"An investment in knowledge pays the best interest." -Benjamin Franklin
Running a successful consignment business is a labor love. But, turning a passion into a profit requires full preparation and unrelenting dedication. Before you even open the doors, there are five important tasks you must complete:
1. Develop a Business Plan
A business plan outlines the vision and directs action steps. The time invested in creating this document will save a tremendous amount of money and prevent many mistakes. According to Entrepreneur.com, a consignment clothing store requires $2,000 - $10,000 to launch and it takes two years to work out all the kinks. Minimize these numbers by carefully considering the business structure, policies and relationships with consignors.
If you aren't comfortable talking to a direct competitor, at least browse the store and marketing materials, then contact similar businesses in other cities or states. You will also need to ensure that there is a viable market for the store in your area. If the market is oversaturated or if a large, well-known shop will be in direct competition, you will need to brainstorm ways to make the store unique and valuable to the community.
3. Acquire an Outstanding Inventory
The only way to attract customers is to stock the store with quality merchandise. If the doors open before the shelves are full, clients will be discouraged from coming back. Advertise for consignors in the local newspaper or on crafting websites and scour yard sales, auctions, estate sales, business liquidations and thrift shops for good deals. Become comfortable with bargaining and negotiating - these skills will be needed when interacting with consignors.
4. Design an Attractive Store
Customers will form first, and lasting, impressions of the store based on the atmosphere and layout. No matter how well-stocked the store is, if it isn't clean, bright, organized and attractive, customers will find another place to shop.
Visit your favorite retailers and study how the merchandise is laid out. Must-have seasonal items are placed in the front of the store and every day products are in the back. Smaller items that cost less than $10 should be displayed next to the register. These impulse purchases can add up to significant sales each month. It is also important to vary how the merchandise is displayed. A table of folded sweaters will stand out next to a hanging rack of jeans, while a sea of vintage purses dangling on the wall will attract attention.
5. Seek Community Support
It is crucial to reach out to the community for support. If the storefront is located near other businesses, team up to offer cross-promotional services and discounts. Dry cleaner or repair shop customers will likely be interested in your shop, while your customers may need cleaning or repair services after purchasing an item.
Also, brainstorm ways to partner with creative personalities in the community. If the store specializes in formal wear, an aspiring jeweler could sell original accessories, or a children's consignment store could partner with a photographer to offer discounted customer appreciation sales.