Advice for your consignment, resale or thrift shop is as close as your computer: Just Ask Auntie Kate!
Update June 2016: There are now about 700 comments on this page, and while they are completely fascinating, it can be difficult to find your specific issue. For more guidance see our Products for the Professional Resaler, covering over 30 areas of resale shopkeeping.
Also, check out the articles at Too Good to be Threw in our Back Room. They might have the info you’re looking for.
In the tradition of Dear Abby and Ask Ann Landers, we present Ask Auntie Kate. Well, actually, it’s Ask Auntie Kate and her resale industry buddies, because I expect you… yes you, Dear Reader… to chime in with your thoughts, experiences and perspectives. Don’t be shy. People ask questions because they want answers.
To keep questions and responses together, you need to be sure to hit “reply” when you’re reading the post that you want to, well, reply to. Otherwise everything gets all mish mashy and tops hang off their hangers and placemats are stuck in with the pillow cases and tags get lost and it looks like a mess.
Yes, Auntie Kate will reply to your most vexing problems, most heart-felt concerns, your secret shames and undiscovered desires. After she gives her friends a chance to put in their 1o-cents’-worth. So ask, answer, or opinionate away.
Auntie Kate The Resale Expert 
Hi Kate, I was wondering if you have ever heard of a consignment franchise/ partnership and what structure it took. I am thinking about opening a bridal consignment shop in my town and found a similar shop in the next major city to the north who is doing the same thing really well and thought about offering them a cash-sharing option for the use of their name, know-how and website. Thoughts?
Amanda, I am sure that this would be worth discussing with that shop. Be sure to bone up on licensing, franchising, partnering in various ways so you can explore the ideas you come up with together. And don’t forget: lawyers! Let us know how it goes, sounds interesting!
Ms. Kate,
My bbf and I are thinking about opening a wedding resale or consignment shop. I have noticed there are a lot of dress consignments online but not a lot of shops. Is there a reason? We would also have flower girl dresses and some bridemaids dresses. We wanted to do some used wedding items also would that be a good option. We want a place to buy lightly used wedding tems for budgeting brides. Please let us know what you think.
Kim
Hi Kim, Do you mean that you’ve noticed a lot of online consignment sites accepting bridal and bridal party attire but not so many bricks & mortar stores doing the same mix of merchandise?
If so, yes, alas there is a reason. Having the right wedding dress is difficult for a shop paying retail expenses. Having the right mix of style, color, sizes of attendants’ wear is challenging. Being in an area area populous enough to supply a profitable number of brides-to-be who are willing to shop secondhand could be financially difficult.
So there is the problem: to have a shop large enough to stock the vast selection every bridal party needs, to locate in an area with multiple potential shoppers in this category, and to sell enough to make a profit.
Certainly adding the various hard goods, decorations, and so on involved in putting on a wedding would help. You might also consider marketing your business as “special occasion” rather than just bridal, thereby appealing to a wider range of potential customers, from the mother of the bride to the prom-goer to the woman who simply needs a special dress for her special event.
Looking forward to hearing about your progress! Be sure to let us know.
Thank you. And we like the idea of the “special occassions” shop. We will definitly think of that as an option.
Hello Auntie Kate,
I want to open a kids clothing resale store. Right now, I’m looking for a place to rent. Where am I supposed to purchase the items and how much for 450-500 sq.ft. store?
Can you please recommend a book that will guide me in starting this business?
Thank you!
Thanks for asking Goldie! Click here for information on Too Good to be Threw Complete Operations Manual for Resale & Consignment Shops. You would probably also want the special-focus KidBiz: It’s Not Child’s Play. Best wishes!
Hi Auntie Kate,
I was wondering if you or any of your readers can recommend a resale pos system. i am using one now that does not keep up with what i want to do. Looking for something that is inventory controlled and keep up with my growth
Thanks
Shirley
Itty Bitty’s Closet
Thanks for asking, Shirley! The software programs listed on my Links Page are companies which are known to me and which have a proven track record as reported by shopkeepers. If a company you are considering is not here, it could be because they have not made a showing in our industry, they have not told me about their product(s), or they have received glaringly-negative reviews from shopkeepers. The companies above are not guaranteed or warrantied by TGtbT.com of course; this listing is simply here as a courtesy. Make your own choice by trying their demos and following my guidelines in the Manual; I cannot and will not “recommend” one over the other.
