How to open a consignment or resale shop in 10 easy steps:
Tens of thousands of consignment, resale, and thrift shopkeepers have used Too Good to be Threw, The Complete Operations Manual, to start thriving businesses. When people ask me for the “short version” of my 200+ page manual, I give them this checklist so they can decide of a resale shop is for them.
1- Determine a desire. Is this truly what you want to do? Consider exploring the field thoroughly before you
invest your energy, time, money…and heart…in it. The investment will pay off: either you will start your business ahead of the curve or you will decide that resale shopkeeping is not for you.
2- Know if there’s a need. What shops exist now in your marketplace? What are their strengths and weaknesses? What non-consignment, non-resale venues are there that will compete for your marketplace’s dollars?
How will your shop serve your potential clientele better? What do people in your targeted area want/need, and at what price level? Are there enough future people to make a business profitable?
3- Choose your categories. What will you sell, based on what you discovered in step 2? Be careful to choose what people want to buy, not what you want to sell. Selling your favorite items rather than your audience’s, is one of the surest ways to go bankrupt.
4- Plan for profit. Do a financial plan and be strict with yourself. Estimate expenses high and income low. Include a reasonable amount for self-compensation. (If you can’t squeeze a living out of this, you’re probably not going to be real happy…even if you don’t “need” the money.) Have money ready and willing to be spent. That includes the boring old advice of 6 months’ overhead ready to be tapped if needed, and 6 months’ living expenses. Nothing will make a new shop fail faster than lack of money, except bad decisions made based on lack of money. Don’t strangle your baby. Give your dream a chance to come true.
5- Locate and equip. It’s scary to choose a location and a lease when you’re a brand-new retailer. Choose wisely. The dollar amount is nowhere near as important as the visibility. It’s an old retail adage: your rent + your advertising costs are equal, whichever way you skew it. Cheap rent = less visibility = the need for more advertising. Expensive rent = more visibility = advertising can be somewhat less frequent and expensive. Somewhat, though. Include and SPEND advertising money in your budget.
Oh, and don’t obsess over wallpaper borders until you get your merchant account for credit cards set up. You’re not decorating a home, you’re running a business.
6- Get married to Caesar. Be honest, aboveboard, transparent in all your dealings with suppliers and shoppers. The saying Caesar’s wife must be above suspicion simply means that if one is to be trusted, there must not be a hint of dishonesty or willful deception. A clear, crisp consignment agreement, thorough accounting for others’ possessions, and willingness to make good on your mistakes are necessary.
7- Pay attention to what your clientele wants, needs, and will pay you a healthy profit for. When I was in college, I ran the student-body-owned clothing shop in a small town. It had struggled for years, mostly as a retail lab rather than fulfilling what this isolated village needed. I was able to add several clothing lines that students couldn’t get elsewhere; traffic and profits shot up so much, we opened 2 more stores…in a 3-block-long downtown.
Make NO major, cast-in-iron decisions that you cannot change. The includes calling your shop by its merchandise. Many’s a shopkeeper who regrets calling her shop Kidstuff when she decides to expand her merchandise offerings.
8- Flexibility. You’re a consignment shop, but spending too much time dealing with low-dollar items? Be flexible enough (and fiscally prepared) to decide that buying outright would work better for small-but-pertinent items. If you are a buy-outright secondhand shop and you can’t afford to buy those designer items, take them on consignment to lessen the risk.
There is no Big Momma in the Sky watching to see if you play by your own rules. They are your rules, and you are allowed to change them as needed. You never do layaway, but this is the only buyer interest you’ve had in that cumbersome armoire? Sure, you’d like to sell it out the door, but to refuse to take half the price now and half when he gets paid again and can borrow a truck to move it? Silly shopkeeper. Of course you’ll be glad to do that deal.
9- Invest wisely. Before you spend money, think about how that money will make you money. Your money should serve you, not vice versa. Small amounts saved here and there (making your own coffee versus buying it) can actually be the engine of your success. Conversely, spending on salaries rather than being short-handed and unable to properly serve your customers is an investment in your continuing success.
