“I have two kids, and I shop consignment,” the woman
said. “So I basically figured I know how to shop for it, so I can sell it. Then I ran across this empty store and here I am! It’s so much FUN, running a consignment shop. It’s just like the garage sales I ran for my neighbors.”
Less than 3 years later, her resale shop closed abruptly, leaving unpaid consignors, outstanding debts, and a very stressed-out family.
“I never realized it would take so much of my time. That it was so complicated. I was taking bookwork home with me every night, and my kids never got to do what their friends did, because they were always with me at the store,” she said. “It’s hard to run a business when you have two bored kids whining at you all the time.
“I priced things good but I just couldn’t sell enough. And the cost of advertising? I couldn’t do it. Every day someone would say How long have you been here? even after I’d been open 5, 6, 7 months.
“I don’t see how consignment shops make it. I don’t think they do. They must all be hobby-businesses.
“My husband finally said that the shop was just costing him too much, and we hadn’t been able to take a vacation for 3 years, and he never saw me anymore and when he did I was too tired to be any fun. So I had to close the shop. That, or give up my marriage and I couldn’t afford that…even after almost three years, I wasn’t making a living and we had to put money into the business about 5 out of 12 months, the months when it was slow.”
No one goes into any business planning to fail. But many start-ups DO fail. Why is that? Lack of capital and lack of knowledge.
Alas, all too many newbies think that taking goods on consignment means they don’t need the recommended 6 months’ of living AND business expenses ready to tap if needed. Or, for some reason, they figure the recommendation is for other people, not them. Every business needs the capital behind it to get started. And to survive not only the get-established period, but the slow seasons, the local blips on the retail radar, and the inevitable mistakes any entrepreneur makes.
And that newbie will also realize, in short order, that a love of shopping resale, cruising garage sales, and haunting rummage sales doesn’t turn her into a wise shopkeeper. Not even a background in running neighborhood sales or church bazaars is enough. Without a thorough grounding in what running a consignment or resale shop involves, all the time, money, effort, and pride expended will not be enough to succeed.
And that’s why there’s Too Good to be Threw: The Complete Operations Manual for Resale & Consignment Shops and the dozens of other Products for the Professional Resaler. I hate to see that sparkling joy and eager enthusiasm get wasted.
Auntie Kate The Resale Expert 
Hello! I am in the process of looking for an office space to start up a girls/women “online” resale shop. I would like to build up business and start out this way, prior to considering a storefront.
There are a few guides out there that I would like to purchase, but mainly contain info regarding opening a resale shop/storefront.
Are there any “how to” operation guides and/or info specifically for online resale shops/websites?
Your advice is greatly appreciated!
Not that I know of, E-Lou. Of course, online and bricks-&-mortar, especially for consignment, have much in common. Thanks for asking.
We are the verge of opening a consignment shop. More as a side project though. Do you have any other articles that would help us avoid these pitfalls?
Welcome Robert! There is a LOT for you to read; take a look at all three pages available in the tab menu at the top of this page, especially Consignment, Resale & Thrift Info which lists not only popular posts but all the OTHER places you can gather free info.
For articles, don’t miss my website, Too Good to be Threw. There’s featured articles on our front page there, an archive of past articles, and even our “Messy Back Room”, full of odds n ends!
And when you’re ready to buckle down and develop your business, of course there’s The Manual and about 40 shorter, quicker, Products for the Professional Resaler that cover many of the topics you’ll be thinking about and planning for.
BTW, love your shop name!
I am a retired school counselor of 30 years. I have been retired for 3 years now. I keep busy with one teen and household projects. I am getting a little bored andf don’t feel very productive. I don’t want to go back to Counseling, because as much as I enjoyed it, it was stressful. I’d like to do something fun, working with people and making my own hours. I’ve thought about a consignment boutique. I don’t have a business background, but am a quick study. I do have the capital to start up a rental storefront. I would not begin this venture until I know I’m ready. I’m wiiling to do the research and take any business advice that would be helpful.
Thanks to whoever may want to offer their expertise.
Terri
Welcome, Terri! Working in consignment is fun, yes, but probably every bit as stressful as your prior career. There’s lots and lots of help for you here on the blog, and of course on Too Good to be Threw at TGtbT.com and its allied Products for the Professional Resaler. Take a look as well, at our consumer-centric site with its Resale Directory, at HowToConsign.com.
