Have your say!
I invite you to “comment” to this post if there are ideas and concerns you wish to share with your consignment, resale, and thrift peers. I do hope, as well, that you’ll answer the concerns of others here. You can even choose to reply to a specific comment (old or new) if you want to add your viewpoint.
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Auntie Kate The Resale Expert 
Kimberly, since you’re considering investing a tidy sum in this business, I will assume that you have the Manual, and any other reference material you’ve gathered. The operating survey in the manual is old, but the percentages match up just about identical to the latest NARTS survey. There’s $/sqft, $/hrs of operation, and figures for specialties like childrenswear, and even figures for new shops vs. established. As well as the %ages of gross income shops pay in leasehold costs and so on.
I know I have so many questions! Is there any place I can find info on how much average monthly sales would be (realistically) if I had a 2000 sq ft childrens/maternity store? I am looking at rent for buildings in my area, which are at MINIMUM $2000 for 2000 sq ft a month, plus having to pay all utilities, community space, maintenance. i just dont think I could sell enough to cover these costs!
Anyone out there have a consignment store for tweens and teens? I opened one 6 months ago and would love to have some people to chat with and bounce ideas off of…
If the business is not worth anything, do not buy the business, buy the fixtures. Someone who gets out of a business within six months selling at rock bottom because they need the cash quick does not sound like a person who makes good business decisions and I would run quickly or arm myself with a good lawyer and accountant. A business comes with a balance sheet they may include some heavy liabilities. Do not buy a business “quickly”.
Again, no expert here. I’ve just heard lots of horror stories on the tgtbt board.
Well I’m not expert on this but you are seem to be saying that buying this business would be cheaper than starting your own and you will have it in the location you want. I guess the question would be why not? What exactly are you buying? Fixtures? A name? Inventory?
An owner who gives up in one year is not a dedicated business person who thought anything out (barring of course some family or medical issue). They likely haven’t made much in investment in the business. If they have gone through 2 business owners in that short a period of time there also may be some negative stuff in their history as far as the transition. It is important to check out that reputation unless again you are just buying fixtures.
I would be buying the name, LLC, website, boutique merchandise that belongs to the store (not sure how much of that there is), computer and fixtures….all turnkey. And it was NOT in the location I want…but because there is no lease with the building they are in, I would look to relocate it.
Hi Kimberly,
My husband and I started our consignment store not quite 2 years ago from scratch and we spent under $10K for everything for a 2,500 sq. ft. store of both clothes and household items. You said this existing store you want to buy is 50% less than starting a new store; so does that mean you can buy this store for under $5K hmmmm. The only reason I can think of for buying an existing business is that is has a good income so you can quit your full time job and earn enough money the first week from the store to pay your personal bills, therefore at the end of the first month you can pay your mortgage. If you’re buying it for any other reason DON’T. Ask to see the books and the owner’s current paychecks to see if you can live on what the current owner is paying herself/himself. Also ask to see the past tax returns and see how the business has grown or is it just laying flat? Find out WHY the current owner is selling. If that is livable for you; ask yourself these questions. Since I don’t know the area you’re going to have to supply the answers.
A business in a historic old town section – who will shop here? Local people that will shop weekly or often or vacationers that you will only see once a year during their beach vacation? My business is in a historic old town section and our business is great. We have regular customers that live in the area and shop often. We do get a lot of out of town people that come out to do the vineyard thing on the weekends (we have tons of vineyards within a 5 mile radius of our store and it’s a good weekend trip for the people that live in the city to come to the country) and they make our weekend business wonderful however we only see those people maybe once a year. I can’t live off of customers that only shop once a year. I need that local loyal business during the week to make the majority of our money.
However you say it’s near the beach – does this mean that the local people that live there aren’t going to be your normal shopper? Or is the normal shopper vacationers that are going to the beach? If so how many kids consignment clothing are vacationers going to buy? Is this the reason the owner is selling not enough repeat steady customers?
When you buy an existing business you also buy a good clientele if you move this business for your convenience to be closer to your home how many current loyal shoppers are going to drive that distance?
