business plan for consignment shop

Consignment Store Business Plan Template

Written by Dave Lavinsky

Consignment Store Business Plan

You’ve come to the right place to create your Consignment Store business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Consignment Store businesses.

Below is a template to help you create each section of your Consignment Store business plan.

Executive Summary

Business overview.

Casual Consignment is a startup consignment company located in Houston, Texas. The company is founded by Terri Cooper who has experience in both retail clothing sales and consignment sales Now, with the expertise of knowledge and business acumen, Terri has determined she can confidently start and effectively grow a successful consignment company. Terri believes her experience of strategic growth, marketing skills, financial capabilities, and wide and deep knowledge of consignment and retail sales practices will provide everything needed for long-term growth and profitability.

Casual Consignment will provide a comprehensive array of women’s clothing for a wide variety of clients. Casual Consignment will be the popular clothing store for all ages, providing services and products to each client while supporting the strategic goals of the company. Casual Consignment will be the ultimate choice in Houston for clients to ensure that every need of the customer is fully and completely met.

Product Offering

The following are the products and services that Casual Consignment will provide:

• Curated clothing for resale of excellent quality.
• Clothing that has been cleaned and ensured to be of high quality
• A diverse range of clothing, including outerwear, sportswear, women’s casual, young teen, and children’s garments
• Fair and transparent pricing, with original tags secured, if possible and markdowns clearly identified
• Customer values in handbags, jewelry and accessories
• Day to day excellent customer service
• Private rooms to try on clothing, if desired

Customer Focus

Casual Consignment will target the adult women of all ages, teens, and children within the greater Houston region. The consignment store will also target retailers who are seeking to refresh inventories or add to offerings in their establishments.

Management Team

Casual Consignment is owned and operated by Terri Cooper. She recruited a former administrative assistant, Cary Brown, to be her store manager and help oversee the store and take on operational duties. She also recruited Manny Jaurez to be the general maintenance man and assistant in stocking and inventory.

Terri Cooper graduated from Houston Lyons High School in 2007 and began to pursue her concept to open a consignment store. She studied consignment sales at Pine Valley Community College while obtaining her associate of arts degree in business. She also worked for ten years within the consignment retail industry, where she became very well known and respected for finding the most appropriate and suitable clothing for a wide variety of women who needed business clothing or clothing for special occasions. Customers often wait to be assisted by Terri for this reason.

Cary Brown worked alongside Terri Cooper for five years after graduating from Houston Lyons High School. She held the role of retail assistant in an administrative position and also helped customers with questions and suggestions for wardrobe items. She will hold the role of store manager in the new store.

Manny Juarez, the former general maintenance man at the consignment store, will now be the manager and assistant in stocking of consignment items and inventory.

Success Factors

Casual Consignment will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team at Casual Consignment
• Comprehensive and curated selection of clothing for all occasions, including formal and special occasions. Accessories, handbags and jewelry are also included.
• Women’s clothing, young adult fashions, teen clothing, and children’s clothing are all included in inventory.
• Inventory changes regularly on a one-month rotation to refresh customer choices and clothing availability.
• Rigorous cleaning and clothing preparation takes place prior to inventory placement
• Casual Consignment offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.

Financial Highlights

Casual Consignment is seeking $200,000 in debt financing to launch its Casual Consignment store. The funding will be dedicated toward securing the store space and purchasing store equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Store space build-out: $20,000
• Store equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for Casual Consignment.

Company Overview

Who is casual consignment.

Casual Consignment is a newly established, full-service clothing consignment store in Houston, Texas. Casual Consignment will be the most stylish, on-trend and affordable choice for customers in Houston and the surrounding communities. Casual Consignment will provide a comprehensive selection of clothing for any customer to view and select for purchase. Their full-service approach includes a comprehensive array of curated clothing styles in excellent condition, reasonable pricing and convenient rooms for trying on clothing.

  Casual Consignment will be the favorite “go to” clothing store for all customers and will offer the best curated selection of clothing under the guidance of Terri Coopear. The team of professionals are highly qualified and experienced in Casual Consignment and are well-trained in assisting customers in every aspect of the buying process. Casual Consignment removes all headaches and issues of clothing shopping and ensures all expectations are well met while delivering the best customer service.

Casual Consignment History

Casual Consignment is owned and operated by Terri Cooper. Ms.Cooper graduated from Houston Lyons High School in 2007 and began to pursue her concept to open a consignment store. She studied consignment sales at Pine Valley Community College while obtaining her associate of arts degree in business. She also worked for ten years within the consignment retail industry, where she became very well known and respected for finding the most appropriate and suitable clothing for a wide variety of women who needed business clothing or clothing for special occasions. Customers often wait to be assisted by Terri for this reason.

Since incorporation, Casual Consignment has achieved the following milestones:

• Registered Casual Consignment, LLC to transact business in the state of Texas.
• Has a contract in place for a 10,000 square foot office at one of the largest retail buildings
• Reached out to numerous contacts to include Casual Consignment while shopping.
• Began recruiting a staff of three and three office personnel to work at Casual Consignment

Desert Sun Consignment Storeing Company Services

The following will be the services Casual Consignment will provide:

Industry Analysis

The clothing consignment industry is expected to grow over the next five years to over $70 billion. The growth will be driven by the desire by consumers to conserve clothing and wear clothing that has been sustained as a practice of reasonable use of the world’s environment. The shift in moving toward resale clothing items over new items will continue to grow as technology enables the advancement of cleaning, repairing and redesigning used clothing to produce wearable clothing that has been refashioned. In addition, software technology will move many of the routine processes to digital systems, relieving staff of the more time-consuming tasks in the retail store.

Costs will likely be reduced as technology becomes known and is used more and more freely. Costs will also be reduced by the recycling of clothing and accessories, to produce an overall savings or the purchase of new items. Costs will be reduced as more clothing stores adopt the recycle and reuse policies and fewer garments are thrown into landfills.

Customer Analysis

Demographic profile of target market.

Casual Consignment will target adult women in Houston, Texas of all ages, as well as teens, and children within the greater region. The consignment store will also target retailers who are seeking to refresh inventories or add to offerings in their establishments.

Customer Segmentation

Casual Consignment will primarily target the following customer profiles:

• Adult women of all ages
• Young adult women and teens
• Children of all age groups
• Clothing retailers looking to refresh or build inventory

Competitive Analysis

Direct and indirect competitors.

Casual Consignment will face competition from other companies with similar business profiles. A description of each competitor company is below.

Clothing On Trend

Established by Manny Buonao in 2001, Clothing On Trend is a clothing store focused on selling to young adult, teen, and pre-teen categories. The clothing sold is imported from Brazil and the pricing is comparable to consignment store pricing. While attractive and casually fun to wear, Clothing On Trend items are made of materials that are not long-lasting and many items much be dry cleaned with each use.

Manny Buonao worked in a retail clothing shop for twenty years and determined after that time to increase his inventory and build a company focused on the young women demographic. This has been profitable; however, the quality of the clothing remains and issue, as many items are returned for full value.

Everyday Consignment Shop

Everyday Consignment Shop was established in 1998 by Nancy and Tommy Gordon. The store inventory is made up of household items, decor, small furnishings, kitchen assortments, and reconditioned collectibles. Nancy and Tommy Gordon owned a retail store in Houston for over ten years before starting Everyday Consignment, where the inventory was directed to men’s clothing and children’s clothing, along with camping gear and outdoor sporting equipment.

After closing the Everyday Consignment shop, the Gordons opened the Everyday Consignment Shop, offering general household items and special holiday-themed retail items during major holidays. Some items are new and sold as overstocks; however, the bulk of the inventory are items that were preowned and lightly used. All inventory is sorted and inspected for usability and any breakage or signs of wear and tear before being placed into inventory.

24 Hour Stop n’ Shop

Although the 24 Hour Stop n’ Shop is primarily attached to a gas station in West Houston, the convenience store has expanded to include a wide variety of consignment items for sale and has proven to be very popular with customers who arrive to purchase gas and stay to peruse the racks of consignment items. Included in the store are household items, decor items, children’s toys, gardening and outdoor items, and kitchen utensils and linens. Some items are sold new as overstocks, while 95% of the items offered are lightly used. Mary and Harry Ragan own the 24 Hour Stop n’ Shop and have used the store as a means to offload many of their family collectibles and items no longer needed from their former ranch. The Ragans have build a sizable customer base and plan to expand the business to include prepared food items, including snacks and packaged meals, to complement the consignment shop and the convenience store items already in stock.

Competitive Advantage

Casual Consignment will be able to offer the following advantages over their competition:

• Inventory changes regularly on a one-month rotation to refresh customer choices and clothing availability

Marketing Plan

Brand & value proposition.

Casual Consignment will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who offer both excellent prices and assistance in service to customers.
• A comprehensive, curated selection of cleaned clothing for customers
• Affordable pricing on clothing that is sustainable and usable, saving the environment in the process

Promotions Strategy

The promotions strategy for Casual Consignment is as follows:

Word of Mouth/Referrals

Casual Consignment has built up an extensive list of contacts over the years by providing exceptional service and expertise to former clients. The contacts and clients will follow the employees to their new company and help spread the word of Casual Consignment.

Professional Associations and Networking

Retail associations will be joined and networking will be a priority during the first years of business in Houston. There are competitors, both direct and indirect, and the possibility exists for collaboration via associations.

Print Advertising

A direct mail piece will be sent to every Houston household offering a significant discount on clothing purchased during the first 90 days of business. This offer will be made to incentivize new customers to find and continue returning to the Casual Consignment Shop.

Website/SEO Marketing

Casual Consignment will fully utilize their website. The website will be well organized, informative, and list all the product types and services that Casual Consignment provides. The website will also list their contact information and list their holiday special inventory items, along with monthly discounts. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “consignment company” or “clothing resale near me,” Casual Consignment will be listed at the top of the search results.

The pricing of Casual Consignment will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for Casual Consignment. Operation Functions:

• Terri Cooper will be the owner and president of the company. She will oversee all staff and manage client relations. Terri has spent the past year recruiting the following staff:
• Cary Brown will become the store manager and help oversee the store and take on operational duties.Cary Brown worked alongside Terri Cooper for five years after graduating from Houston Lyons High School.
• Manny Jaurez, also a former retail associate, will become the general maintenance man and assistant in stocking and inventory.

Milestones:

Casual Consignment will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease store space
• 5/15/202X – Finalize personnel and staff employment contracts for Casual Consignment
• 6/1/202X – Finalize contracts for Casual Consignment vendors
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into Casual Consignment store
• 7/1/202X – Casual Consignment opens its doors for business

Financial Plan

Key revenue & costs.

The revenue drivers for Casual Consignment are the clothing fees they will charge to customers for their inventory items.

The cost drivers will be the overhead costs required in order to staff Casual Consignment. The expenses will be the payroll cost, rent, utilities, shop supplies, and marketing materials.

Funding Requirements and Use of Funds

Casual Consignment is seeking $200,000 in debt financing to launch its consignment store. The funding will be dedicated toward securing the store space and purchasing equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Customers Per Month: 400
• Average Revenue per Month: $48,500
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, consignment store business plan faqs, what is a consignment store business plan.

A consignment store business plan is a plan to start and/or grow your consignment store business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Consignment Store business plan using our Consignment Store Business Plan Template here .

What are the Main Types of Consignment Store Businesses?

There are a number of different kinds of consignment store businesses, some examples include: Clothing, Books, Music and Movies, and Furniture.

How Do You Get Funding for Your Consignment Store Business Plan?

Consignment Store businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Consignment Store Business?

