I get asked “Is now a good time to open a consignment or resale shop?” a lot.
Setting aside the current kerfuffle about CPSIA and its making basically everything that people 12 and under use or wear economically impossible to resell, and looking optimistically forward to the sensible voiding and rewriting of this well-intended law…
Whether now’s a good time to start a secondhand store has more to do with YOU than with the economy.
Are you ready to run a shop? Do you have the time, the focus, and the physical and mental energy to be there, 50-70 hours a week? Is your family behind your expenditure of focus? Or, if you won’t be in the shop yourself, do you have the resources to deal with staff?
Do you have set-up money? While Too Good to be Threw: The Complete Operations Manual for Resale & Consignment Shops shows a reasonable budget for lease expenses, utility deposits, sign and fixture costs, fixing up your location to suit your new shop’s image, advertising monies, equipment and supplies all add up awfully fast.
Do you have a financial cushion? Six months’ of personal living expenses. Plus 6 months’ shop overhead above and beyond that set-up money mentioned in the previous paragraph. Just sitting somewhere, available to use if needed.
Yes? Terrific! Now, what you need to do is start BIG.
That’s what I said. Start BIG. Make a BIG splash, jump into the ring all warmed-up and ready to TKO every competitor, from the other resale shops in your area to the new-merchandise stores whose customers you covet.
With all the media attention on resale, there are more folks willing to explore it. But these folks have great expectations, and you need to get your shop up to speed fast to win their business and their loyalty.
What’s the sense of reinventing the wheel? Of fumbling around trying to decide what your next ad or broadcast email should say? Of learning from your own mistakes (which can cost you thousands upon thousands of dollars) instead of using others’ knowledge to get your business off the ground and soaring immediately? Why fiddle…when your business could be burning?
There’s a wealth of knowledge out there for you that will make you more money, faster. Which will reward your hard work quickly. Which will serve your community and make your family proud of you (and past co-workers jealous!) For general retailing knowledge, I’ve listed some generic books I like. For specific info for consignment, resale, and thrift storekeeping, TGtbT.com , the Professional Resaler’s site, has a taste of what you need to START BIG, and its Products for the Professional Resaler has it ALL.
So, yes, if you’re ready, now’s an excellent time to open a shop.
More reading:
How to open a wildly successful consignment shop
Auntie Kate The Resale Expert 
I would not open a women’s brick and mortar resale store today, especially with the proliferation of online resale stores beginning to cut into sales. With the added competition, rising rents, rising utilities, rising labor cost (soon to be $15/hr. in San Francisco and already $10 in Seattle), rising credit card fees, rising insurance fees, etc., the brick and mortar model just makes less sense today IMHO. That being said, I would consider opening an online resale store, but the costs of a retail location is just becoming impossible! In my area one women’s resale store just closed after 31 years in business! Don’t get me wrong, there will always be successful stores, it’s just getting much harder to make the 60+ hour work weeks profitable! Sure, I pay myself a decent salary, but I get little return on the money I have invested in my store. Remember, the owners salary is NOT profit. If you can pay yourself a good salary and still have enough left over at the end of the year to put in the bank or pay yourself a bonus, then you’re getting a return on your investment! But few of us have a store that allows that, at least in my part of the country! So…open online or buy an EXISTING store that’s making a PROFIT but don’t open a new one unless you having adequate capital and living expenses for at least 12 months! BTW, thanks Kate for all of the “thought provoking” posts. Keep them coming!
LikeLike
Thanks Ashley, for your viewpoint. And it certainly is true that operating any B&M in the face of on-line competition is tough.
That said, resale is not Best Buy or Staples or Macy’s. I buy online often, but only for specifics: those cute shoes a friend has, a white braided belt with a antique brass buckle. Such targeted items are ideal for buying online (and that includes a LV Speedy 30 or the like, on resale sites) where you can compare, search, and be reasonably certain of finding the specific thing you want.
I think, though, that resale/ consignment/ thrift shoppers are buying, well let’s not call it “on impulse”, but “as seen where seen”. The woman who had no idea that the St John skirt looked totally modern with the Topshop blouse; the man who couldn’t resist a framed engraving of the city where he was born… or the harried mother who just wants to find pants long enough for her newly-sprouted 8-year-old!
There are many disadvantages to having an actual storefront, and it’s not a business for everyone.. but then, there’s challenges running an online resale site as well. I am watching, with fascination, the proliferation of these sites, and placing my private bets on which of them will be around in 2 years’ time. Fascinating business, isn’t it?
LikeLike