Let me know if my two cents helps.
Kim
Yes, they are selling the business for $6000…..I was actually hoping to get it for a little less. Second – she is selling because she needs the cash quick. She has only owned it for 7 months. She CLAIMS it has good potential but she doesnt have the time or money to invest. Personally I think its the location, which is why I would look to move it. Its in a wealthy area…those people around here do not shop consignment, although they drop off a lot of nice stuff. I would most likely drop all the current clients and pick up new ones in the area I want to move the business to. I have so many friends looking for a new place to both shop and consign and the area I want to put it in is middle class, newer neighborhoods, LOTS of families. Basically, I am thinking this is an inexpensive way to buy into all the start ups of the business. I do not think the current location is profitable at all.
So for $6,000 you’re buying 1,000 sq ft. of just fixtures that’s about what we spent but that also included for us the deposits and rent and 2,500 sq. ft. of fixtures. Also keep in mind where is the money to pay out all the existing consignors when that first consignment check is due to them after to you buy the business. Do they own anything to the IRS or other creditors? Sounds like you have a solid location near your home and excited customers waiting for you; I would just take that $6,000 and start your own new business and not buy someone elses business unless it has a solid balance sheet and is making enough money to pay your salary. It only took us 2 weeks to get enough incoming consignments to open our doors for sales and it’s been growing ever since.
Ok ladies! I need your opinion! Recently a childrens consignment store was put up for sale near me, which is what I want to own. Its not a location I want though. Its 1000 sq feet, in a historic downtown district near the beach; smaller than I want and farther from my house than i want. They have no lease on their building and low rent. The business is cheap, approximately 50% less than the cost to open my own store. Its been at the location for a little over a year year and is on its 2nd owner already. Yikes right?! I feel like the shop probably isnt doing well because the name is ritzy sounding and is in an area thats high end. They probably get great consignors but no buyers.
Heres where I need your thoughts. Would it be worth it for me to buy the business and then (since there is no lease) close the location and move it where I want it, maybe even change the name. Would this be better than starting from scratch?!
Oh yes, on the jewelery I believe that is not part of the exemption. We never have sold jewelry and never will. We are always careful with wooden toys as well. The reality of this law is that nobody knows any better than you what has lead or doesn’t without testing. Depending on where you are it is generally unlikely for someone to come in and test or for someone to be able to sneak in an XRF analyzer and test things without you noticing.
There really are few overzealous people out there who are against resale shops. The point of making it retroactive was so that new items that didn’t comply weren’t dumped at discount at shops like Goodwill.
As far as recalls it really shouldn’t change much. As a responsible children’s store owner there should never be recalled items on your shelves period.
This law did take 2 years to change however and still the biggest risk to my business is the governments random laws at federal, state and city level. They simply could care less about micro business and it is worrisome when you are making a big investment.
Kimberly,
The lead law (or CPSIA) has been amended this summer. It no longer applies retroactively so you are not required to test and you are not liable for selling items that exceed the new limits (unless that item has been recalled). However you can not knowingly sell items that exceed the limits. For example you can not buy closeout merchandise from a vendor that know and reveals to you (or you suspect) is dealing with merchandise that is no longer legal.
Any new merchandise should be CPSIA compliant although there is still a stay in testing. For example, we buy local hair clips. We require our vendors to prove that they buy only lead-free materials. At this point they are not required to provide 3rd party certification as they will later.
A recalled product is illegal to sell and just generally a bad idea:) You can keep up to date on those if you sign up at cpsc.gov. You need to keep up-to-date on what is recalled. We always check gear and we don’t do a lot of the cheaper style toys that more typically get recalled.
Being in the kids market requires constant vigilance (and patience) to keep an eye on the changes in the market. There seems to be ever growing list of things we don’t buy; walkers; crib bumpers; slings and on and on. I believe most all strollers have been recalled because apparently we were creating a generation of fingerless children. I’ve yet to see one, but the government has apparently.
Okay… don’t get me started:) The good news, we are finally in the clear on the lead issue, but the regulations in this market are changing daily.