Starting a consignment store business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster. 1. Develop A Consignment Store Business Plan - The first step in starting a business is to create a detailed consignment store business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your consignment store business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your consignment store business is in compliance with local laws. 3. Register Your Consignment Store Business - Once you have chosen a legal structure, the next step is to register your consignment store business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 4. Identify Financing Options - It’s likely that you’ll need some capital to start your consignment store business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 7. Acquire Necessary Consignment Store Equipment & Supplies - In order to start your consignment store business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your consignment store business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Starting a Business | How To

How to Start a Consignment Shop in 9 Steps

Published January 12, 2022

Published Jan 12, 2022

WRITTEN BY: Meaghan Brophy

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This article is part of a larger series on Starting a Business .

Starting A Business?

• 1 Choose the Right Type of Consignment Shop
• 2 Create Your Budget
• 3 Create a Business Plan
• 4 Select a Storefront
• 5 Acquire Merchandise
• 6 Design & Outfit Your Store
• 7 Advertise
• 8 Hire & Train Employees
• 9 Plan & Launch Your Grand Opening
• 10 How to Start a Consignment Shop FAQs
• 11 Bottom Line

To start a consignment shop, as with any business , you’ll need a prime storefront and a strategy for acquiring customers and merchandise. It involves choosing a niche, establishing a budget and business plan, finding merchandise and laying out your store, advertising, staffing up, and, finally, opening to the public.

Starting a consignment store can cost up to $10,000, according to a commonly reported figure from Entrepreneur, with average salaries for consignment shop owners ranging from $40,000 to $60,000. Here’s how to start a consignment shop―as a brick-and-mortar store―in nine steps.

1. Choose the Right Type of Consignment Shop

If you’re wondering how to start a consignment shop, the first step is to narrow down exactly what kind of store you want to open . The most successful stores cater to a specific audience and have a specialty or focus area that helps them stand out from other online or offline retail competitors. To make the most money with your new business, choose a product area that is in high demand and/or hard to find, to lure shoppers into your store.

Designer & Luxury Goods

The secondhand luxury and designer goods market was worth an estimated 33 billion euros in 2020 (about $37 billion), a figure expected to continue to rise. These are popular items because shoppers can purchase products that may otherwise be outside their budgets. People looking to get rid of gently worn designer products often opt to sell them to a consignment store rather than donating to get a partial return on their investment.

Popular designer goods to sell include watches, jewelry, sneakers and other footwear, handbags, wallets, jewelry, and apparel.

The apparel resale market will hit $77 billion in the next five years , according to ThredUP.

LXR is an online consignment shop for luxury and designer handbags and accessories. The store focuses exclusively on authentic designer label goods. It also purchases used goods to sell on its site.

Apparel & Footwear

Clothing and shoes are popular secondhand items, even if they’re not expensive designer-label. More than three-quarters of people who’ve never done it would consider selling secondhand clothes. They’re relatively easy to source—more than 95% of the 36 billion tossed clothing items each year could be salvaged—and they’re items for which there will always be demand.

In fact, clothing is the most-purchased secondhand good . And as much as 7% of the average person’s wardrobe consisted of used items in 2019, a figure expected to hit 17% in 2029.

The largest target market for this type of consignment shop are Gen Z women, according to ThredUP. So keep those styles and trends in mind if you’re going after that audience.

Omnia is an excellent secondhand apparel and accessories shop to check out for inspiration. It sells a carefully curated selection of used vintage goods.

Secondhand books are another popular consignment category. In addition to regular paperbacks and hardcover books, some used bookstores deal in rare books, such as antiques and signed copies, or specialty books like cookbooks and textbooks.

Popular websites like ThriftBooks and Better World Books are examples of online retailers that have found success swelling used books. Puerto Rico-based El Coquí Bookstore sells used books in-store only—shoppers have to visit the shop and explore the wide array of books in a variety of languages.

Children’s Wear

Clothing for children and babies is a popular and profitable type of consignment store. Since parents have to purchase clothes for growing children very often, many turn to secondhand stores as an affordable option. Plus, you’ll have a steady supply of parents looking to sell their children’s gently used clothes.

Once Upon A Child is an example of a secondhand shop that sells both children’s clothing and toys. The brand operates several retail shops as well as a full online presence.

Online Consignment Shop

During the past several years, online consignment stores have become very popular, especially for apparel and accessories. Starting an online consignment shop gives you a wider customer base than a local store.

Check out these resources to help you learn how to start selling online:

• How to Start an Online Store
• Best Ecommerce Platforms
• How to Set up Click and Collect

One key thing to remember when starting an online consignment shop is that you’ll need to photograph each item individually. This can be time-consuming, so it’s important to weigh how much time it’ll take you against the opportunity for profit.

Pop-up Consignment Shop

If you’re not ready to commit to a full-time storefront, having a pop-up business is a great way to test products and locations before diving in. If you’re looking to start a consignment business as a part-time venture or side gig, having temporary stores is a good option as well.

Pop-up shops come with less commitment, so they’re a great way to get into retail without all the overhead of running a permanent storefront. This is exactly the approach that Grapevine Events takes with their secondhand goods pop-up shops. As a result, they’re also able to offer higher rates to consignors.

2. Create Your Consignment Shop’s Budget

Once you know what kind of store you want to open, the next step in how to start a consignment shop is setting a budget for your store . To set your budget, first consider your current income and savings. What can you save and set aside for your new business venture? How much outside funding will you be able to get from personal loans, business loans, business credit cards, and so on? Opening a consignment business requires a lot of upfront cash. Once you’re open, it will take time to build your sales volume.

Next, estimate your expenses for opening your store. Include how much you can spend on a storefront, outfitting the inside of your store, signs, and marketing, and your initial product purchase.

Now, estimate your monthly expenses for once you open. Include set bills like rent, phones, internet, payment processing, and so on. Also factor in advertising budgets, employee salaries, merchandise purchase orders, and other store supplies.

The hardest part of setting a budget for a business that is not yet open is predicting your monthly sales volume. This is especially hard for apparel and retail businesses as sales can fluctuate drastically, depending on the season, holiday, weather, economy, and consumer confidence. According to the Retail Owners Institute , used merchandise retailers had an average inventory turnover rate of 4.1 in 2021. That means they sold through and replaced all of their inventory about four times throughout the year.

Keep that number and your total inventory value in mind when estimating your monthly sales. Err on the side of caution, and plan for lower sales when you open, so that you have enough cash flow to cover expenses. Subtract your estimated monthly expenses from your estimated monthly sales, and that will give you an approximate monthly cash flow for when you open.

Pro tip : Retail is an extremely seasonal business. Most retail businesses bring in a ton of money around Christmas and the winter holidays. There are also spikes in revenue around back to school shopping, and spring holidays such as Mother’s Day and Father’s Day. Your monthly sales can vary, so always have extra cash on hand to cover slower months.

3. Create a Business Plan for Your Consignment Shop

Once you figure out what kind of consignment business you’d like to open, you’ll need a solid business plan to piece together all your ideas and form a strategy for making your store profitable. If you’re seeking outside or startup funding such as a bank loan, your business plan will be evaluated during the approval process.

Here are the nine elements found in a typical business plan :

• Executive summary : An introductory paragraph outlining your consignment shop’s purpose, mission, and why it will be successful.
• Business description : Describe what need or market hole your consignment store is filling in the community, who your customers will be, and the talent on your team.
• Market analysis : Write an overall outlook on the consignment and resale industry including trends, what successful competitors are doing, and what your strengths will be.
• Organization and management : Outline who will be running your business and the experience your team members have in retail, consignment, or your store’s area of specialty.
• Product line : Outline what kinds of products you will sell, how you will sell them, and where your supply will come from. Include research on why you’re selecting those products, such as sales trend data.
• Marketing and sales : Describe your general marketing strategy and your plan for attracting and retaining customers.
• Funding requests : If you need outside funding, outline your needs and specify exactly how you will use the funds.
• Financial projections : Detail how your business will become stable and profitable, including a projected financial timeline of at least five years. If you are borrowing funds, include a plan on how you will be able to repay the loan.
• Appendix : Use this space for any supplemental documents, such as logo or branding designs, sketches of what your consignment shop will look like, credit histories, licenses, permits, etc.

When writing a business plan, use the format and software you’re most comfortable with. Many people use a traditional word processor like Microsoft Word or Google Docs. You can also create your business plan in a presentation format using PowerPoint or Google Slides. There are also business plan software programs that offer templates and guide you through the process.

Choose the Best Legal Structure

Choosing a legal structure for your consignment business is important because it dictates how you will collect and report taxes, your level of personal liability, and how you will get paid from your business. There are many types of legal structures, but the three most commonly found in retail are sole proprietorships, limited liability companies (LLCs), and corporations .

• Sole Proprietorship
• Limited Liability Company
• Corporation or C-corp

If you don’t set up a legal structure for your business, this is the default. Operating under a sole proprietorship essentially means you’re doing business as an individual and, therefore, are not separated from your business in any way. Sole proprietorships are popular options for freelancers, business consultants, and other individuals conducting low-risk and low-visibility work by themselves.

With sole proprietorships, your business revenue is considered personal income. This means you will pay sole proprietorship taxes based on your personal income bracket. While you are subject to self-employment taxes, you do not have to pay any corporate taxes, which is a plus.

However, sole proprietorships also come with greater risk because you and your business are one and the same. Your personal assets, such as your house and car, are at risk if there is any kind of lawsuit against your business or if you declare bankruptcy.

LLCs are legal structures for small businesses that protect your personal assets, such as your house and car, in the case of lawsuits or business bankruptcy. This is the most popular legal structure for small retail businesses and the one we recommend if you are planning on maintaining a single consignment storefront.

If you’re the single owner of the LLC , you’ll likely still pay taxes the same way you would as a sole proprietorship but with the benefit of personal assets protection from liability. However, many states have separate LLC taxes, which may make it more expensive than operating as a sole proprietor. It’s always best to check with your local regulations.

To form an LLC, you need to choose an official name and file paperwork to establish your company, whereas a sole proprietorship doesn’t require any paperwork. Luckily, the paperwork isn’t overly extensive and can be filed easily in a few steps using a tool like LegalZoom .

Corporations are the most structured legal form for your consignment business. They have strict tax guidelines. When you create a corporation, it’s a completely new and separate entity in the eyes of the government and the IRS.

Corporations are an ideal structure for consignment businesses that want to expand into multiple storefronts, become a public company, or want to secure a lot of outside funding. Corporations provide you the most personal liability protection out of the three legal structures. However, you will need to pay federal corporate tax on top of personal income tax. Corporations are also expensive to form and require you to keep detailed business records.

Organize Your Finances

No matter which legal structure you choose, getting your finances in order is a crucial step. This involves opening a business checking account to separate your personal and business finances right from the beginning. Having two separate accounts makes it easier to monitor your business’ cash flow and track expenses accurately and will make the process of filing taxes much easier.

Chase is a great banking solution for retailers because it offers small business checking, business credit cards, and merchant services―payment processing―so business owners can manage all their cash flow in one place. Plus, Chase offers competitive rates and great customer service. Contact Chase to learn more about its small business retail solutions.

Learn more about the best small business checking accounts .

4. Select a Storefront

Choosing a storefront is a critical step that needs to be considered carefully. The location you select can all but make or break your business. The decision can seem overwhelming. So, start by narrowing down a geographic location. You’ll be spending long hours at your consignment shop nearly every day when you first open. Think about how far you are realistically willing to commute and choose areas that are accessible from your home easily.

Spend time in each area to become familiar with specific neighborhood demographics and preferences and scope out other local businesses. There are many factors that go into choosing the right location for your business, but it all comes down to picking the location that will attract the most customers.

Choose a storefront that gets a lot of foot traffic for increased sales and visibility.

Determining foot traffic can help you figure out how many walk-in customers you can expect in each location. In addition to staking out your prospective storefront locations, ask other local business owners questions about the traffic, shopper demographics, and neighborhood.

