 95% of the 36 billion tossed clothes objects annually could possibly be salvaged—and so they’re objects for which there’ll at all times be demand.
In actual fact, clothes is the most-purchased secondhand goods. ThredUp’s newest report predicts that 10% of all world attire gross sales can be secondhand by the top of 2025.
The most important goal marketplace for one of these consignment store is Gen Z ladies, in accordance with ThredUP. So preserve these types and tendencies in thoughts should you’re going after that viewers.
Books
Secondhand books are one other standard consignment class. Along with common paperbacks and hardcover books, some used bookstores deal in uncommon books, reminiscent of antiques and signed copies, or specialty books like cookbooks and textbooks.
Fashionable web sites like ThriftBooks and Higher World Books are examples of on-line retailers which have discovered success promoting used books. Puerto Rico-based El Coquí Bookstore sells used books in-store solely—buyers have to go to the store and discover the big selection of books in quite a lot of languages.
Youngsters’s Put on
Clothes for youngsters and infants is a well-liked and worthwhile kind of consignment retailer. Since mother and father need to buy garments for rising kids fairly often, many flip to secondhand shops as an reasonably priced possibility. Plus, you’ll have a gradual provide of fogeys seeking to promote their kids’s gently used garments.
Free useful resource: How to Choose a Business to Start
Pop-up Consignment Store
When you’re not able to decide to a full-time storefront, having a pop-up enterprise is an effective way to check merchandise and places earlier than diving in. When you’re seeking to begin a consignment enterprise as a part-time enterprise or facet gig, having short-term shops is an effective possibility as nicely.
Pop-up outlets include much less dedication, in order that they’re an effective way to get into retail with out all of the overhead of operating a everlasting storefront. That is precisely the method that Grapevine Occasions takes with their secondhand items pop-up outlets. In consequence, they’re additionally capable of supply increased charges to consignors.
Additionally learn: 30 Smart Pop-up Shop Ideas for Retailers
On-line Consignment Store
Not eager on establishing a bodily retailer? Through the previous a number of years, on-line consignment shops have turn out to be very fashionable, particularly for attire and equipment. Beginning a web based consignment store provides you a wider buyer base than a neighborhood retailer.
One key factor to recollect when beginning a web based consignment store is that you just’ll must {photograph} every merchandise individually. This may be time-consuming, so it’s vital to weigh how a lot time it’ll take you in opposition to the chance for revenue.
Listed below are some assets that will help you learn to begin promoting on-line:
Be taught extra: 60 Best Business Ideas to Make Money
Step 2: Create Your Consignment Store’s Funds
As soon as what sort of retailer you wish to open, the following step in the best way to begin a consignment store is setting a funds to your retailer.
To set your funds:
- First, contemplate your present earnings and financial savings. What are you able to save and put aside to your new enterprise enterprise? How a lot exterior funding will you have the ability to get from private loans, enterprise loans, enterprise bank cards, and so forth? Opening a consignment enterprise requires a number of upfront money. When you’re open, it is going to take time to construct your gross sales quantity.
- Subsequent, estimate your bills for opening your retailer. Embody how a lot you may spend on a storefront, outfitting the within of your retailer, indicators, and advertising and marketing, and your preliminary product buy.
- Now, estimate your month-to-month bills for when you open. Embody set payments like hire, telephones, web, fee processing, and so forth. Additionally consider promoting budgets, worker salaries, merchandise buy orders, and different retailer provides.
Free useful resource: How to Budget a Retail Business in 6 Steps
The toughest a part of setting a funds for a enterprise that isn’t but open is predicting your month-to-month gross sales quantity. That is particularly onerous for attire and retail companies as gross sales can fluctuate drastically, relying on the season, vacation, climate, financial system, and client confidence.
Based on the Retail Owners Institute, used merchandise retailers had a mean stock turnover fee of 4.3 in 2024. Which means they offered by and changed all of their stock about 4 occasions all year long.
Hold that quantity and your whole stock worth in thoughts when estimating your month-to-month gross sales. Err on the facet of warning, and plan for decrease gross sales once you open, so that you’ve got sufficient money circulate to cowl bills. Subtract your estimated month-to-month bills out of your estimated month-to-month gross sales, and that offers you an approximate month-to-month money circulate for once you open.