If you would like opinions from current users you might want to ask this on the NARTS-member Facebook discussion group at https://www.facebook.com/groups/481211621964821/
I loved the display idea using the long s hooks that connect to a chrome pipe. Where did you find the long s hooks?
Hi Pa,ela, how you poked around the various store-supply sites? There’s some links on our Links Page at TGtbT.com
Hi Kate!
I am wondering what your take is on giving consigners a higher percentage if they shop in store.
Thanks!
Jasmine
Well, to be perfectly honest, Jasmine, I have never quite understood the reasoning (not to mention the paperwork!) behind this. I know lots of shops do this, but seriously, why? I guess it’s so “the money doesn’t leave the shop”… but one has to figure the cost of any sort of discount. If you owe Consignor A $30 cash, but you sell her Consignor B’s $40 item for a store credit of say $33 or $36 (meaning, you’re giving Consignor A 10 or 20% more in store credit), you’re still owing Consignor B $20… lowering your gross profit by the $3 or $6.
I guess it boils down to: can you afford to do so? is your profit margin such that you can afford this discount? And what is your REASON for doing so?
My take? Consignors who come in and receive cash in hand (note: NOT a check) are easy folks to sell to. They feel like they have the upper hand (that hand with the $30 in it) and that makes them feel powerful. The unexpected $30 feels like “free money” to them, so they are the most likely of people in the shop at that moment to buy. Giving them a discount on top of that, is to me, unnecessary and damages the shop’s ability to sustain itself for the future.
Hi Auntie Kate!
First, thank you so much for all that you have done and continue to do for our industry. Your help over the years has been so gratefully received!
I was wondering if you would be able to direct me to a post or article/manual that you have written that will help me gauge the success of my shop. We’ve been open 4 years now and I have pretty big goals- sometimes it makes it difficult to really know if I’m on the right track as far as profit and growth is concerned.
Any help is greatly appreciated!
Thank you bunches in advance.
Thanks Tawny, for following our blog.
As far as gauging the success of your shop, that’s really personal, so I can’t help you there. For example, MY goal in my business was to retire early so I could travel. Yours might be to pass your business on to a relative, or to franchise, or whatever…
But as far as financial success, we have this: the Business Valuation kit, available at http://tgtbt.com/shopthrive.htm#15, which is perfect for tracking your growth and preparing your business to be bought… or for evaluating buying a consignment or resale shop. I loved being able to evaluate my shop regularly not only from a consignors-served, items-sold standpoint, but also from a “how much is this business worth” standpoint.
Thanks, Kate! Just ordered the PDQ. I can’t wait to read it 🙂
Hi, I just got married and decided I want to open a resale shop. Most of my merchandise is from another resale shop from my home town. I want to keep buying from there, my dilemma is should I tell the owner? we won’t be competing as my shop will be 2 hrs away. I’m also considering asking her for their inside knowledge they have been in business for 7 yrs. I’m going to start reading your book as well.
Thanks
Chances are, that owner will realize that when you buy more than one size, style, or in quantity! I doubt, however, that she would be willing to share… at least for free… much of her knowledge, and it’s also doubtful that what she will share would be universally applicable. That’s what our Products for the Professional Resaler are for!
I don’t think she would care at all if you are buying her merchandise… but I’m just wondering how you could afford to buy at one shop’s price and still have a margin to make a profit? I have a buy outright store with clothes, household, furniture, etc, and we are swimming in clothes that we got for very low prices because people love to have cash up front for clothes. I would suggest putting out an ad on Facebook in your new town of what you’re looking for… getting it at lower prices, not having to lug it two hours away, and starting to get the word out about your place locally.
Good luck with your new venture!
[…] Ask Auntie Kate […]
Hi everyone, hi Kate!
