There has never been a better time to start a consignment business. Buyers are looking for deals and sellers are looking for ways to make money. Add to that the fact that thrift is in fashion and is likely here to stay. If you're wondering how to start a consignment business, the steps in this article should provide you with a good beginning.
Decide on a location.
Many consignment businesses are set up in retail store locations and that is certainly a viable option. If you're not ready to sign a lease and commit to a monthly rent, however, there are alternatives:
* Hold a large, quarterly sale in the same location so repeat customers know where to look for it. Spend the time between sales gathering and preparing inventory and marketing the sale.
* Sell online. You can run a consignment business at online marketplaces such as eBay, Craigslist, and Etsy.
Choose a niche.
Most consignment businesses focus on one product category: adult clothing, children's clothes and equipment, furniture, even books. The advantage to specializing is that the learning curve regarding what will sell, pricing, etc. is shorter. It's also easier to market when you focus on a niche.
Build inventory.
The success of a consignment business depends largely on the quantity and quality of the inventory you can build.
First, decide if you're going to pay outright for people's items and then resell them, or alternatively, "take them on consignment" and only pay when the item sells. It's most common to take large items (like furniture) on consignment and pay outright for small items. Either way you're going to want to reject items that you don't believe will sell.
Next, find a way to get the word out that you're buying items from others. Ideas are ads in newspapers and online, signs, flyers, and word of mouth. Either meet with sellers by appointment or set up predetermined times and locations where you will be available to accept items.
Create a budget.
Ask yourself how much money you have to invest in your consignment business. Are you going to borrow any additional funds? Make a list of this kinds of things you'll need to purchase such as inventory, display racks and pricing supplies, a cash register, etc. and divide your budget accordingly.
Other things that go along with this step include obtaining any business licenses necessary and opening a business bank account.
Market your business.
Even the best-run business won't be successful if others don't know about it. Run ads, put up flyers, encourage others to spread the word. Create email lists for ongoing marketing.
Also look for free media coverage. You'll have to be your own PR person to make this happen. Push the economy angle, which fits nicely with your business model.
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