Step 3: Create a Enterprise Plan for Your Consignment Store
Subsequent, you’ll want a stable marketing strategy to piece collectively all of your concepts and type a technique for making your retailer worthwhile. When you’re looking for exterior or startup funding reminiscent of a financial institution mortgage, your marketing strategy can be evaluated throughout the approval course of.
Listed below are the 9 components present in a typical marketing strategy:
- Govt abstract: An introductory paragraph outlining your consignment store’s goal, mission, and why it will likely be profitable.
- Enterprise description: Describe what want or market gap your consignment retailer is filling in the neighborhood, who your prospects can be, and the expertise in your staff.
- Market evaluation: Write an general outlook on the consignment and resale trade together with tendencies, what profitable opponents are doing, and what your strengths can be.
- Group and administration: Define who can be operating your online business and the expertise your staff members have in retail, consignment, or your retailer’s space of specialty.
- Product line: Define what sorts of merchandise you’ll promote, how you’ll promote them, and the place your provide will come from. Embody analysis on why you’re choosing these merchandise, reminiscent of gross sales pattern knowledge.
- Advertising and gross sales: Describe your common advertising and marketing technique and your plan for attracting and retaining prospects.
- Funding requests: When you want exterior funding, define your wants and specify precisely how you’ll use the funds.
- Monetary projections: Element how your online business will turn out to be steady and worthwhile, together with a projected monetary timeline of at the very least 5 years. In case you are borrowing funds, embody a plan on how it is possible for you to to repay the mortgage.
- Appendix: Use this area for any supplemental paperwork, reminiscent of emblem or branding designs, sketches of what your consignment store will appear to be, credit score histories, licenses, permits, and so on.
Free useful resource: How to Write a Business Plan
When writing a marketing strategy, use the format and software program you’re most snug with. Many individuals use a conventional phrase processor like Microsoft Phrase or Google Docs. You can too create your marketing strategy in a presentation format utilizing PowerPoint or Google Slides. There are additionally marketing strategy software program applications that supply templates and information you thru the method. Learn our information to 6 of the best business plan software.
Select the Finest Authorized Construction
Selecting a authorized construction to your consignment enterprise is vital as a result of it dictates how you’ll gather and report taxes, your stage of private legal responsibility, and the way you’re going to get paid from your online business. There are lots of sorts of authorized buildings, however the three mostly present in retail are sole proprietorships, restricted legal responsibility firms (LLCs), and firms.
Sole Proprietorship
When you don’t arrange a authorized construction for your online business, that is the default. Working beneath a sole proprietorship primarily means you’re doing enterprise as a person and, due to this fact, aren’t separated from your online business in any manner. Sole proprietorships are standard choices for freelancers, enterprise consultants, and different people conducting low-risk and low-visibility work by themselves.
With sole proprietorships, your online business income is taken into account private earnings. This implies you’ll pay sole proprietorship taxes primarily based in your private earnings bracket. If you are topic to self-employment taxes, you would not have to pay any company taxes, which is a plus.
Nevertheless, sole proprietorships additionally include higher danger since you and your online business are one and the identical. Your private belongings, reminiscent of your home and automotive, are in danger if there may be any type of lawsuit in opposition to your online business or should you declare chapter.
Be taught extra: What Is a Sole Proprietorship?
Restricted Legal responsibility Firm (LLC)
LLCs are authorized buildings for small companies that defend your private belongings, reminiscent of your home and automotive, within the case of lawsuits or enterprise chapter. That is the most well-liked authorized construction for small retail companies and the one we suggest in case you are planning on sustaining a single consignment storefront.
When you’re the only proprietor of the LLC, you’ll possible nonetheless pay taxes the identical manner you’ll as a sole proprietorship however with the good thing about private belongings safety from legal responsibility. Nevertheless, many states have separate LLC taxes, which can make it dearer than working as a sole proprietor. It’s at all times greatest to test along with your native rules.