Additionally, consider details such as parking and signage. A Main Street location is ideal, but only if your customers can park near your store easily. Likewise, you’ll want a location that allows for a big storefront sign. Some locations have strict rules about the sizes and types of signage they allow.

Used clothing store Buffalo Exchange has several locations across the US. Many of the stores have been strategically placed in college towns where they have a steady stream of supply and demand from students. (Source: Buffalo Exchange)

5. Acquire Merchandise

Finding merchandise to sell at your consignment shop is trickier than sourcing products for traditional retailers . You’ll want to have a buying strategy in place before you open to ensure a steady stream of products to sell. You’ll probably use a combination of tactics to keep your store stocked.

Popular secondhand product sourcing strategies include:

• Joining the Association of Resale Professionals (NARTS) : This professional organization connects resale buyers with suppliers through its directory.
• Advertising to potential consigners : Advertise in print and online (on social media too!) regularly that you’re purchasing gently used items. Many of your potential shoppers could also be suppliers.
• Purchasing from flea and thrift shops : You can find some great deals on products to sell in your store by searching through flea markets and other thrift stores.
• Finding an off-price supplier : Off-price products aren’t secondhand, but they’re deeply discounted products that are either overstock or slightly damaged. You can find them through trade shows.

6. Design & Outfit Your Consignment Store

After securing a storefront and finding product sources, it’s time to start strategically planning your store layout . Your store layout has a dramatic impact on in-store sales. A well-designed layout will welcome shoppers, make them feel comfortable, and direct them toward specific products.

The first thing you need to decide is what type of floor plan you want. Most retail stores fit into one of three basic layout categories:

• Loop or racetrack : Best for specialty stores, showrooms, and retailers that want to lead shoppers on a specific path throughout the store.
• Grid or straight : This floor plan is exactly what you would expect: straight, angular aisles that are typically found in grocery and box stores. A consignment bookstore may also follow this model.
• Free flow plan : This is a popular plan for boutiques and allows for lots of creativity in the design process. Most apparel or decor consignment shops will follow this model.

Finally, you will need to position your checkout counter. A well-positioned checkout will open up floor space for displaying products and encourage shoppers to move through more of your store. As a rule of thumb, try to position your checkout on the left-hand side of your store.

Shoppers naturally veer toward the right side of a store, so that’s where you want to display your best products. Some department stores and larger mall retailers place their checkout counters at the back of the store. However, for smaller retailers, placing your checkout toward the front makes it easier for staff to attend the register and keep an eye on the entrance.

Select a POS System

Point-of-sale (POS) systems are cloud-based software programs that replace traditional cash registers and offer additional tools such as inventory management, sales reports, and customer data and marketing. Your POS system is the central hub for your business where you process all transactions. Look for a system that has all the features you need, including payment processing, for an affordable rate.

Lightspeed Retail POS simplifies the process of running a retail store. (Source: Lightspeed Retail)

Some of the criteria we use to evaluate the best POS systems include:

• Price : Most POS software programs charge a monthly fee, and some also charge extra for certain features.
• Ease of use : Test out each POS with a free demo or trial to make sure the interface is easy to navigate, and also read user reviews.
• Customer management tools : Almost all POS systems have a customer directory feature but, otherwise, they vary greatly in what loyalty, marketing, and customer feedback features are included.
• Sales reports : Each type of POS solution will have some kind of reporting tools, but some offer more details and features to create custom reports.

For brick-and-mortar stores, we often recommend Lightspeed. It’s a small business POS with big-business functionality such as custom report builders, detailed inventory tracking, a loyalty program, and built-in payment processing. Plus, it has built-in capabilities to handle consignment products. Visit Lightspeed for a 14-day free trial.

Visit Lightspeed

7. Advertise Your Consignment Shop

Before opening your consignment shop, you’ll need to start advertising and marketing your retail shop . Because you’re on a budget, make sure your strategy is effective by choosing a combination of online and offline marketing efforts.

• Social Media
• Search Engine Optimization (SEO)

In order for customers to find your business, you’ll want to have a website. Creating your own website from scratch can be easy with the right tools. There are many easy ways to make a business website for little or no cost. You need a registered domain and a web hosting service.

Olive My Stuff, a consignment shop in Connecticut, has a professional website with information on shopping and consigning.

Create social media accounts on channels like Facebook, Instagram, and TikTok to promote your brand and consignment items. You can even sell your secondhand goods on Facebook as well as sell them on Instagram directly. Run paid social ads targeting people who fit your target market in your local area.

Focusing on your SEO strategy is an excellent way to put your consignment shop in front of people who may not have otherwise heard about you. Local SEO , in particular, can help you increase your visibility for local searches. This is an excellent marketing tactic because users searching for “consignment shop near me” are likely high intent.

• Store Signage
• Window Displays
• Customer Loyalty Program

The storefront signage is the first impression shoppers will get from the in-person experience with your consignment shop. Make sure the sign is easily visible and easy to read, while also being reflective of your brand. You want to stand out enough to make passersby curious about what’s inside, especially if you plan to rely heavily on foot traffic. Check out these business sign ideas for inspiration.

While your signage might make the first impression, your window displays have the potential to make the biggest impact. A well-designed storefront with captivating window displays can lure even the most hesitant shoppers into your consignment store. Here are some resources to help you get started:

• Create a Stunning Store Window Display
• Visual Merchandising Techniques

Once your consignment shop is up and running, loyalty programs are a great way to encourage repeat customers and higher transaction amounts. Simple punch cards can be effective. However, using a loyalty program that’s tied in with your POS system offers deeper insights like who is using the program and how effective it is. Lightspeed  offers a sophisticated loyalty program that you can add onto Lightspeed POS for a monthly fee.

8. Hire & Train Employees

Last but certainly not least, before opening your store to the public you need to bring on a stellar group of employees to serve as the front lines of your business. If you haven’t hired an employee before, navigating the process can be intimidating. Follow a new hire checklist that outlines all of the gritty steps you need to take such as obtaining an employer identification number (EIN), registering for state and local taxes, and so on.

As a consignment store owner, it’s likely you won’t have a dedicated human resources (HR) team member. Using an affordable solution like Homebase can save you plenty of time and stress by simplifying hiring, employee scheduling, time tracking, and payroll.

Visit Homebase

Training Your Employees

You’ll want your consignment store staff ready to provide top-notch customer service from the moment you open your business. Providing great customer service is a skill that requires practice. If you don’t start training your employees before you open, they’ll be practicing their service skills on your customers.

Instead, hold a weeklong training boot camp before you open. In addition to running through customer service scenarios and role-playing, teach employees about store policies and procedures, the items you’re selling, and any other pertinent information.

9. Plan & Launch Your Grand Opening

Hosting a grand opening celebration is a great way to kick off your new business venture while also gaining some press coverage. To have maximum attendance, recruit friends and family, draft a press release for local media and surrounding businesses, make a Facebook event, notify your local Chamber of Commerce, and take an advertisement out in the local paper.

“One mistake a lot of companies make is staying under the radar until launch. If no one knows what you’re doing and when you’re opening, then you have zero chance of making any sales. Start building some excitement at least six weeks before your launch. Get active on social channels. Interact with likely customers and get the conversation started. Build anticipation with enticing photos, and maybe even incentivize purchases in those early days.” ― Deanna Thompson, Blogger, Closet Full of Cash

Plan a grand opening to celebrate the launch of your new business.

How to Start a Consignment Shop Frequently Asked Questions (FAQs)

Opening and running a consignment shop can be a tricky business.

What is a consignment shop?

A consignment shop is a store that sells secondhand items, typically clothing and accessories. Consignment stores purchase gently used goods and resell them at a markup to make a profit.

How does a consignment shop work?

As the owner of the consignment shop, you will purchase secondhand goods from customers, professional suppliers, flea market vendors, and so on, and own those items until they are resold in your store for a higher price.

How much does it cost to open a consignment store?

The exact price can vary a lot depending on your location and local real estate prices. However, opening a consignment store will cost roughly $10,000.

Why do consignment stores fail?

Part of learning how to start a consignment shop is figuring out what not to do. There are many reasons a consignment shop could fail. Common reasons include choosing the wrong storefront location, not having in-demand products, too-small profit margins, and insufficient marketing.

Bottom Line

Consignment shops are a great business idea for making money in 2022. More than 20,000 US-based used merchandise stores have a combined annual revenue of $17.6 billion , according to First Research. And these numbers continue to grow, especially as the world becomes more aware of the environmental challenges consumerism brings.

Starting a consignment shop is an excellent way to promote sustainable consumerism while also making a profit. And with the market growing the way it is, there’s plenty of opportunity for consignment shops of all kinds. There’s never been a better time to start a consignment business of your own.

About the Author

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Meaghan Brophy

Meaghan Brophy is a Retail Expert at Fit Small Business focusing on small business retail and ecommerce content. Meaghan’s 10+ years of retail experience includes working at local book and dance supply stores, handcrafting gifts at an eco-friendly manufacturer, developing private label brands, and managing a team of more than 40 sales and service professionals at a local spa.

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How to Start a Consignment Store

A consignment store sells goods for consignors – people who pay a fee to a store owner to sell their goods. Consignment stores may have niche items or may contain everything from kitchenware to clothing. Though starting a consignment store may sound easy, it takes a great deal of knowledge and money to start such a business. Creating a business plan before diving into starting a consignment shop will help ensure that you stick to guidelines and budgets in order to minimize the riskiness of your new business venture. It is important to know where you will be getting your inventory from. Unlike a regular retail store, you will not be able to get your inventory from popular retail suppliers. Your inventory will be coming from individuals who are trying to sell your products. Before agreeing to stock a certain item, you must be sure that you are likely to be able to sell the item for a large enough profit. Being able to negotiate favorable terms with consignors is an essential skill to have.

Learn how to start your own Consignment Store and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a consignment store by following these 10 steps:

• Plan your Consignment Store
• Form your Consignment Store into a Legal Entity
• Register your Consignment Store for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Consignment Store
• Get the Necessary Permits & Licenses for your Consignment Store
• Get Consignment Store Insurance
• Define your Consignment Store Brand
• Create your Consignment Store Website
• Set up your Business Phone System

We have put together this simple guide to starting your consignment store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Consignment Store Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your consignment store?

Business name generator, what are the costs involved in opening a consignment store.

Some of the costs involved in opening consignment stores are yearly, some may be monthly, and some may be weekly or even daily. Costs may include:

• Permits and licenses for local, county and state, including certificate of occupancy and a sales tax certificate. If you sell soda and water at your store, even via a soda machine, you may have to have a permit for that.
• The cost of the building, whether you purchase it or rent it.
• The cost of revamping the interior and/or exterior of the building, if applicable.
• Counters, shelving and other display units.
• Marketing to buyers and consignors.
• Office supplies.
• Point of sale system.
• Security system.

What are the ongoing expenses for a consignment store?

Ongoing expenses may include utilities, rent or mortgage, permits and licenses, payroll if you have employees, office supplies, and taxes. Taxes may include state, local, federal and sales tax. Of course, you need to pay the consignor his or her share of the item that sold.

Who is the target market?

A consignment store has two types of clients: consignors and buyers. Consignors are usually those who want to sell items they no longer need. Buyers are those looking for a deal on an item that might be out of their reach if they were to buy it new.

How does a consignment store make money?

A consignment store makes money by selling consignor's goods. The store may charge an upfront fee to show items, take a fixed percentage of each sale, or it may do both.

How much you charge depends on your product. In most cases, the items you have are used, so you will only be able to get so much for those items. Don't forget the amount you have to pay the consignor. That price needs to be agreed upon prior to you accepting the item. Consignment shops take between 25 percent to 60 percent of what the item sells for. Thus, if a person consigns a cocktail dress for $500, the consignment shop owner would get up to 60 percent of that cost, depending on what your agreement with the consignor is.