After buying and reading the Manual and the KidzBiz part, I am now opening a kids consignment store. Would like to ask all of you for ideas and inspirations to make the texts of the flyers. I like the example in the manual, Kate, but is only for clothes and I want to sell everything for kids.
Also, do the most stores have and if yes how long normally is or should be the returning period – a week perhaps?
Thanks in advance for your suggestions!
Desi, you’re looking to create a flyer for what? Consignors? Shoppers? Just focus on the WIIFM and write in a way that sounds like you and your shop, and you’ll be fine!
As for (I’m guessing here) a grace period for the end of a consignment period, choose what makes you comfortable but DO NOT SPECIFY THIS TO YOUR CONSIGNORS. Example: I kept expired goods for a week past the “reclaim” period of 60 days so that I felt comfortable donating unsolds to charity. But if I had stated that, the consignors would say “well, it’s only been 10 days or 14 days” past the week grace period, which would have hampered my ability to present new, fresh goods in my shop.
Thank you Kate!
I know its hard for you to understand my English:)) I did not mean a grace period, but a devolution/returns period-is it a good or a bad idea to have it you think? And the flyers would be for both consignors and shoppers as I am now opening. But firstly and more important for consignors, because, yes, I am opening, but without any stock at all. I am going to only accept items for the first month or so. I hope its understandable.
Best regards & many thanks,
Desi.
Desi, sorry… are you asking if unsold consigned items should be, at some point, removed from the selling floor? Yes. Are you asking if there should be a time span during which consignors can reclaim unsold items? See my prior answer. Or are you asking if, when an item is sold, the buyer can return it to the store? If so, check your Manual re the “approval system”, which is really important for kidswear stores, or just create a return period of your own as you see fit. Many shops use 3-5 days.
The third one, thank you Kate!
Good Day, Kate and I hope your Labour Day Weekend is going well.
I own a small household and furniture consignment shop in an equally small town (2500 people). Our business model is to give the consignor 50% of the price their item sells for, to operate on 30% and to donate 20% to the charities which our volunteers represent. The community has really gotten behind this idea. The building owner has allowed us to pay rent as a percentage of sales (17.25% – leaving only 12.75% for everything else operational), shoppers have been interested, consignors have brought in great items, and volunteers are helpful in running the sales part of the operation. I do all the organizing (ownership = bit of a control freak). I encourage new volunteers, set up the volunteer schedules, remind them, encourage new consignors, meet them, approve the intake, record and price intake, produce the sales tags, review the daily sales, add up the monthly sales, determine what each consignor has sold and how much they should receive, and produce their payout. We’ve had a very successful first year, but August was SOOO successful that I just about wore myself into the ground. I know I cannot keep doing all of this by paper records and by hand. Now that I have shown myself and others that the store can work, I want to move to more electronic support. I know I would lose some volunteers (some of these dear people are in their late 80s and I have one in her 90s!) if I went to an electronic POS system, so for now I want to stay with our little carbon copy sales receipts. I would like to have inventory management and perhaps even label making as electronic support. Hopefully, I can find the right system to be able to expand later, as we grow, to other add-ons (like pos). For now I need to continue to carefully manage both the costs and the impact on volunteers, but I personally need to also get some relief.
I need your sage advice, Kate, as well as other shop owners out there. What do you recommend for simple and cheap inventory management and label making?
Hi Cheryl,
Any of the consignment software programs can be used as you described, and the (collected) bar-coded price tags/labels used by you during the day or before opening the next day, or once a week, or whatever! to enter items sold onto each consignor’s account, thus avoiding the issue of using a computer as a “cash register”. I would recommend that you definitely use the bar-code option, so entering sold tickets goes quickly and accurately. I know you know that the big players in the resale software field are all listed on my Links Page at TGtbT.com.