10- Continue refining and learning. Tactics that worked well for you in Year Two might not be the perfect solution in Year Five. Just as the styles of clothing and decor change and thus your acceptance parameters change, so will your knowledge and desire to fine-tune your company. Take advantage of not only Too Good to be Threw and HowToConsign.com, but also the help available through our Products for the Professional Resaler.
Auntie Kate The Resale Expert 
Hi am currently in Texas and am interested in open a consignment resale shop but I don’t know where, how, and cost to get a license advice needed pls.
Hi Loveth, If a license is needed, your local authorities would be the ones to ask. Take a look at the “Your Tax dollars at work” section of my Too Good to be Threw Links page to figure out who that would be (and lots more helpful links too). And best wishes on your shop!
Hi! I have recently discovered a love of consignment – both selling my old clothes and shopping for new (to me) items at local consignment shops. However, I recently became pregnant and realized that there are no maternity consignment shops around me! Once I discovered the need in the area, I had the thought of (someday soon – a little while after this baby comes) opening my own maternity consignment shop. Since then, I’ve been spending a little bit of time researching and have LOVED your site (thank you so much for sharing your wealth of knowledge!!!) Although I’m worried I might have too narrow of a focus, maternity seems PERFECT for consignment. There’s always going to be pregnant ladies to sell to, they aren’t going to want to spend a lot of money on clothes they won’t be wearing for long, and most of the clothing will be (hopefully) very recent – women will be consigning items they wore less than a year ago. Have you, in your experiences, been able to tell if maternity consignment is a successful area? Do you think it’s too narrow of a focus? Do you have any suggestions of other categories I could include? (I’m thinking nursery prep, possibly nursing and newborn stuff?) I also definitely want to include displays and products from local crafters – I’m all about that!
Hi Sara, Congratulations on your pending arrival!
While there are certainly successful maternity-only consignment shops, there are also some caveats attached to this business plan:
* First, are there ENOUGH expectant mothers in your market area to support a business? And out of those expectant mothers, how many of them will actually buy 2nd-hand… and buy ENOUGH to make a shop profitable to the extent YOU want?
* Second: How many newly-delivered mothers will have the desire or even the time to consign? Or will they hold onto their maternity clothes “for the next time”, loan them to friends, or (as my sister did!) BURN them because she was so sick of them?
* Being a new mother and a new shopkeeoer at the same time can be daunting. Be sure you have the stamina and family support to manage both!
of course, these are all obstacles that can be overcome with realistic expectations, but please go into this with your eyes wide open. Next to your “What to Expect when you’re expecting” books, I suggest you put my “What to expect when you’re wanting to open a resale shop” book: Too Good to be Threw Complete Operations Manual for Consignment & Resale Shops.
Best wishes, and be sure to come back to the TGtbT family of sites and let us know what happens!
Hello my name is Norma, I have 3 sisters that are interested in opening a resale/consignment shop. We have always gotten along together and I know
it would work out and also know how important to do it legally with lawyers as
when it comes to money it can change people. We have always gone to resale
shops as our mother used to take us to the Good will stores back in the 60’s and 70’s. To this day we still like to shop at different stores and we always got great bargains. i figure if we combine the expenses and our retired husbands
can also help out. The wives still work and don’t retire for another 4 or 6 years more. Meanwhile we can still help out whenever possible as we have no small children to attend to. The wives have the accounting skills and the men have the muscles while all of us have the brains.
I want to open a used baby items store and sale used cribs ,to new and used strollers , highchairs . how much money should I invest in $ 5000 or less .
Hi Beatrix, Good for you! As to how much money to invest: are you thinking just in inventory, or operating costs/ cushion etc? Sad to say, either way, $5000 won’t go very far. If just in inventory: consider your space and your marketplace: how many pieces of equipment will be enough to tempt customers in… 15 strollers, 20 high chairs, 20 cribs? That’s 55 pieces right there, without all the other equipment customers may want.
