Amazing. The four reasons Phil Libin, founder and CEO of Evernote, Inc.’s 2011 Company of the Year, gives as 4 Reasons You’ll Fail at Entrepreneurship are exactly the four that make ME wince, when I hear a would-be resale shop owner declare them as why s/he thinks a consignment or resale shop is just the right thing to start!
I’ve borrowed his reasons and translated them to our industry. So here are my
4 Reasons NOT to open a consignment or resale shop, because if these are your reasons, your business will fail.
1. You Want to Be Your Own Boss
In retail, the public is your boss. Yes, every single person who walks into your shop. And add to that, those who don’t. When you have a boss, you can refer/ defer/ blame/ hide behind her/him. When you’re our there on your own, you’re on your own. Believe me, there will be days when you’ll long to have a boss. If only so you can call in sick.
2. You Want More Flexible Time
Oh yeh. This is the biggie. Unless you have worked in the upper echelons of retail, you won’t understand that retail is the absolute worst career to have if you want to “come and go as you please.” Until you have in place, have trained, can afford and can trust a crew… you will be in your shop for every hour you’ve publicized as open, plus one or two on either end of the day. Without fail.
3. You Want to Make Money Overnight
I’ve said it before, I’ll say it again: The world got along without your business just fine yesterday. It’s not going to start slinging money at your feet from Day One.
A good shop will start paying its overhead after a few months or a few years; a great shop will enable you to take some profit out of it. A magnificent shop will, after a period of time, provide a very comfortable living for you. But it doesn’t happen overnight, and it doesn’t happen without long hours, hard work, and lots and lots of self-education.
4. You Can’t Afford to Fail
The riskiest retail thing in the world you can do is sign a lease, if you do not have every single cent in the bank ready to be given to the landlord is necessary. Oh, no, wait: the riskiest thing to do is to open a shop without knowing everything you can about the business.
At least once a month, I hear a new shopkeeper say “I can’t afford the Manual.” I’ve learned not to reply to them that every week, probably every day, that they operate in the blind, they are losing the cost of the manual and more.Over and over.
Auntie Kate The Resale Expert 
Awsome advice I hate to fail and work my ass off my first time in retail and it’s taught me a lot about myself I’ve had to slug it out learn to talk to people learn how to dress learn how to get along with my fellow neighbors and have hit many a brick wall everything you have said is so true we all have fallen into that trap one way or another , I’ve learnt the hard way but never give up on myself , retail and food is the hardest line of business I have both everyday I work so hard to b the best I can b do all I can and more and try to c away forward and make changes and most of all learn from my mistakes along the way . I am rewarded when a customer comes to my shop and thanks me for having prices they can afford makes me want to keep going and feel like I have given back when in my hart and head I’m worried about making the rent on time and failing these people give me drive and hope
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I work at a resale shop in a small town. It is a pretty big building, and there is plenty of room to make it a great place. However, we get donations whenever someone decides to drop them off at the door. We are running out of room because every time someone has a yard sale, they bring the rest to us. I have told my boss that we have to get the inside organized first before we can even bring anything else in. I could use some advice on the whole topic. I am literally here every day and as soon as I get things in order, here come a truck load of leftover garage sale items that mostly get ruined outside due to weather conditions. What do I do?
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Hi Karesa, Is it possible to designate a special area to incoming donations? You could even “fence” it off either with actual cute picket fencing or simply with a short “wall” of for-sale goods like dressers, armoires, etc. Hang a sign, calling the area something exciting like “Coming Soon!” or “We’re working on It!”. (You don’t want to wall it completely off for 2 reasons: to generate excitement in browsers and to be able to work on the goods while remaining available on the sales floor.) That way, the mess is not infringing upon the already-merchandised sales floor, you gain a work place, and customers get excited to come back tomorrow and see the new goodies.
As the merchant, you get the opportunity, between customers, to work on arranging and prettifying the for-sale items, or digging into those bags and boxes of incoming to select what’s saleable and ditch the remainder. Popping back and forth between the 2 tasks will make your day more interesting and probably more productive, too!
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This reminded me to dust of my manual as I’m coming up on our 10th anniversary. One thing I have gleaned from all of the reading and lurking I’ve done around Kate over the years has been to have a high standard that reflects how I feel about my customers and myself/employees. We really work hard to keep the shop super clean, organized, smelling good (clean), clothes in the best condition. I want the shop to be inclusive of everyone in the community, not exclusive. I want my shop to let the customer know we respect her–regardless of age or finances, and I want my employees to know that I care about them personally and deeply. This is reflected back in the appearance of the shop and customer service. We know we are in business to make money–but not at the cost of the people we do business with–if that makes sense.
Now, we are off to tackle facebook!
