Consignment Store Inventory

While you might think that finding enough inventory to fill an entire consignment store would be a big problem, almost all consignment store owners will actually tell you they have never had a problem getting inventory. The big problem (or opportunity) is to be choosy enough to have room for the items that come in that you really can sell.

Not only to you have to be choosy in order to keep sales up, but you have to be choosy in order to keep the reputation of your store up. How you handle this depends on whichever niche you want to cater to, but most profitable consignment stores tend to work the high-end angle. $1 blouses and $20 tables are more for the thrift store set (which is fine and good... we all love thrift stores), but in order to make the consignment process worthwhile to both you, the owner, and the consignor, you'll have to be moving inventory that makes it worth your while.



Actually, an excellent metric to track for your store sales and inventory is what percent of items you consign ever actually sell. If you can break that figure out into different categories of merchandise, like dresses versus coats versus shoes, you may start to see some information that should be influencing the kind of items you buy.

Some basic rules of what to take and what to skip for inventory include
1) anything you've already got a similar item of
2) anything that is not cleaned and in good or better condition (leave the salvage jobs to the thrift store people)
3) anything you tried to sell in the past that did not sell
4) anything that is either totally out of style or totally out-dated (like a 5 year old computer... there are exceptions to this, as anyone who is looking for a working record player will tell you)
5) anything that is worth less than $10, or $20 or whatever your cutoff value is

If you want to save everyone a lot of time, you can list these requirements on your consignment agreement and consignment policies. Many consignment store owners have short lists of items that they never take, but that people keep bringing in to sell anyway.

Another way to control your whole inventory intake is to set aside specific time blocks on specific days when you will review items to take on. Thursday afternoons seem to be popular for this, typically from 2 to 6pm or so. Give yourself enough of a time block to go through everything, but do not fill up prime-time weekend shopping hours. It is nice, though, to have even a couple hours a week for consignment drop offs that are outside regular business hours, just so all the working people can get to you without having to leave work early.

Here's another way to look at inventory as a powerful determination of your profits. Consider a few things: Consignment articles typically run about 50 to 70 percent below retail. The typical consignment agreement lasts 90 days, which means the items you buy will be in your store either until they are sold or for 90 days. Let's say you have 3000 items in your store at any given time, and you sell half of the items you take on. That means over the next 90 days you'll sell roughly 1500 items, or 500 items a month.

If your average item costs $30, and you sell 500 a month, you'll sell $15,000 worth of merchandise. With a 40/60 consignor split you'll keep $9,000 of that. If, instead of selling half of what you take on, you sell 60%, you'll earn $10,800, or $1800 more. And that is without spending an extra dime on overhead, or advertising, or anything else. So if you can get that inventory items to sales items ratio up, your whole store and business can become markedly more profitable.

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