Most consignment and resale shops pay good money to obtain their consignors or sellers.
So why do they then limit their ROI by denying the very thing they are offering?
You write ads, tweet, FB, even devote the majority of your web site to getting merchandise in. You answer the phone and explain and explain. You create handouts. You send them to information articles like Cleaning out, Organizing, Feeling free! and Spiffing up to Make More Money Then, after all that investment, you make it hard for them to deal with you.
To blow off consignors or sellers by placing meaningless restrictions on their ability or willingness to deal with your store is
blowing your marketing money away.
What’s a meaningless restriction? One example is not accepting incoming goods for the last hour of your business day. Meaningless to the supplier because that’s perhaps the best time for her. It’s when she’s on her way home from work.
But the biggest meaningless restriction, from the supplier’s point of view?
Item limits.
Put yourself in your supplier’s shoes (or actually, don’t. She’s bringing them in to sell.) Why would she choose your business to resell items to, when she can only bring 15 items in at a time? Will she be delighted to make 3 trips if she has 45 items she wants to sell?
Of course not.
She’ll either go to another resale shop, or give the items to a charity or toss them in the trash. I know. I’ve done it myself. Yes, in a fit of pique over my local consignment shop’s “rules”, I gave a NWT $100 sweater to Goodwill.
This concept of blowing away the very people you need to make your business viable applies to NFP thrifts as well. When might folks load up the family vehicle and drive the donations over? Saturday late afternoon after the garage sale, or Sunday, during a family closet-cleaning. And yet, the receiving area of larger thrifts might be unavailable then… and at the smaller thrifts, the entire shop might be closed those very times.
Bottom line:
You need suppliers every bit as much as you need buying customers. If you wouldn’t do it to a shopper with a fistful of cash, don’t do it to a supplier with a trunk full of potential dollars.
Auntie Kate The Resale Expert 
First, I’d like to say I feel like I found a mentor in your blog posts. After eight years in business and being the only resale clothing store for over 50 miles to offer buy outright cash up-front at 30% or upffont store credit at 50% (versus traditional consignment), the challenge is always going to be the volume of people looking to cash in. About 10% of my store is actually on consignment at 50/50, which I offer on very exclusive items, designer items and higher end pieces that I do not want to buy outright.
In my first two years, I had no limit and people were dragging contractor bags to my store on “drop off days”. It was not unusual for us to be looking at 200 or more bags and thousands of items that we would have to go through, giving our “traders” two weeks to come back to settle up. An exorbitant amount of work, but at the same time, we had so much to choose from! The good, the bad and the ugly. We saw as much Neiman Marcus, as Old Navy, because we made it so easy for EVERYONE to participate. The problem with drop off days is there’s no place to put all of those bags that are coming in. Did you ever try to stash 200-300 bags of clothes at the same time? Very painful. in my first four years, I bought a box truck just to stash the incoming bags…and when I outgrew the box truck, I had to rent a basement in my plaza . The first five years were a blur as the store continued to grow and traders told their friends.
Offering cash up front makes things very tricky. There’s no way to do it except to have certain days and times, as well as a limit on items. Because one trader may break your bankroll in one day if they have five contractor bags full of good stuff.
While I have stayed true to my buy/sell/trade business model, last year I started to offer a VIP program (for a $20 donation to a local fund for teens), so traders could make private appointments with us, instead of being at the mercy of our calender (public drop off days). This worked really well.
This year, I am thinking of REQUIRING cash traders to become VIPS. Cash upfront is exclusive. No other store offers this in my area, so I feel like a $20 donation to our local fund for teens is a small investment for traders, to then be able to get cash up front from April-November.
Since we have lots of traders who love to shop in our store, I will always offer walk-ins for store credit every Monday through Friday.
Thoughts on any of this? I need greater control over the amount of traders who want cash. and I can’t keep doing these mass public drop off days where I end up with 300 bags to go through. I am my only full-time employee plus a part-time helper on the weekends, this year…
Wow. First Tammy I am in awe of your ability to do all this one your own for 8 years! I don’t think I could sling 200-300 bags of clothing around in one day, yet alone run the shop at the same time! By myself? Golly.