To type an LLC, you might want to select an official title and file paperwork to determine your organization, whereas a sole proprietorship doesn’t require any paperwork. Fortunately, the paperwork isn’t overly in depth and may be filed simply in a number of steps utilizing a device like LegalZoom. Read our guide to learn how.
Be taught extra: What Is an LLC?
Company or C-corp
Companies are essentially the most structured authorized type to your consignment enterprise. They’ve strict tax tips. If you create an organization, it’s a very new and separate entity within the eyes of the federal government and the IRS.
Companies are a perfect construction for consignment companies that wish to increase into a number of storefronts, turn out to be a public firm, or wish to safe a number of exterior funding. Companies offer you essentially the most private legal responsibility safety out of the three authorized buildings. Nevertheless, you will want to pay federal company tax on high of private earnings tax. Companies are additionally costly to type and require you to maintain detailed enterprise information.
Be taught extra: What Is a C Corporation?
Manage Your Funds
Irrespective of which authorized construction you select, getting your funds so as is an important step. This entails opening a enterprise checking account to separate your private and enterprise funds proper from the start. Having two separate accounts makes it simpler to observe your online business’ money circulate and monitor bills precisely and can make the method of submitting taxes a lot simpler.
Free useful resource: How to Separate Business and Personal Finances in 9 Steps
Chase is a superb banking answer for retailers as a result of it presents small enterprise checking, enterprise bank cards, and service provider companies―fee processing―so enterprise house owners can handle all their money circulate in a single place. Plus, Chase presents aggressive charges and nice customer support. Contact Chase to study extra about its small enterprise retail options.
Additionally see: Best Small Business Checking Accounts
Step 4: Choose a Storefront
Selecting a storefront is a crucial step that must be thought-about fastidiously. The situation you choose can all however make or break your online business. The choice can appear overwhelming. So, begin by narrowing down a geographic location. You’ll be spending lengthy hours at your consignment store almost each day once you first open. Take into consideration how far you’re realistically prepared to commute and select areas which might be accessible from your own home simply.
Spend time in every space to turn out to be acquainted with particular neighborhood demographics and preferences and scope out different native companies. Many elements go into selecting the best location for your online business, nevertheless it all comes all the way down to selecting the placement that may appeal to essentially the most prospects.
Decide Foot Visitors
Figuring out foot visitors may help you determine what number of walk-in prospects you may count on in every location. Along with staking out your potential storefront places, ask different native enterprise house owners questions in regards to the visitors, shopper demographics, and neighborhood.
Moreover, contemplate particulars reminiscent of parking and signage. A Predominant Avenue location is good, however provided that your prospects can park close to your retailer simply. Likewise, you’ll need a location that permits for an enormous storefront signal. Some places have strict guidelines in regards to the sizes and sorts of signage they permit.
Free useful resource: How to Determine Foot Traffic
Step 5: Purchase Merchandise
Discovering merchandise to promote at your consignment store is trickier than sourcing merchandise for conventional retailers. You’ll wish to have a shopping for technique in place earlier than you open to make sure a gradual stream of merchandise to promote. You’ll most likely use a mix of ways to maintain your retailer stocked.
Fashionable secondhand product sourcing methods embody:
- Becoming a member of the Association of Resale Professionals (NARTS): This skilled group connects resale patrons with suppliers by its listing.
- Promoting to potential consigners: Promote in print and on-line (on social media too!) recurrently that you just’re buying gently used objects. A lot of your potential buyers may be suppliers.
- Buying from flea and thrift outlets: You’ll find some nice offers on merchandise to promote in your retailer by looking by flea markets and different thrift shops.
- Discovering an off-price provider: Off-price merchandise aren’t secondhand, however they’re deeply discounted merchandise which might be both overstock or barely broken. You’ll find them by commerce reveals.
Free useful resource: How to Source Products in 4 Steps
Step 6: Design & Outfit Your Consignment Retailer
After securing a storefront and discovering product sources, it’s time to start out strategically planning your retailer structure. Your retailer structure has a dramatic influence on in-store gross sales. A well-designed structure will welcome buyers, make them really feel snug, and direct them towards particular merchandise.