Kate,
My sister and I are in a dilemma. We own 2 upscale clothing consignment shops (childrens & junior/college age) that we are looking to converge. We are not in a very accessible location but have a wonderful consignor base that is growing weekly. Our shops average 10- 20 new consignors per week and we are just busting at the seams in our current location. We have the opportunity to move to a busier and bigger location that already has a couple consignments shops in it already. We will not be in competition with each other as we all sell different things. In fact, the other consignment shops welcome us to join them as they sell furniture and women’s business clothes. Our dilemma is the rent is doubled what we’re paying now. We are off the beaten path currently but this new location is on a very busy street with easy access in and out and plenty of parking. We make enough in our current location to cover our costs but are not really making a lot of of profit. We’ve followed your page and advice from day one and know that getting into the right spot can really catapult your business. How do you know when it’s time to bite the bullet and make that move? We have been looking for a bigger place for a few months and this one just fits all our needs….we’re just worried that we won’t be able to build our consignment business fast enough to cover the rent. What do we do?
Kelly
Kelly, maybe the best thing to do is a “best-guess” financial examination. What will the move COST you? (Not just labor and a rent-a-truck, but advertising, time closed for business, lost customers).
And the new location expenses: fixtures and equipment, decor, build-outs or refurbishing, signage, general fix-er-up.
Then compare leases.
Then do a best-guess scenario. Not only will your rent increase… chances are so will utilities, payroll, your own involvement as owners. What increase in profit will cover all this AND make the pain of moving worthwhile?
While you’re doing all that, one more thing: a move is an excellent time to fine tune whatever procedures or policies or even hours of business you’re been contemplating. Would any of these changes impact your profitability?
Your potential location sounds great. Now find out what’s WRONG with it so you can maintain balance. It’s like young love. You don’t notice he picks his toes until it’s too late.
Thanks for following my blog. Hope you enjoy my site and social media as well, and I look forward to being able to add your two businesses to the HowToConsign.com Resale Directory as soon as you’re settled in!
Kate,
Thanks again for the sage advice. We will have a very limited set up fee to incur as this space was already a retail shop and has all slat walls. A plus for us!! The only thing we would want to do is paint. Everything else is good to go. And it’s literally around the corner. We have our own trailer to move everything ourselves and the manpower to keep those costs down. We are checking into the utilities and are hoping they’re not as high in the new shop. The space we have now was designed for 2 floors but never had a 2nd floor added so we pay to heat and cool a whole story that isn’t there! We do have the option to add a 2nd floor if we want to but we don’t know if this is an area that we will thrive in because of traffic and lack of other shopping opportunities here. We feel like if we’re near other shops where people are shopping we’ll increase sales through them along with higher visibility. All signs says do it…but it’s such a big step we’re just anxious and don’t want to make a dreadful mistake that could cost us. So much to think about. Does anyone really ever get rich from owning a consignment business because we’d sure like to! Thanks again, and wherever we end up we’ll be sure and add our businesses to your directory.
Kelly
Big decisions are SCARY, that’s for sure. I HAD to move my shop around Year 8 or 9… the landlord was selling the building.
I had to choose: go smaller and eliminate staff problems? (Real tempting!) Go bigger and add to every cost and every worry?
I chose bigger. Here’s what happened:
* Overhead was easily 2 1/2x more (not to mention staffing problems)
* Old space was immediately remodeled, so folks who came looking for me were totally flummoxed
* Neighbor resale shop decided she’d say “don’t know nothin'” (or worse) when people asked where we went
* Even though I was 1 1/2 blocks away, lost MAJOR established customers
* FIRST blasted customer in new space looked around, said “Oh this is too big I can’t shop here” and fled. Way to build my confidence…
Now here’s the GOOD news.
* I started making real money.
* I found a GEM of an employee who
* 10 years later, bought the business from me.
* I retired at age 48 as a multimillionaire.
* My protege still runs the shop, has expanded it incredibly, and the shop is the pillar of what’s now commonly referred to as “Resale Row” since others followed my and Chris’ example!
Hello Kate,
Several months back I purchased your book and read most of it. I have been looking for the perfect real estate spot for furniture consignment.
What I found out that there is not a perfect spot and everywhere has some type of challenge to overcome. It seems like it Is just a decision based on intuition and try to get as much as possible on the checklist.