How much profit can a consignment store make?

Consignment stores generally charge from 25 percent to 60 percent of the sales price of a sold item.

How can you make your business more profitable?

Make your business more profitable by:

• Helping your consignors properly price their items. For example, you wouldn't take in a bicycle that is worth $20 and try to sell it for $50, or it will just sit in the store.
• Choose a fee that most people in your neighborhood will pay. Those in higher scale neighborhoods might be willing to pay up to 60 percent for a consignment fee, while other neighborhoods may pass by your store if the consignment fee is over 30 percent.
• Don't skimp on advertising. Advertise to consignors and buyers alike.

By keeping prices within reason and advertising to obtain new inventory and new buyers, you should be able to make a highly profitable consignment store.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your consignment store is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a consignment store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Certificate of Occupancy

A consignment store is usually run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease office space :
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a consignment store.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
• If you plan to purchase or build office space :
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for you business’ location to ensure your consignment store will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Consignment Store needs and how much it will cost you by reading our guide Business Insurance for Consignment Store.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a consignment store

Promoting your consignment store business is second only to customer service. Use social media, send out fliers, and advertise on television if possible. When you do open, hold a grand opening to entice customers and consignors to come in and see your store. Word of mouth travels fast, whether it's good or bad, so keep that in mind while you are working with customers and consignors.

How to keep customers coming back

As part of your business plan, you should have researched the type of product that would do well, and whether you would set up as a niche boutique or start out with something less difficult to market. A niche boutique for a consignment shop can specialize things like selling sports equipment, dance equipment, hardware, etc. Attract customers by designing window scenes, offering discounts, or even holding a contest to win a product. Retain customers by treating them right. Regardless of what you chose and the caliber of customer, treat all of them like they are the richest and nicest person in the world.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

A consignment store owner needs to know his or her limitations and must also do well with dealing with people. It is essential that you are able to negotiate business terms, as you will be working with consignors in addition to your customers. If you are not able to negotiate terms with consignors that will allow you to make a large profit off of selling their items, then you will not be able to cover your operating costs or make a profit.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a consignment store?

The owner of a consignment store has several duties to do, some every day and some a few times a week, including:

• Cleaning the store
• Straightening out inventory
• Marketing the store via mail, e-mail, social media and other outlets
• Locating new consignors
• Customer service
• Paying bills
• Ordering office supplies, bags and other inventory needed to conduct business
• Closing out sales
• Notifying current consignors of sales and the need for new product
• Paying consignors

What are some skills and experiences that will help you build a successful consignment store?

You'll need a myriad of skills to build a successful business, or you'll need to have the means to hire and pay people who have those skills. Consignment store business skills include:

• Sales and marketing
• Inventory management
• Money management
• Employee management

What is the growth potential for a consignment store?

In the ideal location, a consignment store could show extensive growth as long as the city has many people who want to put their items on consignment and you have buyers that are willing to purchase those items. In certain areas, clothing may sell better than furniture, while in other areas, you may do well with non-clothing items, such as furniture and other home and garden items.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a consignment store?

The most important part of starting any business is to create a business plan and to research the neighborhood. To jump start a consignment store business, you should also:

• Make sure you can fill your shelves before you open the doors.
• Ensure that you have enough inventory to rotate through as you sell more, and that you have consignors lined up to sell their products.
• Make sure your inventory is what those in your neighborhood are looking for.
• Create an attractive store.
• Keep smaller items near the cash register to encourage impulse purchases.
• Partner with local businesses to drive sales to them while they drive sales to you.

How and when to build a team

When customer service starts pulling you away from completing administrative tasks, such as paying consignors, taking inventory, pricing goods, and accounting; or when customers are consistently waiting for you to finish with another customer, it's time to get some help in the store. If a customer has to wait, he or she may not come back to your store.

Read our consignment store hiring guide to learn about the different roles a consignment store typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Useful Links

Truic resources.

• TRUiC's Consignment Store Hiring Guide

Industry Opportunities

• Just Between Friends Franchise Opportunity
• Kid to Kid Franchise Opportunity
• Association of Resale Professionals

Real World Examples

• Ann Arbor Business
• NYC Business
• San Diego Business

Further Reading

• Tips for Starting a Consignment Business

Have a Question? Leave a Comment!

ZenBusinessPlans

Home » Sample Business Plans » Wholesale & Retail

How to Write a Consignment Shop Business Plan [Sample Template]

Are you about starting a consignment shop? If YES, here is a complete sample consignment shop business plan template & feasibility report you can use for FREE . A Consignment Shop is a name given to a business where fairly used or second hand goods are sold. A consignment shop is a business you can start with little or no money because you just needs goods from individuals who do not need them and then sell to people that need them at giveaway price.

Just as we already know, fairly used products are highly affordable and far cheaper than brand new items, which is why the consignment sector of the retail industry will continue to flourish. It is also important to note that the consignment sector is not capital intensive. Thus business is a business you can do from the comfort of your home and earn a substantial income.

A Sample Consignment Shop Business Plan Template

1. industry overview.

The consignment sector of the retail industry has been able to capitalize on the recession, but its performance has suffered with the recovering economy. Also the rising unemployment rates have instigated or cause a drastic decreasing in per capita disposable income levels, moving consumers to reduce their discretionary spending.

It also moved many consumers who customarily shopped at department stores to turn towards the sector to buy cheaper used goods instead of new products. But it has been estimated that that the sector revenue will fall alongside general macroeconomic improvements.

Within the next five years, the sector revenue is expected to increase at a slower pace than the previous five-year period, largely as a result of rising disposable income and competition levels. The consignment shop sector is believed to be in the mature stage of its economic life cycle.

Industry value added (IVA), which calculates an industry’s contribution to the overall economy, is expected to rise at an annualized rate of 2.6% during the 10 years to 2022. The demand in this sector is driven by Demographics, consumer income, and consumer tastes.

The success of individual companies rests on efficient procurement and effective merchandising. Bigger businesses in the sector have advantages due to large marketing and finance, but little businesses can compete effectively by giving specialty products, serving a local market, or providing superior customer service. The US industry is fragmented: the 50 largest US companies account for about 30% of sales.

2. Executive Summary

Soccer Shops is a new sports consignment business in Honolulu, Hawaii. This business was founded and will be managed by Richard Craig, a retired footballer and presently the attacking coach with FC Hawaii. Just as you might have guessed, Richard is a well exposed footballer and an expert in the sports business. He understands the industry and best way to approach situations.

We at Soccer shops hope to capitalize on the vast opportunity and expertise of Richard Craig to dominate the market, which may include selection of used goods not replicated in the city, superior customer service, and reasonable prices.

We have been able to secure a suitable location that offers very good foot traffic, easy accessibility, and good road networking. We hope to work very hard to establish a business that will be the leading figure in the industry and also satisfying our customers need and demands.

Our Objective at Soccer ship is to establish a retail store whose primary goal is to surpass customer’s expectations, establish a business that will increase the number of clients served by at least 20% per year through superior performance and selection and to reduce drastically its dependence on non-renewable resources through the use of reused goods.

3. Our Products and Services

The fact that starting a consignment business can be very simple needs little or no up capital, requires no technical skills and it is a profitable venture makes it one of the businesses that a lot of people would want to start hence the high level of competition in the industry.

This is exactly why we at Soccer shop are very careful and zealous, so as not to start losing even before we open our doors. We hope to sell a vast range of sports and outdoors gears. We hope to add more items as we grow.

• Fleece outerwear.
• Rain gear, waterproof as well as coated nylon.
• Thermal underwear.
• Synthetic clothing for sports or travel
• Sleeping bags.
• Sleeping pads
• Duffel bags
• Cookware and stoves, and much more

4. Our Mission and Vision Statement

• Our vision at Soccer shop is to build a standard one stop consignment shop in Honolulu, Hawaii – a business that will serve the needs of the people of Hawaii and surrounding states.
• Our mission at Soccer ship is to give our customers quality sports and outdoor clothing and gear at affordable prices and rates.
• Our mind set is set to attract and retain our customers.
• We hope to stand by our vision and goals, and also provide services that will surpass that of our competitors.

Our Business Structure

SoccerShop just like we already said is a sports consignment shop owned and managed by Richard Craig. Richard Craig obtained business degree from the prestigious University of Hawaii. Richard Craig is also a retired seasoned footballer.

He started his football career with Honolulu galaxy futbol club before moving to Nottingham forest in England. He played in many A-list clubs which includes Portsmouth, Arsenal FC, Valencia FC in Spain, Lyon on France, before retiring in D. C United.

After a successful career that saw him win many trophies, he became a strong figure in the Hawaii football world. His presently the Attacking coach of FC Hawaii. His well known for his help in brings the football gears giants Adidas to Hawaii.

His also a sports analyst and also grew up managing his mum’s retail store. All these enormous experiences and many more not mentioned have instigated Richard Craig to believe he has the skills to manage and run Soccer Shop. We believe in his passion for success and his zeal to make Hawaii better and comfortable for its citizens.

We at Soccer shop are also interested in hiring individuals who are as experienced as Richard Craig to help us run our business. We hope to train them before bringing them into the business. We hope to train them on good customer approach, good communication skills and awesome customer service culture. We hope to start Soccer Shop with the following portfolios;

• Chief Executive Officer (Owner)
• Store Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants / Cashiers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO

• In charge of providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• In charge of fixing prices and signing business deals
• In charge of recruitment
• In charge of payment of salaries
• In charge of signing checks and documents on behalf of the company
• Evaluates the success of the organization

Store Overseer

• In charge of managing the daily activities in the ship
• Ensures that the store facility is in tip top shape and conducive enough to welcome customers
• Interfaces with third – party providers (vendors)
• Controls the sales floor inventory
• Ensures that goods and products are properly arranged
• Supervises the entire sales staff and workforce
• Any other duty as assigned by the CEO
• Takes care of vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of goods and products on our rack
• In charge of the purchase of goods and products for the organizations
• In charge of planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Ensures that the organization operates within stipulated budget.
• Takes care of external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyse the volumes of transactional data generated by customer purchases
• Takes care of the organization website
• Handles ecommerce aspect of the business
• In charge of installing and maintenance of computer software and hardware for the organization
• Manage logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Takes care of the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant / Cashier

• Receives payments on behalf of the organization
• Issues receipt to customers
• Prepares financial report at the end of every working week
• Handles all financial transaction on behalf of the company
• Interfaces with our bankers
• In charge of payment of tax, levies and utility bills
• Any other duty as assigned by the CEO / store manager
• In charge of cleaning the store facility at all times
• Ensures that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the store facility
• Any other duty as assigned by the restaurant manager,

6. SWOT Analysis

Our business plan we believe is not an ordinary document written to be kept in a drawer, but a plan that will tell us what to do and how to manage our business. This is the reason why we were very careful to conduct a SWOT Analysis.

We at Soccer shop are very much aware of the large quantity of retail stores in Honolulu even in the same location as us. This is also the reason why we are leaving no stone unturned to make sure that we establish a business that will take over the Industry.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Our SWOT Analysis was conducted by Access Business Consult. This firm is known to be the leading figure in business improvement and consulting. They did their job judiciously and they also worked with the available workforce we have at Soccer shop, before coming up with the SWOT Analysis that is summarized below;

According to our SWOT Analysis, our strength rests on our business location, our experienced workforce, and our standard Business model. Our SWOT Analysis went extra miles to discuss the possible competition we will be facing but noted that with our strength, we are heading for success without any barriers or whatsoever.

Our SWOT Analysis was quick to notice that our major weakness of the fact that we are a new consignment shop in the city of Honolulu, and it will take time for people to know what we offer and where we offer them. But we have designed our publicity and advertising strategies to be able to settle this problem once and for all.

