These “malls” of consignment and antiques booths can be a terrific way to get your consignment business off the ground and out of your garage. Here’s how they work.

You rent a booth (or even just a shelf) in a large store that has lots of floor space and one to fifty-one other people selling antiques and/or consignment and/or used goods. You pay up to $300 a month or more for a large space, and possibly as little as $75 for a shelf or a bookcase.

In addition to the payment, your responsibilities include tagging all your merchandise according to store policies. You many also have to do some “shop time” working at the cash register of the main store. You will also have to update or rotate your inventory at least every two weeks, and preferably every week. Many Co-ops also require you to have seasonal displays.

While its great to not have to be in the store all the time, you will lose a few sales simply because you’re not there to make your great sales pitch. Some people can compensate for this by getting really creative with their inventory displays, but even clever displays can’t beat having a real person standing by to explain what things are. Finally, you’ll have to be available by phone at a moment’s notice in case someone makes an offer on your inventory. If you miss the call, you’ll miss the sale.

The good side about group shops is that you don’t have to be at the shop all the time. So if you’re a mom, or have an aging parent, or have a part time job (or even a full-time job), this may be the only way you can actually have a “store”. The cost savings are also a major benefit — your rent for having a small (very small… maybe 10 feet square even for a “large” space) is a heck of a lot less than what it would be if you had your own store. You also will not have to handle sales tax and the myriad other issues that a store owner would face, and that alone can be worth 20 hours a month of free time.

There are some ways to size up co-ops, and security is typically the first priority. Because you won’t be there, you need to trust these people, and their security systems, enough. Good signs include the store having security cameras placed thoroughout the store, and not allowing customers to bring purses or bags into the store while they’re shopping. They have to either leave their bags in their cars, or put them in a locked locker inside the store. Another good security tip is that the store managers go through other sellers’ boxes when they are taking inventory out of the store (so another seller can’t walk off with your stuff).

If you can get into a good place, these group shops can be really terrific. If they are located properly, you’ll have an excellent location, with good foot traffic, and then you’ll get even more foot traffic because customers are attracted to the “mall” factor. Just be aware about security, and get really good at making eye-catching displays.

Starting a consignment shop sounds like a lot of fun, especially if you love clothes or furniture, or whatever it is that you plan to sell.

It can be a great way to make a living at a hobby you love (like a consignment shop for photographers, for example), but there are a lot of management skills required, and a lot of other personal traits you’ll need. Here are some traits of successful consignment store owners.

1) Discipline. Its great to be your own boss, but there are trade-offs. You will be the one who has to fire people, for example, and that is not fun. You will be the one who has to make sure the accounting books are right, that the security lights really are coming on at night, that the landlord is not cheating you, and more.

There are a thousand little details that you’ll have to attend to every day, and you probably won’t feel like dealing with them. So you have to have the discipline to let go of the work you’d like to do, and do the work that has to be done. You’ll also have to have the discipline to not accept consignments you like, but you know won’t sell.

2) Thrift. Can you squeeze a dollar until it screams? Are you as tight as the bark on a tree? You may have to be. Consignment can be a lean business, especially as you are starting out. You may actually have to take a side job part-time to be able to keep your store going. And you may have to think of dozens of ways to get things done (like dressing store windows, like marketing, even like having store help) that require no money.

Consignment store owners that stay in business know every dollar they do not spend is actually a dollar they have just earned (thank you, Benjamin Franklin). Those of us who pay taxes also know that every dollar you do not spend is actually the equivalent of that dollar plus whatever your tax bracket percentage is, plus whatever it would have cost you to earn that dollar. You need to adopt that outlook fast.

3) Attention to Detail. Are you… um… a flake? Hopefully not, because the thousands of little details to managing a consignment inventory are not suited to flakiness. Even if you do get a great software system up, and you follow it religously, there are still going to be dozens of exceptional situations that you’ll need to remember.

That said, some “flakes” get by just fine — they know they can’t remember things, so they acquire the discipline to set up systems that overcompensate for their forgetfullness. To paraphrase Einstein on this concept, “why remember anything you can look up in a book?” All the personal mamagement systems available today, combined with a great PDA, may be able to make you a management star even if you weren’t born as one. But you are going to have to work to get there.

4) Good with people. Consignment store owners should be extroverts. The only possible exception is if you plan to do the bulk of your business online, but even then you will need to be talking to quite a few people. If you have a store, you must be outgoing and kind enough to be nice to customers even when they are being stupid and inconvenient (and unprofitable, and when you’re tired and need to be doing something else).

A lot of the success of your store depends on how much people like you, so if you are really good with people, you will have a major advantage from the start. For those of us who are not good with people, get yourself a copy of “How to Win Friends and Influence People” by Dale Carnegie.