There’s lots of angles here… like, cash vs trade, when and how that gets decided. Do unwanted items get donated or are they labeled and sorted for later pickup (a nightmare either way… handling goods that make the business no money!) Creating a class of suppliers with different rules, which makes the business no money.
I am sure you have spent hours watching how high-volume BORs operate, such as Buffalo Exchange’s branches in the Boston area. No lugging, reaarranging, storing hundreds of bags for them! Look, buy, on to the next person. Maybe taking a hard look at staffing costs and complications vs. efficiency might be a worthwhile exercise at this point in your business growth?
Keep in touch, would love to hear how you decide to go forward!
I brought about 15 things to a consignment shop (the only one even remotely near me) a couple years ago and the owner (I know she was the owner) seemed genuinely annoyed that I only brought her a few pieces and none of my stuff was high end like Ferragamo or Loro or Prada or Gucci or whatever… She was rude… I just can’t get over the venom in her voice… maybe she was tired of people bringing her average mall brands and I can understand why, now that I am kind of in her position (I wasn’t trying to get into the biz then) … AND I can totally take being turned down, but that venom in her voice is difficult to forget. As someone in the business now, I can see that it was actually a good lesson for me on many levels. But, the thing is that she lost me as a customer, and yeah, I had only actually shopped there twice in the 2 years leading up to this point, but still… she lost a potential $50 to $100 in sales… lose 20 of us and that adds up… so it’s definitely important to be diplomatic with suppliers.
Now that I am looking at the possibility of opening my own resale shop, I can see myself getting a little annoyed at people bringing in 12 garbage bags of clothes for drop off, especially if it’s stuff that thrift stores would turn away… I think I might have a 3 laundry basket at a time rule or something like that…. then, they can bring in another load after we settle up on the first 3 baskets. I would probably let them slide if I thought their stuff was going to be highly sellable. I will probably use the ‘ish on the sign/website where I state my rule about the 3 laundry baskets full as was found elsewhere on this blog… good one! Maybe I will make it clearer by saying in person/on signage/on website… something along the lines of “If there is not a backlog of drop offs, then fine, we’ll go ahead and look at 5 or 6 baskets” or sim. Or it will be no limit UNTIL it gets to the point of avalanche, then we go to code 3’ish baskets… The power of ish!
Good stuff to think about, thanks!!! I am thinking I will wait a few years before making this happen, rather than jump into it too quick. i already have a 700sf commercial location almost exactly like Kates), but it’s where I process, store & ship stuff I sell online. I keep thinking I should expand, but I am definitely going to be taking a few years to learn more and prepare better. I am thinking I will set up my shop as a buying center only while I amass a reasonable amount of inventory for the brick and mortar, build a potential customer list for when the store does open, while I grow the online portion… I was thinking abut doing this within a year, but now i am thinking 2 years.
Looking forward to buying the manual and some of the other PDQ’s!!!
Crystal, you had a great “learning experience”, seeing what it’s like as a consumer of consignment services. I urge you to go out of your way to gain more lessons by shopping in and consigning to as many shops as you can. There’s no such thing as too much knowledge, right? 🙂
As for your reaction to that unfortunate encounter and your planned rules: before you begin your business plan and operational guidelines, please read the Manual for my thinking on this. I strongly dis-recommend trying to police incoming quantity with signage, rules, and appeals for others to honor the limitations of the business.
Thanks for following us!
Kate, I have a question. At this time I have a 20 item drop off at one time policy. In the town where I am, I am the only consignment store. which is great I have the market.. but here is my problem I get lots of people cleaning out there closets for the first time in 10 years to make a penny on it here! I put the limit on them because it seemed like if I did that I got the 20 best items after that they seem to go down, on my good consiners with good clothing I allow them to bring more ..
Here is my problem, I understand why you say no “limit” but, if I don’t then how do I deal with all the clothes I cant accept. nicley? how do I go about telling people there items are not good enough with out insoulting them? This problem is driving me insane. any advice or refrence on how to tell people no, thank you. Nicely or firing the consigners that always bring you the stuff you cant sell?