Please familiarize yourself with the recall lists on baby equipment, too, before you start buying. You don’t want to buy goods which are dangerous or illegal to sell. Start here: http://www.cpsc.gov/onsafety/2011/06/the-new-crib-standard-questions-and-answers/ for your research.
And be sure to come back and tell us how you’re progressing!
Hi. I have been saving for a children’s resale boutique I have a lot of friends who have donated and some who want $$. How do I know what to buy the merchandise for? What’s the best price so that they are happy and I can still make a profit!
Hi Ronni, Thanks for commenting. How you know what to pay for something involves a lot of factors:
* First, what you can sell it for. You won’t KNOW that for sure until your shop is up and running and you have enough customers to see if your pricing hits their sweet spot.
* How much profit will make your business profitable. Sure, we could all sell things for minimal profit, but what profit do you need to continue operating? Your overhead, your time and talent and effort, and even the investment of your working capital.
* How “happy” you want your sellers to be. This sounds strange, but it isn’t really. You certainly don’t want them ecstatic, because that would mean you paid them way more than they were expecting. And you don’t want them discouraged so that they will never utilize your services again. Some sellers will be easier to “make happy” than others, and this takes an enormous amount of understanding people and experience.
Because buying outright (BOR) is much more of an art than consigning is (since in consigning, you share the profits and the risks with the owners of the merchandise), it’s difficult to open a shop as a BOR, especially if shopkeeping, running a small business, advertising and merchandising are all new things you’ll be learning on the job (and on your savings!) However, if you’re sure you want to BOR, be sure to read not only the manual but also The Big Book of Buying Outright
Be sure to stop on back here and let us know how it’s going!
Me and my girlfriend are going to open a mens consignment shop in our area. Auntie Kate we are needing the merchandise, we have some but not enough to open.
Check out the pages of the blog, and of course you will want to go through the entire Too Good to be Threw web site, especially our Start a Shop Page!
I have a tanning salon I am reopening my family owns the building so I’m lucky enough not to have to pay rent. I have 4 tanning beds with brand new bulbs in excellent condition and clothing and shoes for resale however I have no money to get started. No one helping/advising me. PLEASE HELP
Hi K, thanks for visiting here on the blog. I am sure by now you have explored this site, and noted well all the other sites I maintain to help with running a successful consignment or resale business. Check out the pages of the blog, and of course you will want to go through the entire Too Good to be Threw web site, especially our Start a Shop Page! Best wishes
Thank you for all the great info and write ups , questions etc very helpful. I have enough, no lie, to start a business right now. i just need a building, and will look into a home/w/business space, would work for me.
since I recently retired & need more money to exist, this sounds like a great business for me & some employees eventually.
If it does well, then I would consider buying a second building, for the excess, but for now, I would like to just get rid of all the goodies I have collected at so many garage sales/thrift shops, over the last 12 years of Picking. i always had it in the back of my mind to have a nearly new shop. w/never used & in great cond items, collectables, books Cd’s Craft supplies, oversize clothing (fashionable & never worn or nearly new) pictures/frames and such.
Am really excited, but will need help I think. lol
ttfn. Georgi
Glad you’re excited, Georgi! Yes, of course you don’t want to re-invent the wheel, so before you go any further, I urge you to read the Manual and possibly do one more thing for me:
Have a pop-up sale before you commit. Sell your own stuff, consign from a FEW friends. See how it goes. Why do I suggest this? Because getting, selecting, pricing, and dealing with consignors (or sellers or even donors) can be a HUGE stumbling block, and having “enough to start my own shop” is very temporary… within days of opening a store-front, you will need lots of incoming. So DIP your toe in before committing… especially if cash flow is an immediate necessity.
Best wishes, and we will watch for further news on the Georgi-front!
