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Consignment of Clothing, Furniture, Home Accessories, Antiques & Collectibles, Children's Items, Bridal & Formal Wear, Maternity
Thank you for your inquiry regarding the thriving industry of consignment. We are happy to share some industry information with you.
If you are presently unhappy in your current career, if you're tired of making other people wealthy, or if you've always wanted your own business, this could be one of the most risk-free and easiest ways to begin your own business. With careful planning and organization, some basic sales ability, and the desire to succeed, you can start a consignment business in no time and be up and operating and generating profits from your first day!
Why is this one of the best retail businesses to start? The number one reason is that your inventory is furnished to you FREE. You have no money tied up in merchandise that may or may not sell, and your financial risk is ZERO when it comes to stocking your consignment store. You can be selective and you can just about always have the right merchandise at the right time during all seasons. It's your total control!
However, if you don't have experience in the consignment industry, like anything else, you need to have at least some guidance and practical advice from those who have already spent the money, time, and effort to figure out how to really make money in this business and who are currently enjoying the results of their efforts.
The trick, then, is to shortcut this learning process and glean as much information as possible from those who are already successful in order for you to begin your business on a success track from the start. Most savvy people know that in order to be successful, one of the best methods is to follow the leader and make your business just a little bit better while using the techniques, operating procedures and tricks of the trade that are already proven, time-tested winning strategies and that are presently providing substantial earnings for those successful people. These methods of operation are usually very closely held secrets of successful shops -- as well they should be -- since their time, effort and money have been spent to obtain the success they currently enjoy. We are, though, now sharing some of this information with you.
As with any business venture you are considering, you must do your research beforehand. This can be one of the essential keys to your success. You have already proven your recognition of this fact by requesting this report. If you are seriously considering the consignment business, keep doing your research! Write or send for anything you see that can help you broaden your knowledge. Talk to as many people as possible who have experience and listen to what they have to say. One caution, however: You will run up on negative attitudes and probably will not see these people in this business for very long -- or any business for that matter. Try to talk to as many successful people as possible. Ironically, they are usually the ones who are most happy to share with you.
Let's take an overall look at this business:
HOW BIG IS CONSIGNMENT?
Yes, the above figure says billion. That is quite a remarkable statistic and most people would never guess this industry generates this amount of revenue.
MISC. THRIFT STORES AND CONSIGNMENT SHOPS
Can you do this the first year? Probably not, but the growth potential is certainly there with many long-term, established shops meeting these sales numbers and more.
NATIONAL TV RECOGNITION
Good Morning America in the past featured an approximate 12-minute segment on consignment shops specializing in celebrity clothing in California and the advantages of buying designer clothing at a fraction of original cost.
OTHER ACCOLADES IN PRINT:
From the Detroit News: "Ram Kesavan, director of the Small Business Development center at the University of Detroit Mercy, said the Detroit resale business makes easily $1 million a year." "Jerry Divozzo, who manages the Eight Mile Road Sunshine Thrift store said he averages between $5,000 and $10,000 in sales a weekend."
From USA Today: "People are proud to shop secondhand," says Alan Millstein, publisher of Fashion Network Report, "everyone from the younger shopper in search of a retro look to aging baby boomers in search of value. Resale is a bonanza business."
From the Los Angeles Times: Headline; Home Edition: "Now It's Cool to Shop Consignment Stores for Christmas."
From the Los Angeles Times, Orange Co.: "Demand for used clothing has grown, and so has the number of stores that want castoffs. When she opened her shop, Patsy Fowler (Patsy's Clothes Closet, Santa Ana), had scant competition. Now the Orange County resale network has 20 member shops."
From The Commercial Appeal, Memphis, TN: "Bargain mania has helped make resale shops one of the fastest-growing segments of the retail industry," according to the National Association of Resale & Thrift Shops, based in St. Clair Shores, Michigan. The group's membership has grown 40 percent since 1994.
The above references are obviously good examples of successful entrepreneurs. I doubt if any of them achieved that success within a year; however, this does show what is possible for anyone with the right business practices, personal drive and vision.
MY PERSONAL EXPERIENCE
A few years ago, as a start-up consignment shop owner, I also had many questions and much research to do. However, what I found was that there was extremely limited real-world information on the market to truly answer my practical day-to-day basic questions. The couple of books or "kits" that I was able to locate at the time were mainly theory and broad-based general concepts (expensive, too). Although I did gain some valuable insight, I needed more in the way of facts and figures that would apply to my personal situation.
With no luck in finding such information, it really did take me approximately two years to trial-and-error my way to a successful, smooth-running operation. Although other shop owners were extremely gracious and helpful, no one was going to divulge all their secrets, nor could I ever expect them to. So I dug in, spent money, experimented and learned on my own. My first year in business, I did accomplish gross sales just under $75,000, just on determination and learning as I went along.
The point of this being: Reading concepts and theory is a great idea and definitely part of planning; however, what is going to benefit you most and make you successful is practical, no-nonsense business practices. The bottom line is you have to know how and where to spend your money and what to do on a day-to-day basis in order to make money. In the beginning of any new venture, you're going to have to get your hands dirty(so to speak), maybe throw out some old rules of the game, and basically be clever enough to switch policies or practices on a dime and make things happen. By using the ground rules that have already proven successful for others, you can take your street smarts and creativity and build a substantial business.
After operating for a few months, I was able to cut out a large percentage of overhead expense (which can be a killer) and change my policies and procedures to streamline my business. (In the beginning, most people tend to overspend in certain areas where they don't have to.) There are many ways to cut costs, spend a reasonable amount of money and still operate on a profitable basis. Some of the best promotional ideas are free or a nominal cost and can be the most effective.