However, I realized from your chapter on averages on revenues per sq. ft. that I would need at lease 3000-4000 sq. ft for furniture.
Then I came across a space that is downtown that blew all my checklist requirements out the window.
This space is 2000 sq ft.,, 1700 sq. ft inside due to thick walls. The existing business was antique furniture and the shop is very successful, they are moving to a larger space after 6 years. I am attached and will probably move forward with this space.
My intention will be to only take more unique special pieces and create a smaller unique shop. So, hopefully the pieces will be a bit higher quality and not as much volume. Wondering any feedback you may have? On following intuition and throwing out all the formulas that I originally had????
Thank you for your time,
Seva
Sounds like you love this space, Seva, and its history as an antique shop will certainly help with traffic!
The main concern with specialty consignment shops is getting across to potential suppliers what you do and don’t take. Of course, ALL shops do this to some extent, but the more specialized, the harder to attract the goods you want to sell (and that, of course, your shoppers want to buy!) eithout making suppliers feel your range is too narrow for them to bother bringing you stuff. It requires finesses, diplomacy, and a LOT of outreach to sort through… and to convince would-be consignors that A and B are great, but C,D and the rest of the alphabet are not things that would work with your customer base. Working with pickers will become a necessity, as well as active (and lucrative for them) connections with other consignment and resale shopkeepers throughout your region.
Intuition is a lovely thing, but I personally have a hard time separating my “gut feelings” from my dreams. I’m not saying not to follow yours, but keep your eyes open and on your financial and life goals so you don’t end up, as so many do, with a shop “everyone says is lovely but I’m not making any money” type of scenario.
Let us know how it goes, and best wishes!
Thanks to Kate, I am enjoying my new consignment shop to the max! I do have a question I hope someone can answer-are there businesses out there that would buy no-thank yous that are really no-thank-yous-for turning into some other kind of product, like soda bottles to carpeting? I am in the state of VT, and would like to find such a company.
Dear Auntie Kate…I really enjoy your blog posts and newsletter. I also enjoy interacting with other resalers. Would you be aware of any open forum for resalers? Maybe you have one yourself and I’ve missed it. I need to vent to my resale colleagues about things only a consignment shopkeeper understands.
Vent away on Resale Connect, a closed group hosted by Vena Holden on FB.
HI Auntie Kate
I own a children’ s resale store in California. I have been in business for about 2 1/2 years. We started out offering store credit for merchandise that was brought in the store and the customer could use the store credit on the other used items. It worked well, and we are profitable but I want to change the way we are doing things because I don’t think my cash flow is as good as it could be. I am not sure if I should change to totally consignment or to paying cash at a discounted rate for the inventory that comes in. If I give cash how are you sure they will use the cash in the store or take it and run. I have a pretty large customer base that grows daily. I ordered your book but have not received it yet. If I do change to cash, what about all the store credit that is out there. Please give me your advice.
Shirley
Hi Shirley, Wow, that’s a GREAT question. To see if I can offer any helpful ideas, I am going to assume that you ONLY offer store credit for incoming goods? And that the choices you want to examine would be consigning-only, or buying-for-cash-only?
If the biggest concern you have is cash flow, changing the way you obtain merchandise won’t help. I think what you’re looking at is that either you are too generous with how much credit you offer (thus, the credit-holder never has to ante up some US currency when she finds things she wants) OR you don’t have enough non-suppliers shopping with “real” money. If you are happy with the ratio of credit you issue to selling price, then cash flow will ONLY improve with more moolah-bearing buyers. (Alternatively, you could be simply issuing too much credit for what you can get for items.)
Again, if you’re looking at cash flow (as in “I can’t pay the rent in used clothes” 😉 ) then buying outright for cash will just make your problems MORE acute… unless you pay WAY less in real cash than your suppliers have gotten used to receiving in store credit. Which could be a PR nightmare.
Consigning, of course, means no money paid out until and IF sold, so that helps cash flow… but WILL your suppliers go for that, since you’ve trained them to expect store credit immediately? Yes, if you handle it properly, as in “we share the profits and the risks.”
