With the current economy, more people are shopping in consignment stores, resale shops, thrift shops, and second hand stores. Opening a consignment shop business costs less to start up than other retail stores because the inventory is on consignment. Learn from the success of one smart young woman who is doing better than she expected when she started her unique consignment shop during the economic crisis.
How to Start a Consignment Store Business
Before opening her consignment shop, The Consignment Boutique, in Pittsburgh in the spring of 2010, Arlene Stasenko “read many books, did a lot of online research, and visited other consignment stores,” she says.
She applied for an LLC (Limited Liability Company) and then began to look at potential locations. She determined what the rental costs would be and did a business plan to project potential profit for the business.
After investigating many potential retail spaces, Stasenko chose to rent a store space that had been a successful resale store for a number of years until the owner moved out of state. Once she found her space, she began gathering merchandise from “friends, relatives, friends of friends” to open the store, but soon people started approaching her about consignment including her current customers.
To keep her advertising costs to a minimum, Stasenko says she “advertised in all of the local church bulletins, took out ads through other local organizations, posted fliers, and went around to surrounding businesses and introduced myself and my business.” For The Consignment Boutique, word of mouth “has proven to be the best advertisement so far!”
How to Run a Successful Consignment Store Business
Stasenko was surprised that her consignment shop did much better financially than she had projected in her business plan, and she was turning a profit within a few months, but warns others who are considering opening a consignment shop to “be prepared to work long hours without much pay."
Some things she especially likes about owning the store are getting to know the customers and developing good relationships with the consignors who provide the merchandise. Stasenko says the consignors are “the life-line of your business.”
Ideas for Success from Consignment Shop Owner in Pittsburgh
Stasenko advises doing your research first before anything else. She suggests that you “talk to as many shop owners as possible in other cities because they’re not going to feel you’re a competitor." She definitely recommends buying accounting software that is specific for keeping track of consignment store inventory and payments.
It is also crucial to have a consignor’s policy in writing and a contract for consignors to sign in order to maintain a good working relationship with the people who provide the inventory. Establish time limits for merchandise to be on display, and a policy for disposal of unsold merchandise. Be honest and maintain a professional relationship with consignors.
Stasenko has created an environment at The Consignment Boutique in Pittsburgh that is more like a boutique than a thrift store. She provides her customers with a very pleasant shopping experience, and is selective in what is consigned in order to offer low-cost, high-quality merchandise.
Barbara Shema - Barbara Shema is a freelance writer and artist from the USA currently living in Europe to teach English as a foreign language.
