A follower of Too Good to be Threw recently wrote:
Hi Kate:
I bought your manual and it has really help me with my store, however, I am growing so rapidly that I am going to have to m
ake some changes and would like your opinion!
Right now I accept consignments everyday without an appointment (I’m open seven days a week). I have one part time employee but I am beginning to be overwhelmed with consignments. Last year I changed my policy andrestricted the number of items to 15 for each consignment. This helped and was no problem with my consignors. Now, however I can’t keep up and don’t have the cash flow yet to hire another part time employee.
So, my thought was to NOT take consignments on Tues. and Thursdays so I can keep up with the consignments (I allow my consignors to pick up any items I don’t accept within 5 days if they don’t want to donate. This is another policy I am thinking about changing to “donate only”).
Anyway, any thoughts/suggestions you have would be appreciated!
Kate replies:
Yes, it is hard, isn’t it, to accept all day every day…gets to where you are feeling like all you do is accept!
I’ll make some suggestions, but before I do, I would like you to think about one aspect of this situation, and I am going to put it bluntly, so don’t take offense and keep your mind open:
If you are so busy, so popular, what is keeping your overhead so high that you cannot afford more than one part-time employee? I think examining that question, and finding the answer to it, may well mean that you can stick to an all-the-time policy, and remove that “limit”, which keeps your shop so consignor-friendly… and which will make you a millionaire.
Okay, while you figure out why you aren’t making the big bucks but you’re getting overwhelmed, some thoughts as stepping-stones:
* Limit of 15: Absolutely the worst choice if you have to choose. Short reason: she picks the 15 she wants to get rid of, not the 15 that will make you and her the most money fastest. She’s not the shopkeeper; you are. She knows less than zero about what will sell; you do. Why force HER to make the decisions that impact YOUR pocketbook? You don’t require her to set PRICES, do you, so why would you ask her to make the selection of 15 of her things?
* While we’re talking fastest: Price your items to sell faster. Turnover is the name of the game, so you have space. (Although you don’t mention lack of space in your message, so maybe that’s not the problem.)
* (Maybe the problem is…and here, I am blunt again and my intention is not to shame or accuse, but to get you shook up enough to look with fresh eyes:) Are you too slow? Does it take too long to check in? Are you too painstaking in your procedures? Could you streamline procedures?
* Not taking consignments certain days: This is probably the best solution for the time being (that is, until you figure out why you cannot afford staff), but since you have had an open-door policy for whatever length of time, you are gonna PO some people. How are consignments managed if you’re not there? Does this part-timer check items in?
* It sounds like you’re all Drop-&-Run, all the time. If you are: D-&-Rs are great in many aspects, EXCEPT one. It costs you time to bundle, label, put into the storage area and make note of NTYs, and again, time to go get them, un-note them, and hand them back. That’s why, especially with established consignors, a quick pre-sort, or a complete check-in whenEVER possible, is more effective.
* If you are allowing inexperienced consignors to D-&-R, you’re setting yourself up for constantly (not just her first time, before she learns what you consider salable) sorting through “are-you-kidding”s…because with a D-&-R she’s not standing there watching you dismiss, without a second glance, old styles or obviously less-than-fresh items…in other words, she won’t have to be embarrassed as you reject 75% of her stuff, so she’ll stick every last item she has in the pile. What’s she got to lose? Nothing. What have YOU got to lose? Time and energy and good nature.
* With D-&-Rs, it’s best to make the pickup of NTYS a VERY important point to the consignor. I would suggest “please pick up before tomorrow’s close of business”. The five days you mention, or the 7 others use, DOWNPLAYS the necessity of immediate pickup. “If she doesn’t expect me to pick them up for 5 days, what’s wrong with 10?” At least with ONE day, you stand a chance of getting her back on the SECOND day!
* Declaring your shop “donate only”…whether of the NTYs in a D-&-R or ODs, if there are any… is a red flag to any consumer who has reason (or unreason) to doubt your honesty. Do not put yourself or your business in such a category if you wish to be successful and respected. Period.
Kate
Auntie Kate The Resale Expert 
[…] We talked about this issue here as well as here and we talked about when some items simply are not financially worth it to accept […]
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I would like to start buying some purses wholesale! I have searched the web and found a few,but didn’t think the quality was there! Any suggestions ?
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[…] Success is overwhelming this consignment shop owner […]
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[…] my post on how this shopkeeper is too busy to succeed […]
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Good points from all sides. I have recently purchased a consignment shop that I have worked for 18 years. The last few years have sales have dropped, and I believe it has to do with being overstocked.
I have limited order to 15-20 but people still come in with arm fulls. We take the best and send them home with the rest.
I price items at a 1/3 of what the possible would cost, but then most items sell when reduced. I am the only consignment in the local area. So I need suggestion how to increase my sales. As stated in another reply, my funds are low at the moment and advertising is expensive.
All suggestions would be appreciated. I have 3 part-time employees and most of my days and nights are processing to keep up with the abundance coming in.
