Thread: Wanting to open consignment shop

I don't know and have no advice....but I applaud you for making lemonade when from lemons. That would be an excellent venture to invest in during this current economic environment.

I wish you luck.

I see it as a win/win/win situation for all.... The donor/seller gets a return for their clothing, the buyer gets a bargain....and you get a commission and satisfaction from the transaction.....everyone's happy....

http://www.sba.gov/services/financia...nce/index.html Start here and try your local colleges and librarys for advice also. They can usually point you in the right direction.
If you live in a good area that can be a very lucrative business to be in right now. The thrift stores and used goods stores are the only thing doing well here right now. I know someone that owns one... If you can't find any help, pm me and I can go talk to her for you. She is a sweetheart and would give you advice.

I think you go to a bank to apply for a small businessman's loan.

I worked in a nice consignment shop when I was in college, run out of a small house that was zoned for retail. They carried a lot of designer labels, and would take things that were in very good/excellent condition only. It was mostly women's clothing, with a smaller childrens section. No shoes, though they would take exceptional purses and a limited amount of jewelry. No men's clothing were carried in this shop. The consignment split was 60/40 (60 percent to the seller, 40 percent to the shop), with markdowns on merchandise every 30 days. We kept very detailed sales records, of course. The consignor had the option to pick up what didn't sell after 90 days, or have it donated to a charity by the store. One of the women who ran the business also knew someone who ran a boutique clothing store, and they would send their out of season clothing for consignment. The store owners were also very mindful of keeping seasonal clothing in stock, and were fairly fashion conscious. Consignments were received only during certain hours (usually mornings) or by appointment only -- no drop-ins. Checks were sent once a month to the consignors. There's more, of course...

It would probably help you to get a loan if you drew up a business plan. You'll need to have an idea about what your recurring expenses will be (rent, utilities, advertising, supplies, postage) as well as start-up costs (display racks, hangers, other fixtures). Will you be set up to take credit cards? Will you set it up as a corporation? That would help separate your personal assets from your business assets, in the event that the business runs into problems.

If you have the means and the time to do this, it is a very good business -- but do your homework and check out the competition. I know some consignment shops only carry childrens clothing; some only carry women's or men's clothing. Some try to do it all. See what prices are at other thrift shops. Determine what you want the focus of your business to be.

ETA: You can PM me if you want to know more details.

If you do a corporation it would probably be easier to get a small business loan, but make sure you check in to the taxation laws regarding corporations too. If you have decent enough credit a sole proprietor may be the way to go until you are established. Good luck!