Good luck on your new shop!
Wendy – so do you sell strollers in your store? Also, what about cribs. I know how high demand they are but at the same time, so many have been recalled. How do you even keep up? Do you literally have to look up every single product as it comes in your door or do you just know after having been in the business awhile whats a recalled item.
Yes, we sell strollers. We do not sell cribs, we never have. You may be surprised at the difficulties in gaining insurance for your business if you sell cribs, car seats and even toys.
No, we don’t check everything in the store. It isn’t hard to check. Go to cpsc.gov and type in the brand and it will quickly shoe you. It takes seconds. The things that are tough are clothing or shoe recalls since we never check those things when they come in. We just have to be familiar with what has been recalled and this is challenging for my staff. We are not perfect.
We don’t take things that are very old so that helps reduce the number of recalls we find we deal with.
Most of the time a recall is for a fix and we take the item and get the fix for the customer. While it is a pain it certainly goes a way towards positioning ourselves positively in the customer’s mind.
Kimberly,
It’s now illegal to sell (or resell) cribs manufactured before Jun 28, 2011. So we do not accept any cribs in our shop, at least for the time being. We also do not accept used car seats because we can’t verify the histories (i.e., whether they have been in an accident).
As for other large items – strollers, pack n plays, swings, etc. – we do double-check recalls.gov to be sure they haven’t ben recalled. But at the same time, our consignor contracts specifically state that it is the consignor’s responsibility to be sure the items they bring to us have not been recalled.
Hope that helps!
I want to open a store but can not find anywhere what the laws are when it comes to my responsibilities with lead and recalled products. Do I have to lead test and look up everything that would come into my store to make sure its something I can sell?
Hi Kimberly, Well, the good news is, you’re not alone. Here’s the posts from my blog about CPSIA, and I think the basic upshot, by now is… no one knows what to do. That’s why you cannot find any definitive answers. Of course you must exercise caution re recalled products, but I know you’d do that anyway. I’ll let others add their experiences with this, if they will.
I oversee a not for profit thrift store. We sell clothing, household items, small appliances, home decor and occasionally small pieces of furniture all on a donation basis.
When the original CPSC lead guidelines came out we made the decision to only sell children’s clothing and toys that were 100% natural fibers with no embelishments and a very limited toy selection. It greatly hurt our business because children’s items were our best sellers. We expanded our women’s clothing and households sections to compensate for the loss.
With the changes that were enacted this past summer we have expanded our children’s inventory, but are still choosy. We measure drawstrings and cut them to 3″ or remove them, we don’t sell children’s clothing with sparkly embellishments unless they are made in the USA, we sell no children’s jewelry. We have a limited toy selection as we try to interpret the clear as mud regulations. It seems that common sense is our best guide, but what is commom sense to one person is notbto another.
So, to sum up my long answer to your question- the regulations about lead content are unclear, with common sense being a store owner’s guide. The laws about re-calls are very clear. The CPSC website has information about re-calls. We put a link on our store website to the re-call listing.
Welcome to the wonderful world of re-sale Kimberly!
Merrill – *sigh* I dont think that really helps because I want to open a childrens consignment. It would eliminate a LOT of the business I would hope to do if I was extremely picky.
Hi Everyone,
I purchased my resale shop almost exactly 2 years ago and we have officially outgrown our shop. We’ll be moving in March to a larger location, conveniently just across the street from our current store. Everything is going wonderfully and we are SO excited! So much of this is because of Kate, her website and all of the wonderful advice, help and support the resale community has shared. Thank you!
Now my here’s my question:
We are currently baby/maternity but at the new location we will be expanding into juniors, women’s, men’s and video games. Our goal is to make it more of a one stop shop for the whole family. We’ve already started carrying that inventory and it has done very well. The only issue is the name of our store, “Baby Go Round.” While our current clientele is well aware of the expansion, my concern is attracting new customers for the juniors, women’s, men’s and video games. The name “Baby Go Round” just doesn’t really encompass all of that. I am quite hesitant to go for a full blown name change as the business has been around for 20 years and I love the recognition that goes with that. I have considered “Baby Go Round and More” but that still doesn’t quite capture the whole of what we will provide.