The very first thing you might want to determine is what kind of flooring plan you need. Most retail shops match into certainly one of three fundamental structure classes:
- Loop or racetrack: Finest for specialty shops, showrooms, and retailers that wish to lead buyers on a particular path all through the shop.
- Grid or straight: This flooring plan is precisely what you’ll count on—straight, angular aisles which might be sometimes present in grocery and field shops. A consignment bookstore can also comply with this mannequin.
- Free circulate plan: This can be a standard plan for boutiques and permits for plenty of creativity within the design course of. Most attire or decor consignment outlets will comply with this mannequin.
Lastly, you will want to place your checkout counter. A well-positioned checkout will open up flooring area for displaying merchandise and encourage buyers to maneuver by extra of your retailer. As a rule of thumb, attempt to place your checkout on the left-hand facet of your retailer.
Buyers naturally veer towards the proper facet of a retailer, in order that’s the place you wish to show your greatest merchandise. Some shops and bigger mall retailers place their checkout counters behind the shop. Nevertheless, for smaller retailers, inserting your checkout towards the entrance makes it simpler for employees to attend the register and keep watch over the doorway.
Free useful resource: 9 Retail Store Layouts and Tips for Designing Your Floor Plan
Choose a POS System
Level-of-sale (POS) programs are cloud-based software program applications that substitute conventional money registers and supply extra instruments reminiscent of stock administration, gross sales reviews, and buyer knowledge and advertising and marketing. Your POS system is the central hub for your online business the place you course of all transactions. Search for a system that has all of the options you want, together with fee processing, for an reasonably priced fee.
A few of the standards we use to judge the perfect POS programs embody:
- Worth: Most POS software program applications cost a month-to-month price, and a few additionally cost additional for sure options.
- Ease of use: Take a look at out every POS with a free demo or trial to ensure the interface is simple to navigate, and in addition learn person critiques.
- Buyer administration instruments: Nearly all POS programs have a buyer listing function however, in any other case, they differ enormously in what loyalty, advertising and marketing, and buyer suggestions options are included.
- Gross sales reviews: Every kind of POS answer may have some type of reporting device, however some supply extra particulars and options to create customized reviews.
For brick-and-mortar shops, we frequently suggest Lightspeed. It’s a small enterprise POS with big-business performance reminiscent of customized report builders, detailed stock monitoring, a loyalty program, and built-in fee processing. Plus, it has built-in capabilities to deal with consignment merchandise. Go to Lightspeed for a 14-day free trial.
Associated studying:
Step 7: Promote Your Consignment Store
Earlier than opening your consignment store, you’ll want to start out promoting and marketing your retail shop. Since you’re on a funds, be sure that your technique is efficient by selecting a mix of on-line and offline advertising and marketing efforts.
Find out how to Promote On-line
On a Web site
To ensure that prospects to search out your online business, you’ll wish to have a web site. Creating your individual web site from scratch may be simple with the proper instruments. There are lots of simple methods to make a business website for little or no price. You want a registered area and a webhosting service.
Free useful resource: How to Make a Small Business Website
On Social Media
Create social media accounts on channels like Fb, Instagram, and TikTok to advertise your model and consignment objects. You may even promote your secondhand items on Fb in addition to promote them on Instagram straight. Run paid social advertisements focusing on individuals who suit your goal market in your native space. Learn more about social media advertising in this guide.
Free assets:
Utilizing Search Engine Optimization (website positioning)
Focusing in your website positioning technique is a superb technique to put your consignment store in entrance of people that might not have in any other case heard about you. Local SEO, particularly, may help you improve your visibility for native searches. This is a superb advertising and marketing tactic as a result of customers trying to find “consignment store close to me” are possible excessive intent.
Be taught extra: What Is a Local SEO & Top Strategies
Find out how to Promote In Individual
Put Up Retailer Signage
The storefront signage is the primary impression buyers will get from the in-person expertise along with your consignment store. Make certain the signal is well seen and simple to learn, whereas additionally being reflective of your model. You wish to stand out sufficient to make passersby interested in what’s inside, particularly should you plan to rely closely on foot visitors. Try these business sign ideas for inspiration.
