A consignment store sells goods for individuals who pay a fee to the store owner to sell their goods. Consignment stores may sell specific items or everything from furniture to clothing. To successfully manage a consignment shop, you need retail knowledge and funding. Revenue varies and depends on many factors. In 2014, Goodwill Industries generated $5.37 billion from its 2,000 stores.
You bring items to consignment shops to display and sell, typically splitting proceeds 50-50. You get paid only when your item sells. Consigning means selling through a third party that takes a commission. Benefits include extra cash, easy decluttering, and effortless inventory management. Overall, consigning is a low-stress way to make money from unwanted items.
In 2018, the U.S. resale and consignment industry generated $17 billion. Profit depends on subtracting expenses from revenue. Sellers may concede 25-60% of the price in fees. If no sale occurs in the period, goods return to the owner.
Location affects success. Consider rent, overhead, demographics, habits and patterns before choosing an area. However, well-run online shops in high-traffic areas can be profitable. They usually sell items for a third of retail price, keeping 60% profit and giving 40% to the original owner.
Starting an online shop costs about $2,500 for a website and marketing. A physical shop costs about $13,000. Average owner salary is $42,000 but varies. In online shops, you can encourage impulse buys by altering price, placement, packaging and promotion. There’s unlimited income potential.
It takes time to sell at consignment shops. They provide profits in the long run but may not enable quick money. Consider policies before selling on platforms like ThredUp and The RealReal. For furniture, Goodwill accepts usable pieces to sell in stores.
To price resale items, sell near-new at 50% of retail, slightly used at 30%, and well-worn at 10%. Consign for set periods. Popular items tend to sell fast. Display goods neatly and enable easy online viewing to help turn high traffic into sales.
With passion and experience, consignment stores are an appealing business opportunity. Keys are converting traffic, quick turnover, quality consignments and controlled expenses. Given sufficient revenue and margins, income can rival other models.