Thanks Kate.
Judy
Designer Threads Consignment Shop & Bead Boutique
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Thanks Judy! The only way to thrive in any business is to make sure that all parties to a transaction: buyer, seller, consignor, donor, staff members, that lady in the corner petting her Peke… get what they want at the price they want to pay. That’s called capitalism!
On another note, I see your Etsy shop is vintage: be sure to read the NY Times article I shared on FB today! You’ll love it!
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I find it amusing that people say they can’t afford to buy your manual or invest in their education of our industry. I like Albert Einstein’s saying,”A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns how to avoid the mistake altogether.”
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Thanks Kitty. The one Einstein quote I know by heart is :Insanity: doing the same thing over and over again and expecting different results.”… it comes to mind whenever a shopkeeper asks for advice then keeps on doing the same thing over and over again…. 😉
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The best decision I made was to purchase your manual. You reduced the learning curve and prepared me for things that might happen. Being part of this community is inspirational. Thank you
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Thanks, Pat! I just hate to see prospective or new shopkeepers stumble around when they could be making headway… and money. I’m so glad I was able to accelerate your success! There’s a few folks I have in mind right now… the ones who “can’t afford the Manual”… and it’s hopeless for me to try to tell them that they are losing the dollars the Manual would cost them every week, or even every day, by trying to re-invent the resale wheel!
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How true about thinking you will have more freedom! 7 years into my store I suddenly had a change over of staff due to a pregnancy and a move! Back to square one. It’s so hard to find staff who get the resale industry, they get a shock when they realise how labour intensive it is. However we are getting there and a day off looks iminent. Glad to have winter almost behind us it’s been a snowy one in Guelph Ontario.
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Yes, Val, finding and training a staff that not only maintains the store and sells, as they would do in any retail situation, but also can be trained to accept and price, is indeed a challenge! That’s a very special sort of person, isn’t it?
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So true Kate. I think the same things apply for those who are buying an existing store–except maybe they can make some money from day one! When I bought my store 19 years ago, I was advised not to buy it by a business broker. But I saw potential and bought it anyway. TONS of hard work, working long hours by myself, and changing things around turned around the “life” of the store. Now, it’s a wonderful place to shop, brings in a nice profit, and has been open for almost 32 years! Hopefully I can sell it someday and the next owner will continue to reap the benefits of all the work I’ve put over these years.
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AMEN! it’s a ton of work…a ton of hours…and a ton of heartbreak (depending on the day…) and look, i was that girl hanging from the upper rafters of retail…i GET IT…but really, this is no walk in the park…a “labor of love” i call it…thank you for being so REAL…i opened in July, and am just now seeing a little profit…trudge on!!
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Oh, wise Kate…once again you are right on the money!
I hope everyone who is looking to opening a resale store heeds your sage advise…18 hours a day for 2 years before I felt comfortable enough to relinquish the reins to staff.
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Someone once told me, Carousel K, that they were SO involved in a business, they felt RESPONSIBLE for it. I guess that’s how I feel… I want every single person who dreams of a consignment, resale or thrift business to succeed at it! If only because a GOOD competitor is a bonus, and a BAD competitor is a negative. And NOwhere is this truer than in our industry, where we each have, basically. “one of each”…. (BTW folks, she mistyped her URL. If you would like to visit Carousel Kids, you can get there from our Resale Directory & Zoomable Map at http://HowToConsign.com/find.htm#Missouri )
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Oh Kate. I always chuckle at things when they ring true. The first 2 points are exactly what I thought I was doing when I opened my shop. I really thought self-employment was some kind of freedom. IT’S SO FUNNY, just six months in, to realize how wrong I was. The other day we had a family emergency and opened the shop late and wouldn’t you know it I got a rather terse email from a customer who had been there waiting outside…I would have loved to have someone else answer her. Heck, I would have loved to just not open my shop that day AT ALL!!
BUT!! For me, even though some of my consignors can be a pain, and now again a cranky customer makes me grit my teeth as I smile, it still beats my 14 years inside a tight, restrictive bureaucracy where my imagination was stifled and my true personality (mostly) kept in check.
I’m still deliriously happy most days and I believe in my heart that will create the word of mouth I need.
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Thanks, Plush, and isn’t it an indescribable HIGH to realize “Me, I created all this! ME!”? But creating word of mouth isn’t as easy as all that. Hope you’ve lots of “tricks” up your sleeves to get people talking about your business… from window displays to events to social media!
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You are soooo right. I have heard folks say all four of those thing, and I always say, get the manual from Kate. It has saved me more than once.
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Thanks, Ruth. It’s always pure gold, to me, to hear that those who have benefited from the Manual are recommending it to others!
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