I am despriate for your help! thank you
Sharon, thanks for your comments. The main problem (although there are many!) with imposing a numerical limit is that you are relying on the consignor to know which 20 items are “the best”… and how in heaven’s name would they know that?
Being able to say “no” is of course an art, as well… but it’s just as easy to say no thank you to 30 items as it is to 3 or 5 or whatever. Surely you have the same exact problem with that 20-item limit, don’t you?
Some related blog entries:
https://auntiekate.wordpress.com/2010/08/11/drowning-in-incoming-merchandise-yet-life-saving-tips-from-auntie-kate/
https://auntiekate.wordpress.com/2007/10/15/kate-learns-something-new/
This is a great question to explore on Too Good to be Threw’s Sharing discussion board, which is here: http://www.tgtbt.com/w-agora/index.php?site=tgtbt&bn= You can get lots of varying opinions, from shopkeepers of all sorts and levels of experience. Please join us there!
Hi Kate,
Just one follow up. I didn’t misunderstand your original post – I was saying that my shop is SO busy already and would be even overwhelmed if I kept an “open door” policy, no limit policy (based only on “quality, condition & style) BECAUSE I’m the only local shop that doesn’t have label or dollar limits of any kinds. I have been taken advantage of a number of times – entire 8-12 box (moving size) estates dumped in my store, a dozen garbage bags at a time, etc. I only have two staff and 1500 sq ft. There is no time to get all of this stuff sorted, inputted and tagged and still have other consignors coming through the door every day with THEIR unlimited consignments. Believe me, I know. Sometimes, limits need to apply just for our own sanity!
I have used the open door policy for the 45 we’ve been open but now my store is full to the brim and my racks are getting uncomfortable. I have run out of shelf, storage, rack and room space. I have put a hold on new consignors for 2 weeks but taking drop and runs form our regulars. I hated to do this. What would have been my solution? Cyndi Schmidt
Thanks Cyndi (and others!) but please go back and REREAD my blog more carefully.
I didn’t, nor ever WILL, suggest that any shopkeeper have an “open door policy” if by that you mean “I’ll accept anything you wanna give me and put it in my store”. One commenter misread, then everyone else misread and so on, like that game “Telephone” you used to play at parties when you were a kid.
I simply said that only accepting X items per consignor (or seller) or per visit or per appointment is a lousy Return on Investment… and for all the OTHER reasons it’s a bad idea besides, check out the Manual. (If you don’t have a manual, you can get one at http://TGtbT.com/manual.htm )
Specific answer to Cyndia and her full store: Cull the mistakes you made, the things that when you opened you took and now know you shouldn’t have. And, of course, keep up with and advertise your scheduled markdowns, trying out whatever works for you (some shops do well with MD racks on the sidewalk, some don’t, for example. Some announce a special sale on things via FB or Twitter, some don’t.) Remove store-owned items from the shop, at least temporarily, so you don’t have have to refuse to take fresh merchandise…which is without a doubt, the WORST possible solution (see the newest Lunch with Kate Product at http://TGtbT.com/luncheonette.htm, called “Why We Failed.”)
With limited space, few competing consignment opportunities and personnel costs, it is not realistic for us to allow unlimited consigning. It is not always a space issue. I don’t care if someone brings me 75 items of which I can only use 25. At least I don’t risk them leaving those 25 at home because of limits. However, I can better control the process when I am aware that someone has a ton of items for review.
Many of my clients WANT appointments. Others who do call or check the website for information know that its best not to “walk in”. Those who schedule are asked “for purposes of scheduling enough time, do you think you’ll have more than 20 items?” If they do, we block out an extra slot. We remind them that we’d like all apparel on hangers and shoes removed from boxes. That’s it.
We do require first time consignors to schedule an appointment. Of course, we still get walk-ins who have not bothered to get information about our quality standards and/or how to prepare items for consignment. We accommodate whoever we can with our current resources in the order that they arrive — those with appointments are served first.
During the season, we see 10-12 clients on any given day. About half have appointments and the others drop-off. All consignments are on the selling floor within 24 hours.