Any suggestions? It would be much appreciated!
Thanks in advance!
Tawny P.
Why not call it Family go round It includes everyone and still has the go round that your customers are familiar with. I too have a family consignment shop carrying exactly the same items.
Good luck,
Karen, “Brand New To You” Virginia Beach, Va.
Thanks Wendy
I want to do consignment because I want to list high end items(Chanel, LV, Gucci etc) I don’t have enough resources to list these type items exclusively on my own. I’ll need the help of consignors. I’ve considered BOR when Items are presented and it might be an option, but I’m leaning towards consignment. I don’t intend to list anything that I can’t start at auction for $75+++.
I do like the idea of starting out with paper. There will be a contract of course. Separate account for consignor payments as well.
Will a quik email list of the item#(s) be sufficient to consignors-this way they can check up on the items after listed?
I’e been crazy lately and not had a chance to keep up with these discussions. I can add a few of my own related experiences (after 18 years)…
1. We size XS, S, M, L & XL. Within each size, we colorize light to black. All petite items have a 1″ x 3″ vertical bright color laminated tag to make them easy to find. So all Petite Smalls are in Small with a hangtag. We also size Junior items (Bebe, A & F, etc) prefaced by JR…ie: JR S, JR XL …and hang it where it “fits”, not what the size label says
2. We do pull unsold items for customers. I prefer not to have my daily business disrupted by someone screaming across the room “my pink sweater isn’t here – did someone steal it?” 🙂 I also like to know that all is in order before I pay out . We ask for 48 hours notice — usually only have 5 or 6 pulls a week. No big deal if the store is organized.
3. We currently offer 20% discount to employees – regular-priced merchandise only. Beginning in January, I’m changing that to a credit based system where each employee will receive $$ per hour worked in a spending account (can’t be cashed out – only for purchases) I don’t care how they spend the money or when. They work pretty hard and I’m grateful. But we are a relatively small group – only 6-9 part timers.
4. Lastly…suits. We do still take some but we are in a corporate area. We have cracked down to only take suits that have some “flair” and are contemporary styles (last season). We only allocate 6 feet for them. One helpful selling tip…we posted a sign by the suits proclaiming that a suit can be used as separates and showed a picture with a jacket with other pants, with jeans and the pants/skirt with sweaters, etc. We’ve had a lot of success with marking each piece separately…may do this on a permanent basis.
@Christine: I couldn’t agree more with ALL of your message! I especially like your set-up in #3: after all, the “employee discount” of a straight percentage, rather than based on hours worked, means it can be abused by a casual worker who feels it’s okay to “give” her discount to relatives, friends… or even (if she’s completely amoral) to strangers so she can pocket the difference.
Hi Everyone,
I currently sell womens clothing thru ebay. For the most part I only sell for myself but I want to take things to the next level and start selling for others. I want to set everything up just like a consignment store, I’m even thinking of having a location where I will accept items in. There are several options for software that can work seamlessly with ebay(each of them comes with a ongoing monthly fee from $25-$500), but I am considering buying a stand alone consignment software:
This would allow me the option to separate from ebay if I choose and accept items on regular consignment to sell.
The stand alone consignment software would be a one time cost and it can provide all the functionality I need for consignments
But it would mean a two step process for getting consigned items listed on ebay. I will have to put all the info into the consignment software and then go into ebay’s system and enter the item info there as well.
Once the item sales on ebay I will have to go back into the consignment software and create a sale to complete process and create a check for the consignor
If I were to go with the seamless ebay software, I wouldn’t have the extra steps its all done automatically.
Which would you do and why? Do any of the shopkeepers here sell on ebay as well as have a storefront? If so how do you do it???
I am also looking for a graphic designer who can help with creating media-magazine ads for us…Does anyone have a referral they’d like to share??
Thanks
I would skip the investment and just try to do it on paper until you know what you need and/or have some experience under your belt.