I think it all boils down to how happy your suppliers are now, how they will take any changes, and whether you feel you are receiving the best of the best incoming. My gut feeling, never having worked with a shop which offered store credit only, is that the “best of the best” potential suppliers wouldn’t use your shop. If I am a parent whose little one is dressed in the infant/toddler version of diamonds and mink, I’d have no use for credit in your store and would, in fact, be slightly offended that you’d even think Lil Precious might wear some other kid’s castoffs.
And of COURSE you know that much of the cash you might be paying out will be put in the seller’s pocket, as you say they’ll “take it and run”. That’s fine, as long as you have purchased their items at a price that will enable you to make the kind of profit you want. And that person with the cash in her hand is a PRIME customer, so it’s up to your selling abilities to get them to hand it right back!
Finally, what to do with “all the store credit that is out there”… that’s a legal obligation on your part and must be dealt with in the proper manner to avoid an orange jumpsuit. Ask your lawyer, your accountant, or your state small-business office.
Hope I’ve given you some angles to examine… let us know what you decide and how it goes!
Wow, You have given me some angles. Thank you so much and you have made some valid points. We do get a lot of higher quality clothes. I think it would be a nightmare if I did consignment at this point because I have too much store credit. Maybe you are right and I need to up my selling abilities to have them purchase more beyond store credit and train my staff to be more picky in the selection. Have you ever worked with stores that do credit and cash? From what I understand they give a store credit and a lesser amount in cash. I am not sure which way to go.
Shirley
Shirley, glad to be able to offer suggestions to you. I don’t understand though… why would switching to consignment have anything to do with outstanding store credit? Store credit = stuff you have bought. Done and finished. Consigning = stuff you are selling for them, without payment until sold. Going forward. Am I missing something here?
Yes, in fact, most shops who DO offer “store credit for incoming” DO also offer consignment at the same time to the same suppliers, but it’s not something I would recommend. WAY too far from the KISS way of operating a business in my opinion.
Interesting discussion, just wanted to offer our experience… we are a buy outright store with about half clothing, half home goods/decor/vintage/etc. We decided right at the beginning (about a year and a half ago when we opened) that buying upfront was our best route. For non-clothing items, we offer about half of what we intend to sell the item for; clothing is a lesser percentage, prob 25%, because of the space/labor involved. Since there is almost nowhere else here that pays cash upfront for clothes we were getting way too much inventory, so recently I switched to in-store credit only on clothes. However, for some categories of clothing where I have weak spots–guys jeans and shorts, for example–I will still do cash. If the customer really only wants cash and they have women’s or children’s items, I usually figure what I would do in-store and then take off 25-50% of that amount as a cash offer. I am also careful to explain that if they decided to sell the clothes themselves they would probably make more money on it, but it will take much longer…there is a trade-off between time and money. I never pressure anyone to accept our offer–in fact, I almost encourage them to try selling it themselves if they have any doubt, via FaceBook group, garage sale, etc.
In Shirley’s situation, I would think that continuing in-store credit but scaling back on how much is offered, while perhaps offering a certain percent lower in cash, might be a way to change things a bit and see what happens. You wouldn’t want to overhaul the entire business and find out that’s not the right solution! I do see Shirley’s point about going to consignment… you’d be paying cash out to the consignors but not receiving cash from buyers who are using in-store credit. That sounds like a big cash-flow problem!
Carrie,
Thank you for responding. I have read Aunt Kates response also and talked to a person who worked at another resale store. I think I like this. Still offer store credit, offer a lessor amount in cash (25%) and consigned only the larger $ items like Bob Strollers, or strollers that are a higher value. I don’t want at this point to do all consignment. Like you said Kate, it would be a nightmare. I only want to tweek the way I am doing things to bring in better items to a normal person that would generally not shop in a resale store and to possibly increase the cash flow. I do also sell new stuff.