Christine, sounds like a good realistic system to me as you have laid it out. My post was all about telling consignors beforehand they could only bring in a store-mandated number of items, such as “3 pr shoes” or “one table lamp.” Since you don’t seem to restrict, sight-unseen, in this manner, this post would seem to be n/a, non-applicable, to your specific shop. Isn’t that great 😉 ?
I agree with the other comments about an “open door” policy.
We make it extremely easy for our consignors…no appt. necessary 7 days a week! We use to have no limit but now have a 25 item limit. We learned the that consignors want the convenience of no drop-off restrictions and don’t care about the 25 item limit. We have also found that everyone saves time. The consignors don’t have to wait while we go through dozens of items and they bring in only their high quality items! As a result, our profits have increased and we’re a much “happier” shop if you know what I mean. No more stuffed racks of clothes around because someone decided to clean out their closet for the first time in ten years!
There’s another shop in the area that doesn’t have a limit and it obvious that they have the “left overs” and their shop is always a mess.
We changed our policy about 3 years ago and have never had a complaint about our 25 item limit. We also asked our consignors about our policies in a recent email survey we did to our mailing list of over 6,000 consignors. Not a single complaint about our 25 limit.
It’s worked well for us and we’re a very successful shop (9 years in business and sales up 21% YTD).
Thanks Ronnie, for commenting. A 25-piece limit is certainly better than a 10 or 15-piece, right? We all HOPE and DREAM that our potential consignors keep their closets and cupboards cleaned out OFTEN enough to not possess more than 25 items that they want to get rid of on any given day!
It’s great to hear from you, Christine, and I appreciate where you are coming from… it’s very scary to extend one’s overhead before one can see the possibilities of extending one’s profits!
I never said anything about “extending” dollar or label limits. Naturally, one would accept only what one’s clientele will/ are used to/ can be expected to buy. I simply said that, having spent the effort to attract consignors, it’s ROI suicide to limit them to a specific NUMBER of items. If a consignor, for example, had 37 best-selling items to bring in and you told her she could only have 15 items on consignment, I think you’d agree that the “lost” 23 items would limit your shop’s growth. (And fuel your competitor’s.)
If your competitors are going out of business for whatever reason, I would recommend it might be wise to supercharge your staff, space and infrastructure to accommodate unfulfilled needs in your market area.
Or not. It’s each business owner’s choice, and if you are comfortable with your business, THAT’s what counts. Don’t let me, or anyone else, dictate how you run your business.
I stand by my position that to limit the NUMBER of items that a consignor is “allowed” to have in your shop is not the best way to realize a profit, but it may well be the best way for any given shopkeeper to manage her business. That’s why we are sole proprietors, right?
Respectfully,
Kate
Hi Kate. Your answer to Ellecia, while optomistic, isn’t really practical. If I kept an “open door” policy and allowed everyone who wanted to to drop off at any time, every day, I would have to hire extra staff (at least three or four), buy at least one or two new computers to run consigning software on for inputting, and start looking for bigger premises. I live in an area where ALL the other consignment stores have dollar, label and item limits. I am literally the only shop whose only restriction is that I take consignments by appointment seasonally. Even then, I am often overwhelmed by the amount of items that consignors bring in. Due to the economy and a new tax recently passed here that now taxes secondhand goods (we used to be exempt), business is way down and some stores (especially like mine – mid-price and non-designer) are going out of business. What practical advise to you have for someone like me – who doesn’t have the space, staff or infrastructure to keep an “open door” policy”
Great article! How do you keep from getting overwhelmed by consignments with an open policy like this?
Thanks, Ellecia. You keep from being overwhelmed with incoming, the same way you keep from being overwhelmed by customers throwing money at you ;)… you bless the powers that be, that so many great things have come your way. With more incoming, you can be more selective. With more incoming, you can have more selection for your customers. With more incoming you can sell more and faster and to more people! With more incoming, truly every day your shop is like a whole new shop, which makes your buyers happy and your consignors thrilled to make so much money so QUICKLY!
Well said Kate!