• Opportunities

With the recovery of the economy from recession, people are trying to manage their funds. They believe that the economy might still decline and it is best if they plan the future by cutting down their expenses.

Our SWOT Analysis noted that the feeling to cut down expenses will keep growing the consignment shop sector. We believe that the opportunities available to us are enormous and we hope to take it within the proximity of the law of the united states.

Our SWOT Analysis also noted that our major threat will be the time it will take us to gather the exact workforce that we need to run Soccer Shop. It is believed that good hands are scarce on the market, but we believe that Richard Craig being a leader in the industry can be able to help sort out this issues and also instigate a proper marketing plan that will push Soccer Shop forward.

7. MARKET ANALYSIS

• Market Trend

It has been estimated that the retail sporting goods industry will rise with a CAGR of 3.4% over 2016-2022. It is believed that the main instigators of this growth in the retail sporting goods industry are increase in disposable income, governments promoting sports activities and encouraging sports participation, rising number of health-conscious people.

This rise we believe will encourage individuals to participate or choose more games or sports. And it is expected that many retailers will make use of the  social network to engage users and influence their merchandising decisions this year, but businesses are expected to go beyond that and use social not just to showcase products, but to actually sell them.

It is also expected that retailers will adopt marketing plan with tech innovations to decide how they can use them to aid the shopping experience. Innovation in this industry is expected to come from the technology part of the world. Cloud-based point of sale systems has proven that they can push old payment options out of the market with their performance, functionality, and looks.

And we believe that many retailers will recognize this and make the switch. Estimates and research has proven that about seven percent of consumers currently own wearable gadgets such as smart watches, glasses, and fitness monitors. But that figure is expected to triple in 2017.

This will move companies to become innovative on how to satisfy the urge of the world. The prices of these goods are also expected to be on the increase and not everyone can afford it, which in turn is an opportunity for us at Soccer shop.

8. Our Target Market

We will target and reach the people we know will benefit more when they use our brands. It is very important to note that the market for sports and outdoor clothing and gear consignment shop in Honolulu is wide open and ready for the taking. Honolulu Hawaii is the best community to push Soccer shop forward because it is the hub of sports activities.

From our extensive research, we have also found out there is no other consignment shop that offers the same products we hope to offer in Honolulu Hawaii. For this reason, we believe we can take over the industry and create a landmark that cannot be tampered with.

We at Soccer shop hope to target individuals that need sports and outdoor clothing and gear but cannot afford it due to financial constraints. It is an established fact that most sports and outdoor enthusiasts do not have unlimited financial resources but they value quality of life, and one part of their daily activities is free time in the outdoors.

Spending a substantial amount of time in the outdoors precludes being at the office making money concurrently. We believe this is even more common with the people living in Honolulu. People choose to settle in Honolulu and Hawaii entirely because of its serene environment and mountainous nature.

We believe that with a great population of sports and outdoor enthusiasts, particularly those who are willing to give up their financial gains for quality of life, we at Soccer shop have a large population base to offer our products and services. The presence of Honolulu galaxy futbol club, FC Hawaii, University of Hawaii, Honolulu city football club, Hawaii Youth Soccer Association clubs, and Hawaii Harlequins Rugby Football Club will serve as bonus to us.

Our competitive advantage

It is important to note that Honolulu has no sports and outdoor consignment shop, but there are two competitors in the whole of Hawaii that offer the same services like SoccerShop; although one is a consignment shop and the other is a normal sports retailer. Though they are miles away and in different smaller towns, we see them as competitors we need to take seriously.

Our main competition in Honolulu is the retail shops where individuals can buy brand new sports and outdoor clothing and gears. Another competition we are very aware of is the thrift stores that sell used clothing and equipment in Honolulu. These shops are very few in Honolulu, but we are considering every possible point in other not to make mistakes.

We at Soccer shop are very sure that our choice of used sports and outdoor clothing and gear cannot be replicated in the city. We know there are a lot of sports retailers in Honolulu, but none of them sell used sports and outdoor items. We at Soccer shop hope to offer superior, personalized customer service. Soccer shop is a used sports item shop but we intend to run it as a shop that offers brand new merchandise.

Even consignment shop retailers have expectations of high service. We are prepared to treat our prospective customers with very personalized service. We hope to create a standard database of our customers and purchasing history so when they enter the store the sales person will have very personal information about the customer. This we believe will make them feel special and inculcated into our business stream.

9. SALES AND MARKETING STRATEGY

• Sources of Income

There a whole lot of areas we are looking at making money from, this is since we are not a charity organization. Soccer Shop will be formed as a corporation in Hawaii, with our shop and warehouse in Honolulu. Soccer shop was formed as a consignment shops that sales sports and outdoor clothing and gears to the people of Hawaii.

We believe that our business model is well organised to fetch us incomes that will help us run the business successfully without hindrance. We hope to offer the following services to gain substantial income;

• Sleeping bags
• Cookware and stoves, and much more.

10. Sales Forecast

We at Soccer shop hope to use the first month to get the store prepared for business and within this period, we do not hope to take part in any sales activity. We hope to prepare our store, display counters which will be set up as will all of the racks. During that period, our dressing rooms will then be built. We hope to open our shop officially during our second month but we acknowledge that business will be slow.

We hope to build up inventory during the second month. We also hope to achieve this through advertising in the many different local outdoor magazines/ journals, as well as advertising at the University of Hawaii generally, as well as in all sports club and facility. From our fourth month we believe that our sales will be steady and rising. Listed below is an accurate sales forecast for Soccer shop;

• First Year-: $900,000
• Second Year-: $1,600,000
• Third Year-: $2, 500, 000
• Marketing Strategy and Sales Strategy

We will voraciously do marketing from the outset. We believe in the massive result that a diligent marketing drive can bring about and that is why we want to work our best. We at Soccer shop understand that managing a business requires that you to be sharp and focused when it comes to marketing your goods or services.

We hope to start promoting Soccer shop even before we open our doors for business; we hope to move individuals to bring their used goods to us for remodelling and selling.

We understand that having a vast range of inventory is very important in the industry and this can be achieved very well through a two prong approach. Our first advertisements at Soccer shop will be to announce our shop in local sports magazines/journals and requesting people to bring in their extra clothing and gear to sell.

The second phase of our advertising will be to contact sports manufacturers, retail outlets, and manufacturer representatives and alerting them to the option of selling their excess products at Soccer shop. Below are marketing strategies we hope to use at Soccer Shop;

• We hope to use Direct Marketing
• We will also Sponsor TV and Radio Programs
• We also plan to erect our Billboards in Strategic locations around Honolulu
• We plan to make use of sales Agents and sales reps
• We hope to leverage online Marketing (via your official website, social media platforms and blog et al)
• We will also use Referral Marketing to our advantage
• We will also engage in road show within the community where your consignment store is located.
• The we will list your business in local directory / yellow pages

11. Publicity and Advertising Strategy

No business does well without marketing and advertising. We know this and that is why we will leave no stone unturned in seeing to it that we get our products and services to be in the faces of people. We at Soccer shop understand how competitive the global consignment shop industry is, which is why we have devised ways to neatly used items at giveaway prices or remodel the once we get.

A Consignment ship just like any other business in the retailing industry needs constant promotion to get people to buy into the brand and we at Soccer shop are very ready to make people know that we exist. We hope to make use of the following strategies to promote Soccer shop;

• Place adverts on national TV stations, Radio Stations and Newspapers / Magazines
• Run our own special TV program
• Sponsor relevant community programs
• Leverage the internet and social media platforms like; Instagram, Facebook , Badoo, YouTube, Twitter et al
• Install our Bill Boards on strategic locations
• Engage in road show from time to time
• Distribute our fliers and handbills to targeted areas from time to time
• Send out introductory letters to households in and around our location
• Encourage the use of word of mouth especially from loyal customers
• Ensure that all our vehicles are branded with our company’s logo
• Ensure that all our employees wear our branded shirts during work hours

12. Our Pricing Strategy

We at Soccer shop understand how important pricing can be to a business especially in the retail industry. We also understand that the success we hope to achieve in terms of pricing rests on our bargaining power. Which is why our merchandise Manager will have to come together with the Chief Executive Officer to ascertain the price of our goods, and also the price of the inventories we purchase.

We also plan to inculcate all our expenses in our pricing in other maximize profits that will helps manage our business successfully.

We at Soccer shop plan to keep our prices below the average market price for all of our customers by keeping our overhead low and by collecting payment in advance from individuals who would want to book a product. We also hope to offer special discounted rates to all our customers at regular intervals to attract them to our business.

• Payment Options

We at Soccer shop are very much aware that the payment options we provide will serves as a factor that brings our business closer to the heart of the people, and we are very much prepared to make use of that extensively. We will be bringing payment options that are unique and will make the payment for the service we offer very easy for our customers.

We also hope to provide these services by partnering with a renowned bank in the country. Our bank account numbers will be made available on our website and promotional materials so that it will be easier for clients to make payments when necessary.

• Payment by via bank transfer
• Payment by POS
• Payment via online bank transfer
• Payment via check
• Payment via bank draft
• Payment via mobile money
• Payment with cash

13. Startup Expenditure (Budget)

We will do well to count our chickens even before they are hatch. This we know will enable us work hard at achieving our goals and dreams. It is a well noted fact that starting a consignment shop isn’t an easy task and can be dictated by a lot of facts.

Factors like the location you intend starting the business, the type of second hand goods you want to retail, the size of the consignment shop you want to open, and of course the state of the economy as at when you intend starting the business. Starting a consignment shop requires little or no capital.

SoccerShop will be the forerunner of the industry, which is why we are very careful to note all important facts. We hope to spend our start up capital in the following way;

• Office equipment and furniture – $18,000
• Cost for store equipment (cash register, security, ventilation, signage) – $19,000
• The cost for Start-up inventory – $250,000
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $49,000
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits – ( $2,500 ).
• Cost for Shop remodelling – $5,000.
• Cost for payment of rent for a shop for 12 month at $1.76 per square feet in the total amount of – $52,800.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $30,000
• Cost for hiring Business consultant – $2,500
• Marketing promotion and grand opening expenses – $94,000
• Legal expenses for obtaining licenses and permits as well as the accounting services totalling – $1,300.
• The Total Fee for Registering the Business in the United States of America – $750.
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of Launching a Website – $600
• Additional Expenditure (Business cards, Signage et al): $5,000

From our Analysis above, we need $534,450 to start SoccerShop. We are very much prepared to organise and manage our business to maximize profits and become the lead figure in the industry.

Generating Funding / Start up of Soccer shop

Starting up a business might be a challenge at first. This is why we have put plans in place on how to make sure that the funds needed for this business is generated. Soccer shop is a standard consignment shop that will sell only sports and outdoor clothing and gears.

This business was founded and will be managed by Richard Craig, a retired footballer and presently the attacking coach with FC Hawaii. The business will be financed by Richard Craig and his immediate family members. Which is why the generating of start up capital has been restricted to just Richard Craig.

Richard Craig has been able to raise $600,000 from his own personal savings as a seasoned footballer and many endorsements. Being the only one to raise the fund doesn’t mean that soccer shop will be managed like a bedroom business. The business will be run by professionals and every decision will be extensively discussed.

14. Sustainability and Expansion Strategy

It is the wish of all businesses to soar and then break even. This is exactly part of our aim too. And that is why we want to strive to make sure this comes to a pass. Our sales strategy at Soccer shop will rest on solid retailing techniques of proper display and proper lighting.

We plan to set up our store so that the floor space is divided up in thirds with the best sellers in the most accessible front third, and then the next best sellers in the second third, and so on. We believe this will help produce what we buttress at Soccer.