We all look forward to following you on your new adventure!
HI. I live in the country, and have an addition on the house that isn’t doing anything. I was thinking of opening a children’s consignment and play-area, since I have the space and will not have to be paying any rent. There are a lot of moms in the area. I was thinking of maybe starting out that way, and then, if the business catches on, I can renovate our wooden quanset into a nice little coffee/fireplace/consignment with an area for a playstructure. How much of the financial risk is mitigated if I don’t have to pay rent? Any thoughts or experience on running rural businesses? P.S. I have small children, but they’ll be in school soon, and my husband or I are always at home. I’m mostly concerned about the time involved in bookkeeping, sorting and inventorying the clothing. What kind of hours does this involve in a typical week, for a small store?
Hi Beth-Anna, Nice to hear from you! Best wishes with your idea. To answer your question, of course the number of hours depends on the amount of business you do. No business, no hours; goin’ gangbusters, you’ll need an army of assistants! I’d look first at what hours your shop will be open. Many beginning shopkeepers find that they can easily manage the paperwork and stock grooming during those hours, between customers. So your life-style choice will be “When will the business be open?” as you consider when your shoppers will be likely to come and when you can be there.
Looking forward to hearing of your progress!
What do yo think about buying a consignment shop that is already in business? What would be a fair rate? The cost of the items already in the store, plus the “brand”?
Hi KS, Well, of course a lot more is involved in buying a business. To start, if the merchandise is consigned, the “cost of the items already in the store” is not an issue, and goodwill is so infinitely variable! Then there’s fixturing, equipment, what the lease if any is like… but above all, there’s cash flow. I think we can all agree that all other things being equal, a shop which grosses a million dollars a year is worth more than one grossing $100,000 a year.
Buying an ongoing business can be beneficial, but it does require a lot of study. I suggest you start your research with our TGtbT.com Product for the Professional Resaler, the Business Valuation Kit, and proceed from there, which would include getting a specialist lawyer on your side. Best wishes, and let us know how it goes!
please tell me which is better buying out right or consigning others things? Kasha foret
Hi Kasha. The answer to your question depends on so many variables, it’s impossible to advise you on this. What “better” is for one person/ place/ situation, is not for another! I would like to recommend that you study the Manual, which contains information on both methods, as well as our book on buying outright, and I am sure that you will feel much more confident in your choice when you do!
Kate I need your advice because I really have a dilemma. I have a chance to move to a bigger building for 400.00 less a month in rent. The landlord told me the wrong rent amount but he is willing to stand by the amount for a year and then he would go to 725 a month, but if I do all the work, I’m going to negotiate this amount. The place used to be a former Papa John’s and the decor is horrific. It would need to be cleaned real good and painted. Part of the ceiling is missing where they came in and tore out the exhaust for the oven’s. The landlord said he would be willing to fix this gaping hole, but I would be responsible for the rest. My only other concern is some left over electrical pipes hanging from the ceiling. I would think this is the landlords problem to fix, not mine. I have about 880 sq feet now and I would have about 1300 sq feet in this building plus a whole lot of storage space. It sits closer to the street and I would have my own parking spaces unlike now. The barber shop next to me takes up all the available spaces and there is no room for my customers.
I guess I really don’t have a dilemma, I just need someone else’s opinion to push me into making this decision. I just feel that the extra 350-400 dollars a month would help me grow my business and I wouldn’t feel so stressed if I don’t have a good month. Even with the extra utilities, I would still come out ahead. Any thoughts and comments are welcome.
I agree, Sweet Repeats, you don’t have a dilemma. Sounds like the spot is good for the lower rent, added space and the exposure/parking. But keep in mind that getting the place into shape’s gonna cost (renovations, adding fixtures, advertising blast could well eat up a year’s worth of that $400 less a month); that you WILL lose some customers when you move (I moved 1-1/2 blocks, almost within eyesight and STILL lost customers); what the new lease involves.
So I guess what I am saying is: don’t count your rent check savings before they’re hatched, but even so, more/better space is always a plus, isn’t it?