After awhile, my 7-day work week turned into 6 days, and then into 5 days. I had finally managed to organize the operation to where I could actually run a business and have a life also. It was the best of all worlds. If only I had the knowledge I gained during the first trial-and-error months, I would have been able to get to this point much sooner, and would have saved a lot money also.
Although this can be hard work, this is a great business to be in if you're a "people person" or you have a natural sales ability and lots of common sense. You'll be able to gain many wonderful friends and loyal customers, and this is one of the greatest rewards you'll have.
After talking with others, I did see a desperate need for a basic how-to-start instruction guide. Since nothing I could find addressed my practical concerns and questions in the beginning, I chose to write an affordable manual in the hope this would provide answers to others out there who are infinitely capable of succeeding, but just need an outline to follow.
Although I am not a professional writer, I will say that I've had excellent feedback from both novice and veteran shop owners who "wished they would have had such a manual when they started." (As an aside, we also received a local award after 6 months in business for "Charlotte's Best New Consignment Shop/Elizabeth area.")
If you are interested in more detail than I can provide in this report, please read on and review a few of the following sample chapters to see if there is anything that may answer some of your questions or concerns on the following pages as you contemplate your business:
HOW TO OPEN A CONSIGNMENT SHOP
A Complete and Candid Guide
HOW MUCH MONEY CAN I MAKE?
What to expect an average, well-run shop to do and how much many successful shops are now doing. How to make money on your own consignments. What very successful shop owners do to really make some money.
HOW MUCH MONEY DO I NEED TO START?
Some people have started with as little as $1,400. Others have invested $20,000+. See what a realistic budget is.
WHAT CAN I EXPECT IN MONTHLY EXPENSES Don't like surprises? Read this.
SHOULD I GO INTO PARTNERSHIP WITH SOMEONE? Pros and cons. Who makes the best partner. What to do when you do decide to have a partner. The final consensus.
PUT TOGETHER A BUSINESS PLAN Sample format with explanations.
NEGOTIATING THE LEASE This could be a crucial step to your success. Pay attention to these important details.
ADVERTISING Tips, tricks, and ways to save yourself hundreds of dollars. How to get free advertising. The absolute number one thing you must do starting from day one.
ACCEPTING CONSIGNMENTS How, when, why. This can get tricky and out of control very easily. Find out what guidelines you need to establish from the beginning. POLICIES AND PROCEDURES
YOUR CONSIGNMENT AGREEMENT (This must be worded carefully)
RETURNING UNSOLD ITEMS TO CONSIGNORS (Why you should have a donation policy with certain exceptions)
LAYAWAY POLICY (Do or Don't?)
RETURNS AND EXCHANGES (This rule should be established and enforced)
PAYING CONSIGNORS (Good policies. Bad policies.)
TAKING CHECKS FROM CUSTOMERS (What you must put on every check to protect yourself)
TAKING CREDIT CARDS (Why you should definitely offer this service)
BANK ACCOUNTS (One or Two?)
SHOPLIFTING (Yes, it happens. How to curb this.)
WHAT SELLS, WHAT DOESN'T Don't get stuck with non-movers. The most surprising things won't sell. Likewise, things you think will sell, won't. What to do when this happens.
HOW DO I PRICE THE MERCHANDISE? This is the biggest learning curve you'll have, and one that you'll need to master quickly. Use this furnished list of price ranges as a guide.
SETTING UP THE SHOP Layout is very important. You'll need more storage than you think. Lighting, music, colors, dressing rooms, etc. How to create an atmosphere. How to save a great deal of money buying racks, hangers and fixtures.
BEST SHOPPING MONTHS OF THE YEAR There are a few months of the year that are red-hot months. Be aware of "sales lulls" in certain months.
HOW CAN I GET WHOLESALE SOURCES? This took me a long time to figure out, but I am giving you a link to a great resource for wholesale items. Please click on Wholesale Sources at the top of this page, or read the eBay Buying & Selling Tips section of this website.
Other chapters include: "Can I Keep my Regular Job and Still Have a Store?", "What Legal Requirements Do I Have ?", "Hours of Operation," "Shop-Owned Merchandise," "Grand Opening," "Semi-Annual, 50%-Off Sales."
Along with the above, I've also included actual forms you may copy and use for:
Further, I will also supply you with names and addresses for valuable contacts and resources to help with your planning and store supplies. There are also great Internet resources which are listed for industry updates, forum sharing and other valuable information.
As stated above, this manual was written from firsthand experience with excellent input from other veteran shop owners. Hopefully, the experience and advice we offer can only benefit you and jumpstart your success. One word of caution, though: As the Internet gets bigger and bolder, there are others out there who have unethically copied our web site and/or manual. This is the original manual with the copyrighted name of "How to Open a Consignment Shop: A Complete & Candid Guide." You can be assured that you are getting the authentic information from the original author.
Just remember, keep learning and researching and arm yourself with as much knowledge as possible. Information on Consignment Software is listed at the top of the page. Just click on that tab in the header. Please note that I also have a page under Ebay Buying & Selling Tips that you may want to check out while you're here. Buying and selling on eBay is one of the best and fastest ways you can get a feel for items that sell well on consignment. Just click on Ebay Buying & Selling Tips at the top for advice on what to sell, when to sell it and where to get it.
Wholesale Sources: Please be aware that there are a lot of companies representing themselves as wholesale distributors, but are really in the market to scam people. If you are looking for an honest, ethical source for your wholesale merchandise, please click on the Wholesale Sources tab at the top for more information.
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