All our products will be tagged with bar code price labels, which will provide inventory control and also stop the adjustment of the prices by bad customers. We also plan to be rotating our unsold stock every 90 days. Which means that any item not sold within 90 days of purchase will be returned to its owner.

We at Soccer shop hope to get our inventories from different sources. We hope to get our inventory from individuals that believe that it is preferable to receive something for their goods rather than packing them up to a thrift store. These individuals might want something new and may decide to raise the fund by selling what they already have.

We also plan to get our inventory from manufacturers who might want to get rid of some of their inventory, maybe because the products are outdated. We will also get our inventory from manufacturers’ representatives that get a large number of samples from many different manufacturers and tend to pass them out when they no longer need them.

Checklist/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Conducting feasibility studies: Completed
• Leasing, renovating and equipping our facility: Completed
• Generating part of the start – up capital from the founder: Completed
• Applications for Loan from our Bankers: In Progress
• writing of business plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress

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Consignment Shop

Back to All Business Ideas

How to Start a Consignment Shop

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on May 31, 2022 Updated on May 7, 2024

Investment range

$2,550 - $13,100

Revenue potential

$156,000 - $468,000 p.a.

Time to build

0 – 3 months

Profit potential

$62,000 - $187,000 p.a.

Industry trend

It may be hard to believe, but second-hand clothing is one of the world’s fastest-growing industries. The market is expanding a stunning 25% each year, which means right now is a great time to start your own consignment shop and ride this train to success. 

But before you hang your “OPEN” sign, you’ll need to learn how to launch and run a business. Luckily, this step-by-step guide has you covered with all the information you’ll need to open your new consignment shop. 

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

In a nutshell, consignment shops get paid for selling other people’s stuff. People bring in unwanted shoes and clothing, antiques and household goods, and the shop sells them for an agreed-upon price and takes a commission, usually about 50%.

Still, starting a consignment shop has pros and cons to consider before deciding if it’s right for you.

• Business Model Options – Choose a physical or online consignment shop
• Good Margins – Pay nothing for inventory until it sells; get half the sale price
• Hot Market – Demand for vintage and second-hand clothing is rising
• Delayed Opening – Build up inventory before the store opens
• Crowded Market – A hot market means lots of competition

Consignment industry trends

Industry size and growth.

• Industry size and past growth – The global second-hand clothing industry is worth $119 billion, up 24% from 2021.(( https://www.thredup.com/resale/#size-and-impact ))
• Growth forecast – The global second-hand clothing industry is projected to nearly double by 2026 to reach $218 billion. 

Trends and challenges

Trends in the consignment shop industry include:

• Online clothing resale is the fastest-growing market segment, expected to quadruple by 2026.
• In 2021, 244 million US consumers said they were open to buying second-hand clothing.

Challenges in the consignment shop industry include:

• A growing number of players in the online consignment store market are creating greater competition.
• Generally only brand name clothing is sold in consignment shops, which means shop owners have to watch out for knock-offs. 

How much does it cost to start a consignment shop business?

Starting an online consignment shop will cost about $2,500. Your costs will be for a website and marketing costs. Starting a brick-and-mortar consignment shop will cost about $13,000.

How much can you earn from a consignment shop business?

Prices for consignment items will vary. Since you’ll be looking for high-end items to sell, these calculations will assume an average item price of $300, of which you’ll get 50%. If you’re running an online consignment store, your profit margin after marketing costs and paying the consignor will be about 40%. 

In your first year or two, you could sell 10 items a week, bringing in $156,000 in annual revenue. This would mean $62,000 in profit, assuming that 40% margin. As your website gets more traffic, sales could climb to 30 items a week. With annual revenue of $468,000, you’d make an outstanding profit of $187,000.

What barriers to entry are there?

The only barrier to entry for a consignment shop is the competition you’ll face.

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Step 2: hone your idea.

Now that you know what’s involved in starting a consignment shop, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research consignment shops in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a consignment store that sells furniture and household items.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as luxury brands or high-end accessories.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine the types of clothing and other products you’ll offer

You’ll need to determine if you want to specialize in clothing or some other type of merchandise. In addition to consignment items, you could also operate in part as a thrift store or online thrift store and sell donated items or items you find at garage sales. You could also have a retail store in your shop where you sell items that you’ve purchased wholesale. 

How much should you charge for consignment items?

Prices will vary based on the item and its retail price. For an online store, after the cost of paying consignors and marketing, you should aim for a profit margin of about 40%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be broad, so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook. 

Where? Choose your consignment shop location

Choosing the right location for your consignment shop is crucial for attracting customers and ensuring its success. Look for a spot in a high-traffic area with good visibility, such as a popular shopping district or a busy downtown area.

Consider accessibility and convenience, ensuring that the location is easily reachable by public transportation and has ample parking. Additionally, assess the local demographics and aim to select a location that caters to a wide range of customers. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Consignment Shop Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “consignment shop”, boosts SEO
• Name should allow for expansion, for ex: “Renewed Treasures” over “Sports Gear Consignment Shop”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Discover over 260 unique consignment shop name ideas here . If you want your business name to include specific keywords, you can also use our consignment shop business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Consignment Shop Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief overview of your consignment shop business, highlighting key points such as the business concept, goals, and potential for success.
• Business Overview: Detailed information about your consignment shop, including its mission, vision, location, legal structure, and any notable achievements or milestones.
• Product and Services: Description of the items your consignment shop will accept and sell, emphasizing the quality, uniqueness, and appeal of the products.
• Market Analysis: Examination of the target market for your consignment shop, including demographics, trends, and potential growth opportunities.
• Competitive Analysis: Evaluation of other consignment shops or similar businesses in the area, identifying strengths and weaknesses to position your shop effectively.
• Sales and Marketing: Strategies for promoting your consignment shop, attracting customers, and driving sales, encompassing both online and offline channels.
• Management Team: Introduction of key individuals involved in running the consignment shop, highlighting their expertise and roles.
• Operations Plan: Details on the day-to-day operations of your consignment shop, covering aspects such as inventory management, staffing, and customer service.
• Financial Plan: Projections and analyses of the financial aspects of your consignment shop, including startup costs, revenue forecasts, and break-even analysis.
• Appendix: Additional supporting documents, such as resumes of key team members, detailed market research data, and any other supplementary information relevant to the business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to consignment shops. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your consignment shop will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a consignment shop business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Consignment Shop Business Licenses and Permits

Starting a consignment shop business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your consignment shop business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as ConsignPro , resaleworld , or SimpleConsign , to manage your inventory, billing, and payments. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Here are some powerful marketing strategies for your future business:

• Website : Create a compelling website that showcases your latest finds, store events, and customer testimonials.
• Local SEO : Optimize your website to target local search terms related to consignment, thrift shopping, and sustainable fashion to increase online visibility. Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Professional Branding : Ensure your branding captures the eclectic and unique nature of your shop, reflecting a sense of discovery and sustainability.
• Social Media Engagement : Leverage Instagram, Facebook, and Pinterest to share new arrivals, fashion inspirations, and sustainable shopping tips.
• Fashion and Sustainability Blog : Publish content about fashion trends, upcycling tips, and the benefits of consignment shopping.
• In-Store Events : Host events like styling workshops and local artist pop-ups to create engaging shopping experiences.
• Partnerships with Local Designers : Collaborate with local designers or artisans to offer unique products and support local talent.
• Loyalty Rewards Program : Implement a program that provides discounts or special privileges to frequent shoppers.
• Targeted Local Advertising : Advertise in local media and online platforms to reach potential customers in your community.
• Email Marketing : Engage your customer base with newsletters that highlight new inventory, fashion tips, and store events.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your consignment shop meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your consignment shop business could be:

• Luxury brands at non-luxury prices 
• Top quality consignment and thrift items shipped fast!
• Sell your unwanted collectibles and make good money

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a consignment shop business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in consignment shops for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in consignment shops. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a consignment shop business include:

• Shop Clerks – make sales, customer service
• General Manager – inventory management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Consignment Shop – Start Making Money!

The consignment market is heating up, with resale clothing and accessories experiencing boom times. Now is the perfect time to open your own consignment shop. If you have a great eye for fashion and a desire to provide customers with great products, you could build a lucrative consignment operation.

You’re done your business homework now, so it’s time to get the word out and launch your successful consignment shop. 

• Consignment Shop Business FAQs

Yes, consignment can be a very profitable business. The market for resale clothing is growing rapidly, so demand for the items you sell should be high.

Consignment shops get a percentage of the sale price of the consigned items. The fee ranges from 40% to 60% for clothing and accessory sales. Fees can be higher for items like furniture.

The main risks are the items being damaged or stolen. Then you could be liable to the owners of the items.

You’ll need to train them on how to value consignment items. Then you’ll need to monitor the transactions they make to ensure that the prices are accurate.

You’ll need to create a strategic plan for how to market your shop, and how you’ll handle the business as your sales increase. 

The bottom line is most important. You need to be able to make enough profit to make a living.

I have recently given a small art gallery several of my handmade quilts for sale. I am curious as to what practices, documentation if any that the gallery should have provided to me to show I submitted these items and what happens if my items are stolen from the store. I feel concerned without anything “in hand” to prove that these things were given to them. Thank you for your advice.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Consignment Shop Name
• Create a Consignment Shop Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Consignment Shop Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Consignment Shop - Start Making Money!

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8 Tips for Launching Your Consignment Business

By SimpleConsign

Table of contents, wondering how to start a consignment shop follow these steps.

Opening a consignment shop can be a great way to turn your passion for vintage or unique items into a profitable business. And now is the perfect time to do so. According to thredUP and GlobalData:

The U.S. secondhand market  is expected to reach $70 billion by 2027.

Online resale  is expected to grow 21% annually over the next five years, reaching $38 billion by 2027. It's the fastest-growing resale segment.

Smart business owners start with a strong business plan

If you've ever asked yourself, "How do the best consignment stores work?" know that a successful consignment business begins with a solid business plan. The time you invest in creating this document saves you money and keeps you on track for the long haul. 

Entrepreneur.com suggests that starting a consignment clothing store requires an initial investment of $3,000 to $10,000. However, it takes at least two years to work out all the details and get the business running smoothly.

To start your own consignment store successfully, consider your business structure, target market, consignment policies, projected sales, and cash flow. You should align your goals with your projected sales to determine what steps you need to take to achieve them.

You will also need to make a list of start-up expenses, including the cost of shelving, tags, bags, a cash register, signage, and inventory. It is important to estimate how long your business can operate without additional funding so that you can give your store a fair chance of turning a profit.

The Small Business Administration has helpful resources that you may find useful for starting a consignment business.

1. Research the neighborhood

To choose a neighborhood, visit city hall and gather information on income, age, marital status, etc. It's important to be familiar with the area. You can make sure there's a market for your type of store in the area. 

Look for gaps in the market, current trends, and successful vendors. 

Does children's clothing resale dominate the industry?  Is there room for a furniture provider? What about luxury handbags?  

This will give you an idea of what items to sell, how to price them, and what to expect from the competition.

Remember, it truly is all about location. If your market has a lot of secondhand shops or a large, well-known shop will be in direct competition, think about ways to make your store unique. Look for a location with high foot traffic surrounding your target market. Implementing a comprehensive marketing strategy is important, but this approach can help you attract new customers faster.

Consider talking to the competition and contacting similar businesses in other cities or states. If you aren't comfortable talking to a competitor, at least browse their store and marketing materials. 

2. Choose a business model

There are two primary business models in the resale market: buy outright and consignment.

In the buy outright model, the seller receives payment first for their item. Then, the reseller takes over and sells it.

In the consignment model , the seller retains ownership of the item. However, the item is placed in the reseller's store or website for sale. The reseller takes a percentage of the final sale price as their commission.