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Another great discussion on this on going dilema! I like Deb’s view that the employees were thinking like consignors when checking in items, very perceptive! We continue to streamline and look for quality and sellability, price it low and watch it go. Our volume has increased substantially because we are turning over so many great items. It’s a lot of work, but it is really paying off. Don’t overprice….it’s more fun to sell it than mark it down!
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Thanks, Rachel, for your comments, but I would like to let viewers know just a couple of alternate viewpoints (AKA my viewpoints 😉 )
First, a consignor with an overwhelming number of items coming in. Nothing to sweat about. Dealing with one person with 125 items is MUCH more efficient than dealing with ten, each of whom has 12.5 items! You’ll either be tickled to get so much good stuff in one fell swoop, or relieved to have to say NTY once instead of 10 times.
Next, calling an appointment “some time to visit [with the shopkeeper]”. Alas, many consignors will understand that to mean that you and she will have a nice chat about husbands, pets, and pet peeves, which is probably not what you have in mind for 2:15 on Friday.
And lastly, a consignment agreement that states the shop can dispose of accepted, receipted items “found to be stained or damaged after being consigned” is leaving yourself open for charges of dishonesty, not a wise choice in any sort of business.
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We had the same issue when we opened our doors. Wanted to be nice and make everyone happy, so we had not guidelines on consignments. That lasted a VERY short period of time! We quicky learned (after one consignor unloaded a whopping 120 pieces in one visit) that you have to have boundries. I have a typed guideline spelling out what is acceptable to bring in and how it is to be brought in (clean, pressed, hanging etc.) We also began setting appoitments. For us this works. We have ‘trained’ our consignors. They know when they call that they are ‘scheduling’ some time to ‘visit’ with me. My employee puts it like this… ‘it’s like your clothes are going on an interview. if they don’t pass the interview they are not hired.’ Also I spend about 5 or 10 minutes with my consignors, especially new consignors. I look over their clothes & send back any NTY’s right then. The contract also stats that anything found to be stained or damaged after be consigned will automatically be donated. That keeps you from having to keep up with a bunch of stuff. These are a few things that help us. Hope it helps you also.
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What Sarah mentioned above about employees having a difficult time returning things was a major issue at Concepts, especially with newer employees. In many cases, the employees were identifying with the consignor and that consignors expectation vs me/Jan and the store and that’s why I flet it important to give them a stake in the store somehow if even on a small scale – their own business cards, the compensation plan and so on. They had to take their consignor hat off when they hit the door.
Additionally, consignors often perceive they are doing us a favor which isn’t always the case, we have to train them that we are doing them a favor. 🙂
Deb
Designs By Deb
http://www.designsbydeb.us
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Kate, I love where you said: “she won’t have to be embarrassed as you reject 75% of her stuff, so she’ll stick every last item she has in the pile. What’s she got to lose? Nothing. What have YOU got to lose? Time and energy and good nature.”
I have to make a note of this for my employees. They sometimes complain that’s it’s embarrasing to hand someone back 90% or sometimes even 100% of what they bring in, but really, it should be embarrasing – for the consigner! We give them back their items immediately with as much grace as possible, but it does train them for the next time.
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P.S. a shop in my area asked for advice on this same issue, I told her the same thing I just posted above, and she simply raised all of her prices thinking that is what I meant. I’m sad to say that she had to close her shop the end of August.
Just wanted to be clear that I’m not saying to just raise your prices. Instead, examine the average price per item sold, and consider improving that number by being pickier, and attracting a different breed of customers who will pay more for better quality.
At least that is what worked for me. I’m a tiny bit overwhelmed at times, but not nearly like I was before.
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Discovering why you are so busy yet don’t have enough money to pay an employee is so very important. I had the exact same problem 1 1/2 years ago.
My problem, I was taking items that weren’t good enough, and weren’t selling for enough money. The resale shop survey helped me realize that $6 was NOT a good average price of an item sold at my shop.
With my lease and overhead, that number needed to increase. It was a slow process. We stopped taking children’s clothing b/c the quality being brought to us wouldn’t re-sell for enough money to be worth it. This was a big part of the problem for me, it takes just as much time and effort to accept, hang, tag, move, markdown, and sell a $3 item as it does a $30 item. I was working way too hard, for not nearly enough money.
I am happy to report that the average price of an item sold last month was $10.85 which is a little bit down from normal, due to a summer clearance rack I kept up longer than usual due to the extended hot summer weather we’ve been having.
I would love for $20 to be our average price per item sold, but in my area, I would be waiting a long time for just the right customer to pay the bigger prices.
I have begun targeting teenagers who, in my area, spend the most money on clothing. We sell tops between $7-15, and jeans between $10-30, tops being our biggest seller followed by $8 necklaces I buy wholesale for around $3. The purses I buy wholesale sell great, and they bump up my average price per item sold, as they sell for around $40.
High turnover, medium prices, and a clearer vision of my target market, has made my life at the shop a lot more pleasant. I’m not wasting my or my employees valuable time dealing with stuff that didn’t carry it’s weight. And, as a bonus, it’s put a little extra $ at my disposal too.
HTH
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