My daughter and I found the prefect place for a consignment shop.. heavy traffic by a restaurant. I am scared to death it will not work I do not even know where to start . I want to sell new and used clothing for entire family help please where do i start!!
Congratulations! Where to start? Right here, on Too Good to be Threw at http://TGtbT.com! Our Start-a-shop page will get you going: http://tgtbt.com/startashop.htm And here’s all the entries on AuntieKate the Blog that I’ve tagged “Starting a Shop”: https://auntiekate.wordpress.com/tag/starting-a-consignment-shop/
Just do not do a single thing more until you’ve thoroughly read, highlighted, marked-up and dog-eared the Manual. It’ll answer questions you didn’t know you had, guide you in setting up your shop and your marketing plan and even, what you will carry. But MOST of all, it will make sure that all your effort, time, money and pride are focused on SUCCESS. http://tgtbt.com/manual.htm
We’ll keep an eye out for your future endeavors, Joy!
I like this imfo. im looking into what licening i will need to open a shop any info would me welcome
Tina, you’d need to ask your local authorities about this. On our Links Page at TGtbT.com, there’s a link you’ll find helpful. But before you get into the legalities, find out if resale is the industry for you with Too Good to be Threw Complete Operations Manual for Resale & Consignment Shops
Just stumbled across this site both my husband and I have been layed off from our jobs 2 yrs ago. As you can imagine we depleted our savings, and now taking from retirement funds. We are in our early 50’s, I have worked retail as a assistant manager for 10 yrs. Ive been talking to my husband about leasing a store, and opening either a consignment or second hand store, Ive been reading the comment section, and plan on going to your site,thank you so much for offering this site… Alice
My best friend and i are considering opening a thrift store. We have looked at buildings, we already have enough merchandise to keep us going for months, Once we see what is fast moving we plan to start accumulating again. We have enough cash on hand between the 2 of us, wich also helps with costs. Our biggest obsticle is with our business plan. How in depth does it need to be and who will see it if we do not have to borrow money to start up our business?
Hi Laurie, Your business plan needs to be in enough depth…. especially as you are planning a partnership… to keep the two of you on the same page as challenges arise. Now, remember that a business plan is not chiseled in stone, and that you can amend it– together– as you see fit.
The biggest thing you might want to be concerned with at this point is really your partnership agreement. Work on that, write it up, ready for your signatures… then, BEFORE either of you signs it, go see your lawyers. Separate lawyers. Let these folks point out to you all the places a partnership can get messy, thereby hindering the business and possibly affecting your friendship. Do NOT skip this step if you value your friendship and value the time, effort, money and pride you are putting into the business.
Oh, and I would be remiss if I did not mention that you need my manual. And whichever of the other dozens of materials on http://TGtbT.com/shop.htm . Don’t be like the partnership I just this week watched die before my eyes… a partnership that thought they “couldn’t afford” the manual, so they didn’t buy it until they’d been in business 6 months…. and had set up everything from location to the placement of their merchandise, wrong. They closed after 13 or 14 months in business even though for almost every one of those months, they were paying their overhead. The slow season killed them in less than 8 weeks.
Hello,
I am a 30yr old Wife and Mother of 4. I have been an at home mother for the past 14 years. I graduated High school and stepped into Motherhood and shortly after Married life.
I have learned to shop smart over the years! Growing up my mom shopped thrift stores….
We have lived in our home (rent) for the past 11 years at 300 a month. We have NO debt and our Bills add up to 1200 a month at the MOST! We own our vehicles and I have no credit cards.
I ABSOLUTELY LOVE Thrift shops, consignment shops and Resale shops! I volunteer at our local children’s consignment sale that are only twice a year so I can get first pick of the goods 🙂 I Absolutely love being there and usually am there longer than my set time!
Over the years I have done yard sales BUT not your typical yard sale. Being a mom of 4 I know what I want when I am shopping. So I set my yard up like it is a store. I have made some VERY nice money doing this and have MANY yard sales throughout the Spring/summer. (well I have to say I stopped selling at the twice a year consignment sale that I volunteer at BECAUSE I make more money selling my own stuff) But that’s just it!!! I don’t want to just do this in the summer and in my YARD!!