Thanks Kate. I’ve already thought of all the renovations and I am totally in love with oops paint. Right now I can get by with cleaning and painting and I have a bunch of racks already that I don’t use. I make lamps and I can use these to add to the lighting in the store. I sent a proposal to the landlord, so we’ll see. I may just be staying where I am.
I live in NC and I’m getting a lot of hassle from one of my consigners about the percentage I charge. It’s 30 percent and they want to rent at a flat rate. Christmas is coming and I understand what they are doing to keep THEIR cost down. But dern! I’m the one with the expenses. Help!
Shannon, thanks for asking. From your comment, it sounds like folks want to rent space in your shop that’s theirs to put their goods in? If you’re crafts, that’s a common arrangement… renting a shelf or a booth… PLUS a percentage of sales, to cover the work you do!
Hi, I have a flower shop already that is not paying its bills, I am thinking of just having one section for my fresh and silk flowers shop and wreaths, and maybe setting up the front of the store as sections for people to rent and put arts and crafts and vintage etc in. How does that work? Do I charge so much space for so much and then when something of their’s sale does all go to them or do I take a percentage? I can not find any source of information.
Thanks.
Hi Tammy, It works any way you want it to! (Well, any way you AND YOUR TARGET MARKET want it to…)
Try googling rent a craft booth and variations on that to spend some time looking at all sides of the issue. I’m sure your floral industry association has info, a discussion board, and probably even specific guidance on this, since most florists show lots of other things in their shops!
Best of luck with it,
Kate
Tammy. I own a 3000 sq ft business that causes me grief with what you’re asking. The going rate in NC is 30 percent n space limitations you choose. OR you can designate a space for a flat rate plus at least 10 percent of the sales covering your cost of bags tissue paper credit card fees ext…a contract of your desire of how much you want to charge is recommended however I try to keep most of my stuff in my store just that…mine. I don’t have very many consignors because its easier for me but it is nice to have furniture AND clothes to offer your customers .. Don’t know if this helps but I wish you much success !
Hi Auntie Kate, I have been doing research on opening a consignment/resale shop for 5 years now. I currently rent space at a local antique flea market, where my sales pay the rent. I am interested in opening my own shop but like April I would prefer a store front online. I am also a full-time doctoral student and hold a Masters Degree in Business Administration. Is there any advice that you or the other posters can give me regarding online resale. Your comments are appreciated.
Welcome Katrina! Please consider this your invitation to visit our Too Good to be Threw Sharing discussion board on http://TGtbT.com, the industry’s premiere site for resale professionals. As a matter of fact, there’s LOTS of viewpoints there about selling online…and a search engine to help you find them! While you’re on TGtbT.com, don’t miss all the free articles and ideas!
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hello Kate,
I’ve been doing research on opening a kids consignment sop for the past 2 years. I purchased your book and while I learned alot about the business I am asking for any input on running a online consignment shop. I am saving for my store front and trying to finish school before I open my store. I wan to start online first. Thanks any tips are appreciated.
April
Welcome April! Please visit our discussion board, Sharing, at TGtbT.com and ask some of our many shopkeepers there for advice… they love to SHARE their experiences, tips, and of course the do’s and don’ts that they’ve learned.
Welcome Victoria! Have you visited the Sharing Discussion Board on my site, http://www.TGtbT.com? That’s a great place to ask specific questions since resale, consignment, and thrift shopkeepers of all types love to help and get help there! I invite you to participate any time.
Hi ladies, I’ve really enjoyed reading all your posts and I’m sure you will see me on here more and more. I’m doing my research, getting my funds together and just found a store front so I can open my own shop!! FINALLY. I’ve worked in 2 different consignment stores managing both and I owned a promotions and marketing company for well over ten years. So, my level of excitement is full force ahead. My question to seasoned store owners is this……how do you guage projected sales?? Is there a way to do that?
I have crunched numbers to see what I would need to make a month to cover all my outgoing debt but is there any way to do projections??
Thanks for any advise you may have.
Victoria
Hi i have read all the post,you know i do agree with it all depends on how hard you want it.i have three kids also a full time job and opened my store all on my one,there are days where it is very slow but,it you want it you will find a way,pass out more flyers that are cheap to make,make sales sidewalk sales,there are many more ways to advertise,if its a dream make it happen,yes i am here everyday,them go cook dinner spend a little time with my kids then off to work and all over again the next day but i am happy.