The key difference between these two models is who assumes the risk and responsibility of selling the item. With buy outright, the reseller takes on the risk and responsibility, while with consignment, the seller retains it. Both models have their advantages and disadvantages, and it's up to the seller to decide which one is best for them.

Of course, there are other factors to consider. Will you charge extra for large items? What about credit card fees? Will you pass those on? It’s common to pass these on to consignors when appropriate. Before meeting with your vendors and consignors, you will need answers to questions like this. This is one area where choosing a consignment store point of sale , like SimpleConsign, really matters. The ability to add and configure custom fees adds to your bottom line. For a list of fees to consider, check out 10 Ways to Manage Your Bottom Line.

3. Decide whether you want to sell online in addition to your physical location

Keep in mind that the needs of a brick-and-mortar store are different from those of an online only consignment shop. If you choose to start an online consignment store, be sure to account for extra expenses like packing and shipping costs. You'll also want a dedicated space for packaging and sending out items.

You can take a hybrid approach to find what works for your business. SimpleConsign's Shopify integration makes this easy.

4. Choose a consignment store software

Choosing the right consignment POS provider is a critical decision for your business. The consignment software is the backbone of your operations and has a direct impact on your bottom line. It enables efficient transactions, accurate inventory management , and seamless customer experiences.

A reliable and user-friendly resale POS provider can streamline your business processes, improve customer service, and increase your consignment sales. On the other hand, a subpar consignment POS system can lead to costly errors, frustrated customers, and missed opportunities. Therefore, selecting the right consignment store software is crucial to the success and growth of your business.

5. Design an attractive store

Often, shoppers form lasting impressions of your consignment shop based on the layout of your store. No matter how well-stocked the store is, customers will find another place to shop if it isn't clean, bright, organized, and attractive. 

To enhance your sales, visit your preferred retailers and observe how they display their merchandise. To attract customers, place the seasonal must-have items at the front of the store.

You can keep the sale products and everyday items at the back. For smaller items that cost less than $10, it’s better to display them next to the register to increase impulse buying. These small purchases can add up to significant sales every month.

It’s also crucial to change the way you display your merchandise to make it feel fresh and new. You can check out " Retail Store Layout Designs that Increase Your Sales " for ideas on store layout designs.

6. Acquire inventory with a clear consignment agreement

To be successful in selling consignment products, you must attract consignors with quality merchandise. Don't open the doors before the shelves are full. Shoppers will hesitate to come back. However, if you fill your shelves with inventory shoppers aren't interested in, they won't return either. 

Knowing your neighborhood and its demographics means you'll know what merchandise to offer. Scour yard sales, auctions, estate sales, business liquidations, and thrift shops for good deals. Learn to bargain and negotiate. These skills will be needed when interacting with consignors. 

7. Seek community support

Consider reaching out to your community for support by teaming up with other businesses in your neighborhood. You could offer cross-promotional services and discounts to customers.

For instance, a clothing store could collaborate with a dry cleaner or tailor, while a formal wear shop could sell original accessories created by an aspiring jeweler.

Similarly, a children's consignment store should consider partnering with a local photographer for a customer appreciation sale, while a furniture shop could benefit from a strong relationship with a moving company.

8. Think outside the resale box

To become a successful consignment business, look for every opportunity to build your vision. Join organizations such as the  National Association of Resale Professionals (NARTS) .

Get involved with your local Chamber of Commerce. Find ways like Shop Small Saturday to encourage your community to shop locally. Do your homework, and you  will  be successful.

Ready to open your business?  Try SimpleConsign free  for 15 days.

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Home › Blog › How to start a consignment shop: step-by-step guide for 2023

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July 31, 2022 | BY Matt Kenyon

How to start a consignment shop: step-by-step guide for 2023

Get more digital commerce tips.

Tactics to help you streamline and grow your business.

A consignment shop is a great way to earn extra income or make a living. But how do you start one? Can it even compete with the behemoth shops that dominate the consignment space?

In this guide, we’ll go over:

• How to start a consignment shop
• Which type of store to open
• How to find the perfect location
• How to create a business plan
• How to acquire merchandise
• And how to hire and train employees

With a little planning and some focused effort (and some funding), you can have your very own consignment shop up and running in no time!

What is a consignment shop?

A consignment shop is a store that sells used or secondhand goods on behalf of its owners. The merchandise owner receives a portion of the sales price when the item is sold, and the consignment shop keeps the rest.

There are many consignment shops, including those specializing in clothing, furniture, art, and more. Some consignment shops only accept high-end merchandise, while others will take just about anything.

Some consignment shops are completely online, while others have brick-and-mortar locations. And some consignment shops are managed by individuals, while others are part of larger chain stores.

The following are some examples of consignment shops you’ve likely encountered before:

Clothing consignment shops:  These stores sell used clothing and accessories. The most popular items sold in clothing consignment shops are designer labels and vintage pieces. Examples include Buffalo Exchange and Beacon’s Closet.

Furniture consignment shops:  These stores sell used furniture and home decor. The most popular items sold in furniture consignment shops are mid-century modern pieces and antique furniture. Examples include Crate & Barrel and Ikea.

Art consignment shops : These stores sell used or secondhand art. The most popular items sold in art consignment shops are paintings and sculptures. Examples include Sotheby’s and Christie’s.

The benefits of starting a consignment shop

There are many reasons why you might want to start a consignment shop. Perhaps you’re looking for a way to earn some extra income. Or maybe you’re passionate about a particular type of merchandise and want to share that passion with others.

Whatever your motivation, there are many benefits to starting a consignment shop, including:

You can be your own boss : You’re in charge when you start a consignment shop. You can decide how to run your business, what merchandise to sell, and how to market your store.

You can make a difference:  Consignment shops are a great way to recycle and reuse goods that would otherwise end up in landfills. By selling secondhand items, you’re helping to reduce waste and preserve resources.

You can be creative:  A consignment shop is a blank canvas. You get to decide how to decorate your store, what type of merchandise to sell, and how to market your business.

You can earn a profit:  If you run your consignment shop well, you can make a decent profit. The key is to find the right mix of merchandise and customers.

You can start an online consignment shop inexpensively:  If you’re looking to start a consignment shop on a shoestring budget, an online store may be the way to go. You can list your items for sale on platforms like eBay and Craigslist or create your own website.

The different types of consignment shops

The example shops listed above are big-name brands with brick-and-mortar and online shops. However, there are many different types of consignment shops, from small mom-and-pop stores to online marketplaces.

Here are some of the most common types of consignment shops:

Brick-and-mortar store:  This is the most traditional type of consignment shop. A brick-and-mortar store has a physical location where customers can come to browse and purchase merchandise.

Online marketplace:  An online marketplace is a consignment shop that exists solely online. Customers browse and purchase merchandise through an online marketplace, such as eBay or Etsy, or a website powered by an ecommerce platform like Shopify or WooCommerce.

Pop-up shop:  A pop-up shop is a temporary brick-and-mortar store. Pop-up shops are typically open for a few days or weeks. They’re popular among online retailers who want to test the brick-and-mortar waters without making a long-term commitment.

Mobile shop:  A mobile shop is a consignment shop on wheels. Mobile shops typically sell clothing, jewelry, and other small items. They’re often found at farmers’ markets, fairs, and festivals.

What you’ll need to start a consignment shop

Now that you know the different types of consignment shops, it’s time to start planning your own. The first step is to decide what type of store you want to open.

Once you’ve decided on the type of store you want to open, you’ll need a few key things to get started. Let’s go through them in detail.

A business plan

A business plan is a document that outlines your business goals, strategies, and how you plan to achieve them. If you’re seeking funding from investors or lenders, you’ll need to include a business plan with your loan application.

How to create a business plan for a consignment shop

There’s no one-size-fits-all template for creating a business plan, but there are some key components you’ll want to include, such as:

An executive summary:  This is a brief overview of your business, including your goals and how you plan to achieve them.

A description of your business:  Include an overview of your consignment shop, including what type of merchandise you’ll sell and your target market.

Your marketing strategy:  Describe how you plan to market your consignment shop, including online and offline marketing tactics.

Your financial projections:  Include a 12-month profit and loss statement, as well as a balance sheet. If you’re seeking funding, you’ll also need to include your loan amount and how you plan to repay it.

Your management team:  Introduce the members of your management team, including their experience and qualifications.

A business plan is a living document that should be updated as your business grows and changes. Review your business plan regularly, and make changes as needed.

Here’s an  example business plan template  for consignment shops.

The next thing you’ll need to get started is funding. If you’re not using your savings to finance your consignment shop, you’ll need to apply for a business loan or seek investment from angel investors or venture capitalists.

How to find capital to start a consignment shop

There are a few different ways to finance your consignment shop, including:

Business loans:  Business loans can be used to finance the start-up costs of your consignment shop, such as leasehold improvements, inventory, and marketing expenses. You can find business loans through banks, credit unions, and online lenders.

Angel investors : Angel investors are high-net-worth individuals who invest their money in businesses they believe in. They typically invest smaller sums of money than venture capitalists, but they don’t always require a stake in the company.

Venture capitalists:  Venture capitalists are firms that invest money in businesses with high growth potential. They typically invest larger sums of money than angel investors, but they also require a company stake.

Once you’ve secured the funding you need to get started, you can start looking for a storefront.

Picking a storefront for your consignment shop

The next step in starting your consignment shop is to find the perfect storefront. Here are a few things to keep in mind when you’re searching for a retail space:

Location:  The location of your store is important for two reasons. First, you want to ensure your store is in a high-traffic area so you can get as much foot traffic as possible. Second, you want to make sure your store is in a safe neighborhood so you can avoid any security issues.

Size:  The size of your storefront will be determined by the type of merchandise you plan to sell. You’ll need a larger space if you’re planning on selling larger items, such as furniture. However, if you’re planning on selling smaller items, such as clothing, you can get away with a smaller space.

Layout:  The layout of your store is important for two reasons. First, you want to ensure your store is easy to navigate so customers can find what they’re looking for. Second, you want to make sure your store is aesthetically pleasing so customers will enjoy shopping there.

How to find a storefront for your consignment shop

Here are a few tips for finding the perfect storefront for your consignment shop:

• Start by searching online listings
• Drive around town and look for vacant storefronts
• Ask family and friends if they know of any available retail spaces
• Contact a commercial real estate broker to help you find a space
• Once you’ve found a few potential storefronts, schedule tours so you can see the space in person

How to acquire merchandise for your consignment shop

Now that you have a storefront, it’s time to start thinking about inventory. The first step is deciding what type of merchandise you want. Once you’ve decided on the type of merchandise, you need to figure out how you’re going to acquire it.

There are a few different ways to do this:

Buy from wholesalers:  Wholesalers are companies selling bulk products at a discounted price. You can find wholesalers online or through trade magazines.

Some examples of online wholesalers are:

• Alibaba.com
• WorldwideBrands.com
• The Wholesaler UK

Join the Association of Resale Professionals:  The Association of Resale Professionals is a trade association for the resale industry. They offer a directory of manufacturers that sell to resellers.

Attend trade shows : Trade shows are events where manufacturers showcase their products to potential buyers. You can find a list of trade shows in your industry by searching online.

Create your own products:  Creating your own products is a great way to differentiate your consignment shop from the competition. 

Buy from liquidators : Liquidators are companies that sell products that have been returned or damaged. You can find liquidators online or through trade magazines.

Some examples of online liquidators are:

• B-Stock Solutions
• Liquidation.com
• Direct Liquidation

Consign from individuals:  Consigning is when people bring their unwanted items to your store and sell them on consignment. This is a great way to start because you don’t have to put any money down upfront.

Once you’ve decided how to acquire your merchandise, it’s time to start thinking about how you will price it.