We do have a new consignment store here in town BUT I have to say their children’s area is NOT so good and OVER PRICED to say the least!!!! Parking is on main street and there iis little to no parking…..20 miles away is a children’s consignment store BUT They are NEVER open!!!
SO I have been talking about opening my own Children’s resale shop for several months now. Working on my business plan has been a long drawn out process. (still working on it…. I’m finally feeling good about my name….Unique BUT definitely lets you know what the store is) Don’t really have anyone to talk about my plans and ideas…my husband works out of town so……….
This scares me to death…. creating debt……..I’ve never done anything like this before!!
So I guess my question is Does ANYONE have any pointers for me? I have bought some of your books from the site and definitely am more excited than ever!!! But SCARED to death!!!!
Thanks so much for reading my book and hope to learn some great pointers from you guys 🙂
Mother of 4 in KY
Hi I live in Ky and was wondering what area you where in and thinking about opening up a store. I would love to see more thrift shops around. I also love shopping the sell for the children’s clothing twice a year. I am a stay at home mom and have 3 girls. As they start into school and give me a little more time I think of what to do. I love your idea. I would love to find a place to sell my hair bows tutus and such girl things. With having three girls I find it cheaper to make all there bows and such. So over the years I have made there’s but I never have sold any. Now with them not needing as much I would love to continue to do this to pass time but would need a place to sell them. I am not interested in opening up a business but going to a consignment shop and selling them. I wish you the best of luck with your store and hope it all works for you. I think it is a great idea!!!
Brandy, I am sure that many of your local consignment shops would love to have a local supplier of these items. Have you contacted the Kentucky stores who are Sponsors on HowToConsign.com? You can find their links on our Clickable Directory and Zoomable Map here: http://howtoconsign.com/find.htm#Kentucky. Since these are professional resalers, be sure to present your line of products professionally. Know how much you want to receive for your handiwork, read the shop’s consignment agreement, and keep each shop well-stocked with variety which is KEY to selling impulse items like these.
I am wanting to open a home goods consignment shop. We have several clothing consignment stores in my area, and 1 that also has some furniture but it is not very inviting or set up very well. I am studying to be an interior designer and this will be my starting point. I know that mattresses can’t be resold, but what about sheet sets and other soft furnishings? And what is the typical cost to start up my own shop, including leasing a location? How much money should I have to start with?
Susanne
Hi! I really want to start a consignment store in my area but I rescently had to file for chapter 7 bankruptsy because of a divorse that is still yet to be resolved. Im a daycare provider currently and have been for the past two years since leaving my husband. Now that I am certain that I will be living in this area and need to support my 5 kids for the most part I really need to make a better living. Not to mension I just don’t think I can handle daycare for to much longer!!! Do you typically have to have a good credit record to lease a commercial building? Also I have somone who is in the business already who is looking to partner with me and supply all the racks and everything needed to set up a store right away even the first inventory! He asked what I thought would be fair for sharing the profit. He wants me to pay him 5,000 to make sure I have some skin in the deal. He doesn’t want to run the store at all though because he has his own to run but he has an endless supply of goods that he would want me to sell. He would bring a truck load every week or two. What do you think about that? I don’t have a lot to invest in this so I think it sounds good to partner with him.
Hi Vicki, This could be a great deal, or your worst nightmare. Just what will you be getting in return for your investment of $5000? I’m sure this “partner” is not giving you merchandise to sell; I expect he wants a cut of the income. Who’s responsible for the overhead? Who’s gonna sign the store lease? What happens if you feel the inventory he’s supplying is not what your customers want to buy, or if you want to invest in a large amount of advertising, or if you start developing sources for merchandise on your own, independent of this partner? If you decide that some portion of the shop’s inventory needs to be gotten rid of at very low prices? Lots of work head for you, to forge an agreement, and that means lawyer fees. Don’t stint now on working out every conceivable possibility and making it legal… you’ll have, I’m guessing, a goodly sum in lawyer fees. Please please don’t go into this “hoping for the best”… prepare for not necessarily the worst, but certainly for all eventualities!