Free useful resource: How to Choose a Storefront Sign in 6 Steps
Create Window Shows
Whereas your signage may make the primary impression, your window shows have the potential to make the largest influence. A well-designed storefront with fascinating window shows can lure even essentially the most hesitant buyers into your consignment retailer.
Free assets:
Begin a Customized Loyalty Program
As soon as your consignment store is up and operating, loyalty applications are an effective way to encourage repeat prospects and better transaction quantities. Easy punch playing cards may be efficient. Nevertheless, utilizing a loyalty program that’s tied in along with your POS system presents deeper insights like who’s utilizing this system and the way efficient it’s. Lightspeed presents a classy loyalty program that you may add to Lightspeed POS for a month-to-month price. Visit Lightspeed to study extra.
Free useful resource: 13 Customer Loyalty Program Ideas & Examples
Step 8: Rent & Prepare Workers
Final however definitely not least, earlier than opening your retailer to the general public you might want to carry on a stellar group of workers to function the entrance strains of your online business. When you haven’t employed an worker earlier than, navigating the method may be intimidating. Comply with a brand new rent guidelines that outlines the entire gritty steps you might want to take reminiscent of acquiring an employer identification quantity (EIN), registering for state and native taxes, and so forth.
As a consignment retailer proprietor, it’s possible you gained’t have a devoted human assets (HR) staff member. Utilizing an reasonably priced answer like Homebase can prevent loads of time and stress by simplifying hiring, worker scheduling, time monitoring, and payroll.
Free assets:
Coaching Your Workers
You’ll need your consignment retailer employees prepared to offer top-notch customer support from the second you open your online business. Offering nice customer support is a ability that requires observe. When you don’t begin coaching your workers earlier than you open, they’ll be practising their service expertise in your prospects.
As an alternative, maintain a weeklong coaching boot camp earlier than you open. Along with operating by customer support situations and role-playing, train workers about retailer insurance policies and procedures, the objects you’re promoting, and every other pertinent data.
Step 9: Plan & Launch Your Grand Opening
Internet hosting a grand opening celebration is an effective way to kick off your new enterprise enterprise whereas additionally gaining some press protection. To have most attendance, recruit family and friends, draft a press launch for native media and surrounding companies, make a Fb occasion, notify your native Chamber of Commerce, and take an commercial out within the native paper.
Free useful resource: 20 Grand Opening Ideas to Promote Your Small Business
“One mistake a number of firms make is staying beneath the radar till launch. If nobody is aware of what you’re doing and once you’re opening, then you will have zero probability of creating any gross sales. Begin constructing some pleasure at the very least six weeks earlier than your launch. Get lively on social channels. Work together with possible prospects and get the dialog began. Construct anticipation with engaging pictures, and possibly even incentivize purchases in these early days.”
― Deanna Thompson, Blogger, Closet Full of Cash
Find out how to Begin a Consignment Store Steadily Requested Questions (FAQs)
Based on ThredUp’s 2024 Resale Report, secondhand attire is the most well-liked in consignments. Clients spent almost half of their attire funds on secondhand objects which interprets to 2 out of 5 attire objects purchased within the final 12 months have been from second-hand shops.
With correct planning, consignment outlets may be very worthwhile. On common, a consignment retailer proprietor earns wherever from 30% to 60% of a product’s gross sales value.
A part of studying the best way to begin a consignment store is determining what to not do. There are lots of causes a consignment store might fail. Widespread causes embody selecting the unsuitable storefront location, not having in-demand merchandise, too-small revenue margins, and inadequate advertising and marketing.
The precise value can differ loads relying in your location and native actual property costs. Nevertheless, opening a consignment retailer will price roughly $10,000.
Backside Line
There’s by no means been a greater time to start out a consignment enterprise of your individual than now. Consignment outlets are an excellent enterprise thought for creating wealth in 2025 particularly because the world turns into extra conscious of the environmental challenges consumerism brings. Beginning a consignment store is a superb technique to promote sustainable consumerism whereas additionally making a revenue. And with the market rising the best way it’s, there’s loads of alternative for consignment outlets of every kind.
Able to get began? Try our ultimate guide to starting a new business.