5) An eye for merchandise that sells. This can be acquired with experience, but some people are just born with it. They know what sells, when most of us would just skip over the item at a garage sale.

Frequently these merchandise gurus are also gifted salespeople, though not always (what a great partnership for a store — one who can pick it, and one who can sell it). If that sounds like you, your consignment store may already be set up for greatness.

It is an extremely wise idea to get some real-world experience in the resale business before you attempt to launch your own consignment or second-hand store.

Even a few days spent at this effort will teach you volumes of critical information that you need to know to make your store a success. In fact, after writing the business plan, getting a bit of resale experience should be next on the list of your must-do consignment store planning.

So, where to get this experience? Here are several ways to go about it



1) Run one to a few garage sales

Almost anyone can benefit from clearing out their house for a garage sale. If your house is one of the very few that have no junk, try to help a friend or a relative. Hunt down used appliances, clothing, sports gear, gardening gear, tools and whatever you can find. Get some practice in marking items clearly and in getting people to come to the sale. See which kinds of signs work best, and carefully watch how people review the merchandise you have for sale.

2) Get a flea market booth

This is a terrific way to ramp up your business before you have to start paying for a retail location (OK, actually, you will be paying for a retail location, but a booth is cheaper than a lease). You will need several portable tables and a clothes rack if you are selling clothes.

Doing a booth for a month will teach you a tremendous amount about pricing and how people shop. If you have a website, or if you are gathering a list of email address to send a grand opening announcement to, be assertive about getting people to fill out their names and information. That customer list will become your best marketing tool.

3) Work in a Consignment Store

Even a short stay and a Salvation Army or a Goodwill Store is much better than nothing. You may run into some issues of competition if you are working in a consignment store that sells similar things to what you want to be selling. Its up to you if you discuss your business plan with your current employer, but honesty generally is the best policy.

Working in the rows will give you intimate knowledge of payment options, stocking, traffic flow, layaway policies, security and a bunch of other issues that you can not learn just doing a garage sale or a flea market booth.

4) Work at an Antique Store or a Antique Show or an Auction House

Antiques are a world unto themselves, but if you are going to be selling furniture or high-end housewares in your consignment store, the issues around antiques are going to come up, and you had better know about them sooner or later. Another nice benefit to doing these shows, or working in a store, is that you’ll meet all sorts of people “in the biz”. One of them who wants to unload a bunch of their inventory for cheap might be a goldmine for your stores startup inventory.

Finding the Software That Makes Business Easier For You

Computers have made our lives easier, and they have revolutionized business in the process. Even consignment stores have found the efficiency computers bring to be incredibly important.

While some consignment store owners may wrestle with the decision to computerize their shop, there are many who feel it is impossible not to. Some of the items that can make it easier to run a consignment store include a computer, printer, software, bar code reader, receipt printer and a computerized cash register.


Why Implement A Computer System?

With a system in place that computerizes your store, you will save several days work at the end of the month trying to organize your receipts and finances. With a computerized system, you can actually post the point of sale right into the consignorís account when the item is purchased. This makes it easier for you to manage your cosigners and what they are owed.

When you have a good system in place, you can get daily, monthly and yearly reports on sales, items donated and anything that has not been paid to a consignor. You can see what sells better in the store and what you donít sell much of. In short, it makes your entire store more efficient and easier to run.

Price Tags

Price tag software can help you make price tags that are clear and well-designed to catch your customerís eye. With price tag software, you can program several different formats; including having a single price that is marked down to a different price. An example of this is

Pants $14.99
After 2/27/10 $12.99
After 3/27/10 $ 8.99

With markdown tags that are entered in software and printed off the computer, you can avoid handwritten reductions which saves you time.

Making Managing Consignors Easier

Managing your consignment contracts can be difficult at times, especially if you have a large amount of consignors. For every consignor, you need to assign merchandise to them and you have to monitor when the merchandise is sold so that you can pay the consignor their share. Without a computer system, this can be incredibly time consuming. If not for anything else, having a computer system and consignment software in place will make your life much easier with consignors and their contracts.

You can enter all your consignors into the software with all their merchandise to them. At this point, with your point of sale computer, you can set up an alert so that when the consignor’s merchandise is sold, you know about it. With that information, you can now make sure the consignor gets their share quickly and easily. The easier and quicker they get their money, the more often they will work with you when they have more merchandise they want to sell at your consignment store.

It would take days to sort through receipts and inventory to see what has been sold so that you can get the consignors what they are owed, if you didn’t have the computer software system in place. With this system, you save hours and in the world of business, time is money. This is why more and more consignment shops are paying the extra cost to get systems put in place that make their lives easier and their shops more efficient.

The world is computerized, and consignment shops need to be as well.