I would have LOVED to have a hard-working honest partner to run, basically, an outlet store. So I am not saying this can’t work, but I am saying, make sure you thrash out the details and make it legally binding. And be sure to come back and let us know how it’s progressing!
My Lord it was such wonderfull site to view,
it had so many answered to question I am so greatfull I found you
thank you very much for your help to every one of us!
I been searching for weeks for some clear sujestions due tome wanting to open up second hand store in Pittsburg, california
after reading imformation from your site I fell reliaf of so many questions in my head.
Love and regards
Ana Mendez
Hi Ana, So glad you found us! Please consider yourself invited to explore ALL the consignment and resale resources on Too Good to be Threw, The Premiere Site for Professional Resalers, http://TGtbT.com and best wishes!
I am thinking of opening my own resale shop but I am scared to death. I am about to graduate from college and have been buying and selling “junk” through the internet and flea markets to pay my bills while in college. I think I have a good idea that no resale shops in my area are addressing, but I am still worried that I don’t know enough about the resale business to lease a store front, hire employees, do the taxes, and everything else besides the buying and selling aspects of running a store………..Any advice?
Hi Mr. Scared, Well, it looks like even after graduation, your education will continue 😉 … with the Manual and our many Products for the Professional Resaler. Have a look at our shop: http://TGtbT.com/shop.htm and see what you will add to your list to Santa or for graduation presents. What better gift than the knowledge to start a satisfying and lucrative career?
I am in the process of opening in Suffolk County, New York and you actually are not allowed to just resell…I just found out for myself yesterday! You must obtain a second-hand goods license which is a $200 application fee and a $400 license fee (for 2 years.)They do a criminal backround check and you have to interview with consumer affairs. Crazy, right? Not sure if that’s what you meant, but figured I’d let you know.
Ah, what a wonderful income for your county government. Imagine the bucks they collect… it’s called “hidden taxes.” Actually, I am surprised they didn’t require your fingerprints as well. After all, we all know consignment shops are hotbeds of criminal activity, rather like …ummm, county council back offices? Take a peek at the article I reference here: https://www.facebook.com/sarasotakate/posts/2427938985028
Hi! I live in Suffolk too. Can you please let me know where is your store?
Hi there,
My sister and I are brain storming on ideas of for opening a childrens resale boutique. Although we do plan on having clients consign with us, we are looking to purchase alot of our merchandise. We have been stocking up on items from garage sales,estate sales, and craigslist. We are getting items that are free or in bulk for a great price. Are we aloud to resell it? Eventually too … once we open, or do you hve any othr suggestions for us? We dont want to be frownd upon when someone may walk into our store and recognize items that we bought from them fora great price. Please suggestions would be great…. Thank you!
“Are we aloud to resell it? ” Why in heaven’s name would you not be “allowed” (by whom?) to sell things that belong to you?
“We dont want to be frownd upon when someone may walk into our store and recognize items that we bought from them”… did you force them to hand their possessions over to you at a price they didn’t set? Is that item X not worth more to YOUR audience than to the audience at that person’s garage sale? Isn’t THAT what your business will be all about?
Jenny, we look forward to following you on your journey to capitalism.
Im planning on starting a modest apparel resale shop. Im needing help with some names for it. Thanks Amy from southern Indiana ( adjadean@aol.com )
Best wishes, Amy! There’s lots of opportunity in our industry. Choosing a name is great fun, and it’s important to choose one which reflects the image and mission of your future shop. For that reason, we have compiled 499 Names which you can download from the Too Good to be Threw site, at http://TGtbT.com/shop.htm#5
Keep in touch as you progress… we love to read about start-up success!