I have sold on Ebay since 1999. I always have had great resources for inventory so I’ve never felt the need to consign items to sell. I sell only those things that I own. I’ve always felt it was just too much investment to photograph and list an item that I don’t own.
Thanks Kate for your thoughts. In the future I am not going to carry suits at all because they just take up space. None of my customers wear them and the ones that do, can’t get both pieces to fit. I also have decided to tweak my rules a bit on what I take and won’t take. It still ceases to amaze me how some of my consignors NEVER bother to read the consignment agreement on what I take and don’t take. I have had people bring me stuff that is over 10 years old and expect me to take it! If they haven’t worn it in 10 years, how can they expect me to sell it for them? I have also had problems with customers wanting me to mark more off than what the ticket says. I have signs posted that prices are firm, but I think if I had them printed 10 feet high and placed around the store, they would still ask me to take less. I just bite my tongue and kindly explain that my prices are fair. I just shake my head when they leave. Do these people go to the grocery store and ask to have their things marked down? I am also sticking to my original idea of donating all items that are unsold because most don’t want them back anyway or say they want them back and then never pick them up. No one works the store but me and it is too much trouble to be constantly pulling items for them to not pick up. I have found in the 8 months that I have been open that it is definitely a lot to learn.
My contract requires the consignor to make an appt 3 days in advance to pick up items they want back. The appt must be 15 min prior to opening or closing and most of all, they must pull their own inventory. My consignment is done by season not by the date they brought it in. Therefore as of January 15th any item not picked up for winter will be clearanced and then donated. Hope this helps.
Hi my name is Nikki and I am opening a teen girls – womens resale shop called The Snob Shop Exchange, I will open this Saturday the 19th with a sneak peek for Facebook customers only on friday from 7-9. Hope you check out my facebook page and let me know what everyone thinks. I’m not even open and I already have 1048 fans since I published the page on Sept 30. Getting nervous about not knowing the system in time and will everybody like it so many mixed emotions!! Need some pet talks from all the veterans if you have any suggestions that may help me!
Congrats Nikki sounds like you’re off to a good start. How in the heck did you get 1048 fans in such a short time. I work my Facebook page every day and I only have 104 fans. How did you do it? I’m sooooo Facebook challenged
Hi Kim, my own personal FB page have over 1000 friends so I would share my business page on my page and then ask them to share that page on their wall and it started building from there so I started taking pictures of the place with no other advertising at all can’t believe it. It is like it is out of controll and I’m loving it 😉
Thanks everyone for your input and think I will stick to keeping it sized and then colour co-ordinated! I too put “fits like” on the tag and put it in the appropriate area and find this works well.
Kate i just wanted to let you know that I am really enjoying all of the reading material that I ordered and it is nice to get some fresh ideas…..i guess an old dog(18years in business) can learn some new tricks!
Thanks again.
If a item is labeled a Large, but clearly is not, I will add to the tag “fits like a ____” and put it with the appropriate size. I also make sure that the brand is not a Junior brand. Clearly a Junior large is not the same as a Ladies large. This helps me when I am searching for an item and using the existing label to verify, especially if the tag fell off.
Would love some input from others on this…Do you think it is better to size your ladies tops or forget about size and colour co-ordinate them in your store?
Just wondering if customers will take the time to go through all the tops if they are colour organized. I do find that many tops that are say a large are in fact small because of brand. Help …want to sell more!!
Cindy, I have mine by size and then within that size, I have them colorized. It works for me and the customers appreciate that they are done that way. If they need a white blouse they can go right to it.
@ Cindy, I agree with Sweet… and would like to add to the conversation: How do shopkeepers handle assigning a size to something, when it’s clearly NOT a “large” for your clientele? Would you keep it a large even if it looks more like a medium or small to you? Or put a more appropriate size on your price tag and include it in a section where it will actually fit the browser?
We write on the tag (runs big or runs small) and put it in the size we think it will fit. Our customers can figure that out but our if we don’t write on the tag our staff will constantly refile!
