“I have two kids, and I shop consignment,” the woman
said. “So I basically figured I know how to shop for it, so I can sell it. Then I ran across this empty store and here I am! It’s so much FUN, running a consignment shop. It’s just like the garage sales I ran for my neighbors.”
Less than 3 years later, her resale shop closed abruptly, leaving unpaid consignors, outstanding debts, and a very stressed-out family.
“I never realized it would take so much of my time. That it was so complicated. I was taking bookwork home with me every night, and my kids never got to do what their friends did, because they were always with me at the store,” she said. “It’s hard to run a business when you have two bored kids whining at you all the time.
“I priced things good but I just couldn’t sell enough. And the cost of advertising? I couldn’t do it. Every day someone would say How long have you been here? even after I’d been open 5, 6, 7 months.
“I don’t see how consignment shops make it. I don’t think they do. They must all be hobby-businesses.
“My husband finally said that the shop was just costing him too much, and we hadn’t been able to take a vacation for 3 years, and he never saw me anymore and when he did I was too tired to be any fun. So I had to close the shop. That, or give up my marriage and I couldn’t afford that…even after almost three years, I wasn’t making a living and we had to put money into the business about 5 out of 12 months, the months when it was slow.”
No one goes into any business planning to fail. But many start-ups DO fail. Why is that? Lack of capital and lack of knowledge.
Alas, all too many newbies think that taking goods on consignment means they don’t need the recommended 6 months’ of living AND business expenses ready to tap if needed. Or, for some reason, they figure the recommendation is for other people, not them. Every business needs the capital behind it to get started. And to survive not only the get-established period, but the slow seasons, the local blips on the retail radar, and the inevitable mistakes any entrepreneur makes.
And that newbie will also realize, in short order, that a love of shopping resale, cruising garage sales, and haunting rummage sales doesn’t turn her into a wise shopkeeper. Not even a background in running neighborhood sales or church bazaars is enough. Without a thorough grounding in what running a consignment or resale shop involves, all the time, money, effort, and pride expended will not be enough to succeed.
And that’s why there’s Too Good to be Threw: The Complete Operations Manual for Resale & Consignment Shops and the dozens of other Products for the Professional Resaler. I hate to see that sparkling joy and eager enthusiasm get wasted.
please tell me which is better buying out right or consigning others things? Kasha foret
Hi Kasha. The answer to your question depends on so many variables, it’s impossible to advise you on this. What “better” is for one person/ place/ situation, is not for another! I would like to recommend that you study the Manual, which contains information on both methods, as well as our book on buying outright, and I am sure that you will feel much more confident in your choice when you do!
Kate I need your advice because I really have a dilemma. I have a chance to move to a bigger building for 400.00 less a month in rent. The landlord told me the wrong rent amount but he is willing to stand by the amount for a year and then he would go to 725 a month, but if I do all the work, I’m going to negotiate this amount. The place used to be a former Papa John’s and the decor is horrific. It would need to be cleaned real good and painted. Part of the ceiling is missing where they came in and tore out the exhaust for the oven’s. The landlord said he would be willing to fix this gaping hole, but I would be responsible for the rest. My only other concern is some left over electrical pipes hanging from the ceiling. I would think this is the landlords problem to fix, not mine. I have about 880 sq feet now and I would have about 1300 sq feet in this building plus a whole lot of storage space. It sits closer to the street and I would have my own parking spaces unlike now. The barber shop next to me takes up all the available spaces and there is no room for my customers.
I guess I really don’t have a dilemma, I just need someone else’s opinion to push me into making this decision. I just feel that the extra 350-400 dollars a month would help me grow my business and I wouldn’t feel so stressed if I don’t have a good month. Even with the extra utilities, I would still come out ahead. Any thoughts and comments are welcome.
I agree, Sweet Repeats, you don’t have a dilemma. Sounds like the spot is good for the lower rent, added space and the exposure/parking. But keep in mind that getting the place into shape’s gonna cost (renovations, adding fixtures, advertising blast could well eat up a year’s worth of that $400 less a month); that you WILL lose some customers when you move (I moved 1-1/2 blocks, almost within eyesight and STILL lost customers); what the new lease involves.
So I guess what I am saying is: don’t count your rent check savings before they’re hatched, but even so, more/better space is always a plus, isn’t it?
Thanks Kate. I’ve already thought of all the renovations and I am totally in love with oops paint. Right now I can get by with cleaning and painting and I have a bunch of racks already that I don’t use. I make lamps and I can use these to add to the lighting in the store. I sent a proposal to the landlord, so we’ll see. I may just be staying where I am.
Hi, I have a flower shop already that is not paying its bills, I am thinking of just having one section for my fresh and silk flowers shop and wreaths, and maybe setting up the front of the store as sections for people to rent and put arts and crafts and vintage etc in. How does that work? Do I charge so much space for so much and then when something of their’s sale does all go to them or do I take a percentage? I can not find any source of information.
Thanks.
Hi Tammy, It works any way you want it to! (Well, any way you AND YOUR TARGET MARKET want it to…)
Try googling rent a craft booth and variations on that to spend some time looking at all sides of the issue. I’m sure your floral industry association has info, a discussion board, and probably even specific guidance on this, since most florists show lots of other things in their shops!
Best of luck with it,
Kate
Hi Auntie Kate, I have been doing research on opening a consignment/resale shop for 5 years now. I currently rent space at a local antique flea market, where my sales pay the rent. I am interested in opening my own shop but like April I would prefer a store front online. I am also a full-time doctoral student and hold a Masters Degree in Business Administration. Is there any advice that you or the other posters can give me regarding online resale. Your comments are appreciated.
Welcome Katrina! Please consider this your invitation to visit our Too Good to be Threw Sharing discussion board on http://TGtbT.com, the industry’s premiere site for resale professionals. As a matter of fact, there’s LOTS of viewpoints there about selling online…and a search engine to help you find them! While you’re on TGtbT.com, don’t miss all the free articles and ideas!
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