Starting a Consignment Shop

By Donald Michael Schwartzstarting a consignment shop

Job Duties

Starting a consignment shop can be very rewarding. In a consignment shop you will arrange contracts with sellers to put their items up for sale in your shop in exchange for getting a commission when the item is sold. When starting a consignment shop you will first need to decide on the theme of your shop. It could be baby and/or children’s clothing, antiques, vintage clothing, sports equipment, various kinds of memorabilia, etc. Some prospective consignment shop owners might want to have a variety of items. This is OK as long as you still have some overall theme to your shop.
When starting a consignment shop your job is to write the consignment contract, with all its terms spelled out. You will be responsible for securing the items till they are sold. You will need to relay information about the items to the potential buyers and send the percentage of the sales to the sellers.

Where will you work?

Consignment shops owners can set up shop in any town. There is always people who are interested in selling and/or buying used items, especially collectibles. Consignment shops can be in lower income areas, where people are usually looking for a bargain.

Basic Costs

When starting a consignment shop you will need to rent a retail space, pay the utilities, purchase display cases and racks. You will need to do some advertising, but it can be classified or flyers. You will need to hire an attorney to help write the consignment contracts. You will need to purchase insurance to cover the possible loss of any items you will have up for sale. You will need to pay any necessary licenses and fees. You will also have to make an investment into decorating or setting up your store before you move in.

Tips for Starting a Consignment Shop

Be reliable – you will need to make sure that the posted store hours are covered. You need to maintain your reputation for quick and accurate payments to sellers. When consignment contracts are expiring you will need to notify buyers about renewals or pick up of merchandise.

Know your product – When starting a consignment shop go into a line of consignment goods for which you are knowledgeable and passionate. The customers and sellers will rely on you to know the values of the goods.

Know your market – You may already know a market by being an active collector and seller. A city’s Craig’s List activity can be another sign. If, for example, you want to consign model railroad items, the town that holds conventions should have a core of enthusiasts.

Hire employees carefully – Check the references of your potential employees. Your top sellers would make good employee prospects.

Carefully consider the type of items you want to sell – This is very important. Get to know a particular market by visiting similar store, or visiting a related trade show. Make sure there is a demand for your product in your community.

Liability insurance – Make sure you completely understand your liabilities and the best kind of insurance to cover sale items and the rest of your business.

Communicate clearly – Make sure prospective sellers understand what services you do and don’t provide. Make sure you and your employees make it clear and truthful what customers are buying.

Keep learning your market – Trends are always changing. What is hot today may be hard to sell tomorrow.

Enjoy yourself – People who come into consignment shops are not there just to buy or sell, they want to talk to someone who shares their passion and knowledge of class of items up for sale.

Advertising a Consignment Shop

When starting a consignment shop you can advertise through the following methods. You can test various forms of advertising to see which are the most effective for your business in your location.

  • Walk by Traffic– When starting a consignment shop your location can be a big factor in attracting walk by traffic
  • Flyers– Determine if you can put up flyers in local grocery stores, bakeries, restaurants, community centers, and more. It is best to ask the owner of these businesses for permission first. Also hand out flyers to passer byes on the street.
  • Consignment Shop Business Cards– Create business cards and hand them whenever an opportunity appears. Network as much as possible.
  • Yellow Pages– Consider buying an advertisement in the yellow pages of your local phone book. You can also include your business in the online version:
  • Having a listing at can help people that are searching for your service or product locally find you.
  • Yahoo Local Searches– If you include your business in the Yahoo Local Searches, when people search for your service in your local area your business will appear in the list. To add your business to Yahoo local search, enter the term “add business to yahoo local search” in and click on the first link.
  • Google Local Searches– Google has a local search as well. To add your business to Google local search, enter the term “add business to google search” in and click on the first link.
  • Newspaper classified ads– Newspaper ads in your local newspaper can help spread awareness of your consignment shop.
  • Website– You can decide to develop a website to provide clients with access to general information about your consignment shop as well as sell your products online.

Not sure about starting a consignment shop? See a list of small business ideas

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One thought on “Starting a Consignment Shop”

  1. We are a few weeks away from opening a furniture and home decor consignment shop. After visiting numerous existing consignment shops in Illinois and Indiana, we learned that the majority of shops used a 50/50 policy on consignments. Internet searches revealed similar information. However, our community has another consignment shop with a 70/30 policy. After considering the risk of not attracting consigners, we developed a tiered policy: 50/50 for items with original tag prices of less than $100, 60/40 for items $100 to $199, and 70/30 for items $200 and greater. We will also offer the 70/30 for “original” items made by the consignor: (pictures, pottery, etc.) I would welcome opinions from other shop owners and consignors.

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