Oh Patti, I envy you! New Hope, what a wonderful place to live. And to deal with artists and crafters… you must love your life! I invite you to pop over to our Sharing discussion board at TGtbT.com . While most of our folks aren’t in your exact line of consigning, they have some darn good ideas to share, as I am sure YOU do!
I have a PA arts & crafts consignment shop in a popular tourist town in Bucks county PA.
I also sell my own art & crafts tath I make which reduces the payouts. I currently have about 100 consigners in the store and I take more everyday.
I work 6 days a week 10-12 hours a day, its really trying but its also wonderful to know that I am receiving all the support and positive community feedback.
I would love to keep in touch with others in the same business in order to network…
I had worked my way up at my regular job after 31 years, but was really getting burned out. I needed some more color in my life. I was lucky; my husband and I already owned a retail space in our downtown. So I decided to open a children’s consignment shop and be open limited hours and keep my secure job. It’s been a lot of fun. I’ve learned a lot and , yes, I work about 30 hours per week in addition to the 40+ hours at the regular job. But I enjoy it. It gives me a creative outlet. And my store’s bank account is slowly growing. I plan to retire from my regular job in 8 years and I will have my retirement job ready to go and expand at that time. I opened my store with items I had purchased at yard sales and continue to add to my stock that way. So I am one of my own consigners and make some extra money that way, but I do not pay myself a salary.
I am one of those who barged forward without a clue how hard this business would be. For me, the key was staying educated and on top of things once I realized how deep the water I had jumped into was.
I know dozens of business owners…a woman named Kate Holmes comes to mind… who started on a shoe string and managed to have great success.
I think it depends on drive and determination. How bad do you want it?
In my case, this stay at home mom of 3, 2 years of college, no business degree, no previous management experience, is working about 3 days a week and taking home a nice paycheck. And yes, it took 3 years of hard work and major sacrifice, but it can be done.
I know this is an older post, but it caught my attention. I am in the process of developing my business plan. One of the major concerns my husband and I have is the time committment and what do we do with the kids (we have a 6 mo. old and 4 year old…I stay at home)? In your experience, would you recommend I consider getting care for them at my home or having a sitter come into shop; not incuring the cost of a sitter and bringing them into shop; finding full-time care for them?
Of course, we would add this expense into the budget becuase childcare could be expensive. Any thoughts would be helpful.
Would you be able to run your business well enough to make it profitable with your children in your shop? Would they be happy in the shop, with their mother preoccupied 95% of the time? Only you can answer these questions. But I can say: running any business and trying to spend the same time with your children is basically impossible. Both jobs get short-changed.
Look at it this way: if you were anything… a lawyer, a waitress, a seamstress or an artist: could you give that job your all with your children in the same room 8-10 hours a day? Could you tell them to go to the sitter because Mommy is busy…. many times an hour? Would ANY of you thrive in that situation?
Find care for them at home. You both will be happier. Occasionally my kids can come to the shop, but never more than an hour or so at a time. Really, this job is way more work than you can split your time with your kids. If you don’t want to work without them, I would wait till your little one is in Kindergarten. I would never try this with a baby at the store. It will not be fun for anyone. Ten years ago, I had my two older boys with me at the store full time. I had no choice then, and I closed my store after 3 years realizing I was being a bad mom. We had a couple more boys, and after our youngest was in preschool, I reopened. I have been open again for 2 and a half years, and things are going great! The boys go to Boys and Girls Club after school, and I pick them up when the store closes. Good Luck!
Amen Kate! I was featured in a national parenting magazine for opening my store, and I thought the article really captured the essence of how hard start up is on your finances and family, but I get many, many emails from moms who saw the article and still don’t comprehend how difficult a business it is!
“I have four kids under 5 and will be bringing them to work with me.”
“I have to make a salary within 4 months.”
“I think the other stores in town must be raking it in, so I want to open one.”
These are direct quotes from people who have contacted me. I try and provide them with enough info to make them put more thought into it, but too many of them just barge on forward without the slightest bit of worry.