As a shopper I don’t want to look through things that are not my size. I want to see what my options are and be done. It does nothing for me to look at what you have in small size tops except make me feel bad I can’t wear one:)
Hi All….it’s a difficult situation to deal with, but I guess we all have it. Right now what I am doing is as follows:
1. employees can only hold an item for 1 day. (this allows them to come in if needed on there time off and try on etc)
2. we offer layaway for 2 weeks, with a deposit. So if they don’t have the cash today they can do layaway.
3. we also don’t let employees use there discount untill the items has been on the sales floor for 5 days.
4. Just put this one in place….only the owner or the manager can ring up employee sales. (usually either or both of us are in the store everyday)
As far as items that are spotted before we go through them……if they want to purchase it, and it’s something I might not have accepted…..I would take it in on consignment and they can purchase it at full price.
We just had to do a total review of our donation policy at the stores……winds up some items were being taken for themselves when up for donation. It amazes me that even though I’m a full time owner in the stores…that I miss things that are going on?
Thanks for the feedback. This is an interesting business in so many ways. So many little things like donations being taken come up.
I had tried the buying on store credit thing but it was so much bookkeeping work. It definitely helped though. Maybe I just need to revisit another method to this.
We don’t do a 5 day wait mostly because we don’t have a huge issue with the best merchandise being purchased by the staff.
I do mark up the items when I buy them but boy that feels badly to me. But I know if I don’t it will cause more problems and after all I need some income to pay their salaries:)
One other question… do you allow employees to use promotional coupons vs. their employee discount?
If it helps you realize how hard this issue is, let me share that we are a 29 year old establishment still wrestling with this issue.
We have had a 5 day wait before employees could use their discount.
Within the last year we have instituted a beginning of the season prohibition on purchasing even at full price for 5 days while we fill the store with the new merchandise.
And of late we have an effective part time employee of considerable means who is purchasing for her daughters, her son’s girls friends and now her manicurist with our discount. Our policies are under review. Stay tuned.
A question for BOR shops. Do you have a policy you might share in regards to employee purchases. For example when a buyer is going through items and decides they want an item that you would otherwise not buy for the shop.
I’ve been remiss at setting a clear policy as its not been a huge deal. I also have a problem with piling of items that are going to purchased on payday but then never get purchased. Already made a policy on that which is being ignored. Before I “remind” I wanted to add in this other component.
Wendy,
I’m not a BOR shop we’re all consignment however my policies still apply in your case. Employees have shown me an item that we won’t accept however they really want it. So I check it in for a small amount and charge them that…hey making money is making money even if it is small. But that small amount made the employee so happy that’s well worth it.
As for the issue of employees putting thier purchases in the back room until payday I don’t allow that at all. I tell them if they want to purchase it we’ll ring it up today, staple the recipt to your time card and I’ll take it out of the employees check on payday. I also put a copy of the recipt in the drawer so I have a copy too. That policy as been working for me for over 20 years. I just know if I let them put it in the back room the consignor is going to walk in looking for thier items on the sales floor and complain to me when they can’t find them. It win win for everyone this way.
@Kim, your process of refusing to allow ANY employee “holds” is a great way to keep not only your back room uncluttered, but also to keep close control over the merchandise consignors have entrusted to you. After all, employee theft is a fact of life; even the most loyal of staffers can justify “just this once” or “but it’s overpriced so I’ll just take it” or “I’ll slip the money for this into the register when things aren’t so tight at home,” and if holds are in the back room, it’s all to easy to tempt them into such thinking.
And your extending of credit until payday is a perk that employees of larger retailers don’t get.
Your system also does away with the situation of a consigned item being unavailable for purchase for whatever time an employee thinks she wants it, then changes her mind and puts it back on the sales floor… a procedure patently unfair to the consignor, who may have lost an opportunity to sell it in the meantime.
Sweet – It depends on your area but here no women’s shops take suits. Few people wear them. We are kids but I try very had to teach my buyers not to buy things that won’t appeal to a broad market. For example one of them bought a shirt that says “I’m allergic to peanuts”, or out of town team clothing. Something that only 5% of my customers are interested in isn’t worth taking up rack space.