Shirley
Hi Kate,
I plan to open my children’s consignment shop in early 2014. A key differentiator about my shop will be an exclusive focus on higher-end brands. I blogged more details about it here: http://www.southbystyle.com/2013/08/i-have-to-tell-yall-something.html
In the meantime, I am going to have a booth at several festivals and open air markets to drum up interest and capital. At these type of events, I plan to carry lower-end brands that I won’t carry in store (Circo, Old Navy, etc.). I want to be able to carry these brands because I think the lower price points will do well at these type of events. Do you think this is a bad idea? Could it maybe dilute my bricks and mortar store’s high end identity? Would love to hear your thoughts!
Lauren
I’m not Kate, but I do have a shop, and I have to say that I am confused as to why you’d offer lower quality brands at your introductory events. I think yu are doing it to raise capital-correct me if I am wrong. But you are trying to raise brand awareness for your new shop, and your differentiator is the type of cloth you carry. Seems to me youd be.misrepresnting your brand and that can be hard to change from what I have heard. In addition, if you are advertising your presence at these events and seeking to build your consignor base, they’ll be confused and wonder why they are bringing their Rosalina or Splendid or Bailey Boys to the shop that publicly represents itself with Circo.
Are you having troubke getting your inventory for these events, and that’s why you’re thinking about going this direction?
In addition, if you think that Circo would be a great seller at these events but your premium brands might not, are you sure you’re attending the right events?
I started out with a little lesser quality apparel than I would have liked, and now I’m dealing with the issue of explaining that we don’t take any target brand or mass merchandise or department store in house brands-and it’s something a few of my clients still don’t understand.
You’re already going to have the people who bring you the dregs of the back of the garage floor-I wouldn’t start out encouraging them by selling those brands if I could avoid it.
Auntie Kate,
Settle this for me, I can’t stand the comparisons anymore!…What the difference is between a flea market/garage sale and a resale shop?
Hi GL, if you’re asking from a consumer standpoint… that is, you’re wondering what would be the best place for you to shop, here’s that answer. You might also find the articles on our consumer web site helpful, at http://howtoconsign.com/journal.htm
If you’re asking from a current- or potential -shopkeeper standpoint, the answer’s in the Manual!
No Birkins, but very high quality designer nonetheless. I would like to add to my existing inventory so I wanted to make an offer on the consigned pieces and client list. Just trying to figure out a good starting price to go back with. Many thanks for your help and open to all suggestions from readers….😃
No problem. Since you are a current shopkeeper, presumably within the same market area, you would know better than anyone how much this merchandise will net you, and how much having the names of their clients is worth, from your prior sales history…. not from theirs!
Thanks for getting back to me…I am interested in buying the shops merch & client list. The gross revenue can give me an idea of how much I can expect in sales. They are asking 350k for 600 consigned pieces and 500 owned pieces along with client contracts. annual sales are $223k. I am clearly not going to pay 350k for contracts and merch as it would take a decade to turn a profit if annual sales are $223k but i want to go back with a reasonable and realistic offer. Do you have suggestions? A percentage of gross revenue?
I am not sure that trying to deal with a business handing you these figures is a reasonable spending of your time, but here goes:
There are all sorts of rules of thumb for what a business is worth… you might start with my Business Valuation/Selling/Buying a Shop Product here http://tgtbt.com/shopthrive.htm#15 , and then go on to my personal favorite “starter” book, the Thomas Horn book (here it is, #10 on this Amazon list: http://www.amazon.com/lm/R3DDX9B5MA0KGB/ref=cm_pdp_lm_all_itms)
And as Connie says, consigned goods aren’t theirs to sell… so it still sounds like you’re being asked to pay $350,000 for 500 pieces of merchandise and a client list that enables the owners to earn $223,000 in sales. Many factors go into the value of a consignment shop, the LEAST of which is the number of pieces of store-owned goods. Unless, of course, she’s cornered the market on Birkin handbags!
Let us know how it goes, and best wishes.
Kate,
Correct me if I am wrong (I do buy outright kids), but if the stock is consigned, the existing store does not own it. It also sounds like she is pricing this at retail, not cost. If so, Ms. Jullian, I wouldn’t touch that with a 10 foot pole.