Starting a Consignment Shop
Running a retail store could require a large capital for buying stocks. If you want to run a retail store, but don’t have such capital requirement, you can instead start a consignment shop.
If you are consigning, you only have to pay the consignor for what you have sold. Interested? Here’s a guide to help you start one.
If you are a consignee, consigning means agreeing to have someone else's merchandise sit on your store -- without buying it -- and taking only a part of the proceeds when the good is finally sold. As long as the goods sit on your shelf, they still belong to your consignor. Usually, it is you, the store owner, who determines the price of the merchandise. If you are consigning, you could ask the help of a lawyer in coming up with an agreement to have a guide in your dealings with your consignor.
Consignment Shop Goods and Pricing
Consignment shops are also often understood to be secondhand stores, but they are different from charity or thrift shops in that in a consignment shop, the consignor still gets revenue, whereas charity or thrift shops donate the proceeds -- although, some consignees also often donate unsold items to charity. Most items sold in these shops are clothing, home decor, athletic equipment, antiques, books, musical instruments, toys, furniture, and tools. Consigned goods are typically priced 35% on the average of their retail or original price, depending on factors such as brand, style, age, and demand.
Consignment Shop Startup Needs
Starting a consignment shop doesn't cost as much like a regular retail store because it does not need the purchase of merchandise. For example, a consignment clothing store could have an average startup cost of $6,000. What you basically need for this business is a shop with display furnishings, tables and shelves, packaging items, tags, and cash register. Later on, you can furnish your shop with a computer and printer.
In your projected budget, include costs for advertising, utilities, rent, overhead and renovations. If your store is a specialty shop, the atmosphere of your showroom factors in a lot for the business, and so it is better if you spend some amount to make your shop look clean, neat and stylish. Pay attention to carpeting, wall decoration, and even the smell of your shop. Also make sure that you have enough rack and shelves and your displays are attractive. A classy atmosphere elicits good mood, increasing the likelihood that a customer would buy an item from your store. It would also be advantageous if you and your staff have the eye for quality and sufficient knowledge of the merchandise you are selling, particularly if you are running an antique shop.
Advertising for this business goes the route of the regular ones like radio, newspapers and fliers.
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