Search online directories:  A few online directories list companies that sell products to resellers. Some examples of these directories are:

• ResaleWorld.com

Once you’ve found a few potential suppliers, reach out to them and see if they’re interested in working with you.

If they are, ask for samples of their products to decide if you want to carry them in your store.

You should also ask about their minimum order requirements, shipping costs, and payment terms.

Once you’ve decided on a few suppliers, place your first order and start stocking your shelves!

How to price merchandise for your consignment shop

There are a few different ways to price merchandise for your consignment shop:

Price by item:  This is the most common way to price merchandise for a consignment shop. To do this, you’ll need to research how much similar items are selling for and price your items accordingly.

Price by category:  Another way to price merchandise is by category. For example, you could price all clothing items at 50% off the retail price, all furniture items at 20% off the retail price, etc. This is a great way to simplify the pricing process.

Discounts and promotions:  You can also offer discounts and promotions to attract customers to your store. For example, you could offer a 20% discount on all items for the first week of business or a 10% discount for customers who consign items.

Now that you have a price strategy, it’s time to start thinking about how you will promote your store.

How to promote your consignment shop

There are a few different ways to promote your consignment shop:

Create a website:  A website is a great way to promote your store and reach a wider audience. You can use a platform like WordPress or Squarespace to create a professional-looking website without any coding knowledge.

Be sure to include information about your store, such as the address, hours, and type of merchandise you sell.

Use social media:  Social media is a great way to connect with potential customers and promote your store. Create accounts on all the major platforms, such as Facebook, Twitter, and Instagram. Then, start posting interesting content encouraging people to visit your store.

Run ads:  You can also run ads on social media or Google to promote your store. This is a great way to reach a larger audience, but it can be expensive.

Participate in local events:  Another great, low-cost way to promote your store is by participating in local events. For example, you could set up a booth at a community garage sale or a table at a local farmer’s market. This is a great way to get your store’s name out there and attract potential customers.

Now that you know how to start a consignment shop, it’s time to start implementing your plan. Good luck!

Starting a consignment shop can be a great way to make money and declutter your home simultaneously. However, it’s important to do your research and create a solid business plan before getting started. Use the tips in this article to help you get started on the right foot.

For more advice on building and scaling your ecommerce or brick-and-mortar business, subscribe to our blog or check out these related posts:

• 30 Big ecommerce Trends to Watch Out For in 2023
• 13 Best Free Online Stores to Start Your ecommerce Business
• 33 Top Ways To Drive Traffic To Your ecommerce Website For Explosive Growth
• How is Email Useful for ecommerce? Keeping Customers Engaged

Matt Kenyon

Matt has been helping businesses succeed with exceptional content, lead gen, and B2B copywriting for the last decade. When he’s not typing words for humans (that Google loves), Matt can be found producing music, peeking at a horror flick between his fingers, or spending quality time with his wife and kids.

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How to Write a Business Plan for a Consignment Shop

• Small Business
• Business Planning & Strategy
• Write a Business Plan
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How to Write a Business Plan for Retail Designer Hats

How to open an old-fashioned general store, how to sell my flower shop.

• How to Write a Business Plan for a Convenience Store
• How to Start a Consignment Resale Shop Business

Starting your own business is one of the best ways to grow your wealth and achieve your dreams. Opening a consignment store can be an excellent business move for the right individual, but before you open your doors you need to know how to write a business plan for a consignment shop. The business plan defines the scope of your business, lays out how you are prepared to succeed and details the relevant experience you bring to the new venture.

Business Plan Template

Microsoft Office has some excellent templates available for free downloads. Other popular office suites also include templates that can be customized to create business plans. If you wish to complete your business plan the old-fashioned way, you can obtain business plan templates from your local Chamber of Commerce or from the Small Business Administration office in your area. Financial books at the library and bookstore are also good sources of business plan information and examples.

List Your Business Experience

Make a list of your experience in the retail business. You can make this list mentally, but it is often helpful to get it down on paper. Include all experience you have with buying and selling the type of items you plan to offer at your consignment store, including time spent as a sales clerk or buyer.

In order to be successful, the owner of a consignment clothing store, for example, needs to have a discerning eye and the ability to pick up on new trends in the fashion industry. Likewise, the owner of a consignment furniture or accessories store needs to be able to spot the trends and buy the furniture that is most likely to sell quickly.

Executive Summary and How to Differentiate the Business

This section should state the purpose of the business, including the proposed name of the operation. The section that follows should state how the store will differentiate itself from the competition, that is, what makes your consignment store different from the thrift store down the street. Offering types of products not normally found in the second-hand market can be a big help.

Marketing and Promotion Strategy

How will you advertise your consignment store? What techniques do you plan to use? It is important for lenders and others who review your business plan to see how you intend to market your business and introduce it to the community.

Organization and Management

Provide information about the ownership of the new business, including the names and titles of all business partners and officers. Also provide a brief but thorough overview of the start-up company. The overview should include details about the products the store will sell, where it will get its merchandise and where it will be located.

List your management experience, focusing on experience that is relevant to the consignment business world. List the number of years of management and relevant retail experience you bring to the new enterprise.

Service or Product Line

List the types of products the consignment store will offer. Many consignment retailers limit their product lines to high-end designer clothing and accessories, for example, in an effort to attract a wealthier and more discriminating clientele. Provide a brief overview of the products you already have in stock, as well as your plans for obtaining quality merchandise on consignment.

Market and Competitive Analysis

Include information on any market analysis you have completed, including details about any existing consignment stores. Compare your new business model to the stores that already exist in the community, and explain how your operation will improve on that model.

Financial Projections and Related Information

Provide relevant financial information for your start-up company, including any partnership arrangements you have entered into and any loans you have obtained. Attach statements from your CPA or accountant if applicable.

Things You Will Need

Computer (optional)

Business plan template

• Bplans.com: Women's Clothing Boutique Sample Business Plan
• SBA.gov: Write Your Business Plan
• Microsoft Office: Business Plan for Startup Business

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance writer since 2003. Her work can be seen on Credit Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.

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How to Start a Consignment Shop

Starting a consignment shop can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful consignment shop.

Importantly, a critical step in starting a consignment shop is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Consignment Shop :

• Choose the Name for Your Consignment Shop 
• Develop Your Consignment Shop Business Plan
• Choose the Legal Structure for Your Consignment Shop 
• Secure Startup Funding for Your Consignment Shop (If Needed)
• Secure a Location for Your Business
• Register Your Consignment Shop with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Consignment Shop 
• Buy or Lease the Right Consignment Shop Equipment
• Develop Your Consignment Shop Marketing Materials
• Purchase and Setup the Software Needed to Run Your Consignment Shop 
• Open for Business

1. Choose the Name for Your Consignment Shop 

The first step to starting a consignment shop is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your new business venture:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your consignment shop.

2. Develop Your Consignment Shop Business Plan

One of the most important steps in starting a consignment store is to develop your consignment shop business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your new business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your consignment shop.
• Company Overview – this section tells the reader about the history of your consignment shop and what type of consignment store you operate. For example, are you a traditional brick-and-mortar consignment shop, online consignment shop, or a drop-off consignment shop?
• Industry Analysis – here you will document key information about the consignment and resale industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your consignment shop? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your consignment shop make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

3. choose the legal structure for your consignment shop .

Next you need to choose a legal structure for your consignment shop and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the consignment store owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a consignment shop together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a consignment shop include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a consignment shop is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your consignment shop, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

4. Secure Startup Funding for Your Consignment Shop (If Needed)

In developing your consignment shop business plan , you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a consignment business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a consignment shop that they believe has high potential for growth.

5. Secure a Location for Consignment Shop

There are a few key things to consider when looking for the right location for your consignment shop. First, you’ll want to make sure the location is in a high traffic area with plenty of foot traffic. Additionally, you’ll want to make sure the space is large enough to accommodate your inventory. Finally, you’ll want to ensure the rent is affordable.

6. Register Your Consignment Shop with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your consignment shop’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your consignment shop to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Licenses and permits you may need to launch a consignment shop include a business license, a seller’s permit, and a zoning permit. Contact your local government to find out more about the specific licenses and permits you need to start your consignment shop.

10. Get Business Insurance for Your Consignment Shop 

There are various types of insurance that are necessary to operate a consignment shop.

Some business insurance policies you should consider for your consignment shop include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Consignment Shop Equipment

To run a consignment shop, you will need some basic equipment, such as racks, hangers, and shelves. You will also need a point of sale (POS) system for purchases. You may also need basic administrative equipment such as a phone, printer, and fax machine. 

12. Develop Your Consignment Shop Marketing Materials

Marketing materials will be required to attract and retain customers to your consignment shop.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your consignment shop. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional consignment shop website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your consignment shop.

13. Purchase and Setup the Software Needed to Run Your Consignment Shop 

To run a consignment store, you will need software to manage your inventory and transactions. Inventory management software can help you keep track of what items are in stock, what items have been sold, and how much money you have made from consigned items. Transaction management software can help you keep track of payments from customers and consigners, as well as track your profits and losses.

14. Open for Business

You are now ready to open your consignment shop. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Ultimate Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your consignment shop business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Start a Consignment Shop FAQs

Is it hard to start a consignment shop.

No, it's not hard to start a consignment shop. In fact, there are a lot of great resources available online that can help you get started. You can also contact your local Small Business Administration office for tips and advice. Additionally, you can get in touch with other entrepreneurs who have successfully launched their own resale stores to learn how they did it.

How can I start a consignment shop with no experience?

There are ways that you can successfully run a consignment shop with no experience. You can research the process online and attend workshops or webinars on consignment shop operations. Seeking help from an experienced friend or family member can be helpful. You also need to decide on the type of consignment shop you'd like to open and develop a business plan outlining your goals, strategies, and financial needs.

What type of consignment shop is most profitable?

The most profitable type of consignment shop is the one that specializes in high-end items. These items tend to have a higher resale value, so you can make more money on them. You'll also need to have a lot of space to store these items.

How much does it cost to start a consignment shop?

Starting a consignment store typically costs around $10,000-$50,000. However, this can vary depending on your store's size and physical location. Startup costs include renting or buying a store location and building out the inside of the store with shelves and racks for holding inventory. You'll also need to cover marketing expenses like business cards and advertisements. Additional startup costs include the purchase of furniture, fixtures, and equipment to set up your office area (if separate from the retail space), as well as paying licenses and taxes.

What are the ongoing expenses for a consignment shop?

There are multiple ongoing expenses that need to be considered when starting a consignment shop. These include rent, utilities, advertising, and employee salaries. It is important to have a good understanding of these expenses before starting a consignment shop, as they can impact the overall profitability of the business.

How does a consignment shop make money?

Consignment stores make money by charging consignors a fee for displaying and selling their items and by taking a commission on items that are sold. The commission is typically a percentage of the sales price, and it varies depending on the store.

Is owning a consignment shop profitable?

Yes, a consignment store can be a profitable business because it doesn't require a lot of startup costs, making it a relatively low-risk business venture. Also, there are many customers who are looking for unique or hard-to-find items. There are also many consignors looking for an appealing consignment shop to sell their items.

Why do consignment shops fail?

One of the main reasons why consignment stores fail is because they do not generate enough sales. This can be due to a number of factors, such as a lack of marketing or an inability to attract customers. Another reason consignment shops fail is because they do not have a solid business plan in place. This can lead to financial instability and an inability to cover costs. Lastly, consignment stores can fail if the owner does not maintain adequate levels of inventory.

Other Helpful Business Plan Articles & Templates

Sample Consignment Store Business Plan

• October 4, 2023

CONSIGNMENT SHOP BUSINESS PLAN SAMPLE

Are you looking for a cheap and easy business to start?

When you want to start a new and exciting business, you may want to think about starting a consignment shop. There is a lot that you can do with this type of business and still have a lot of fun doing it at the same time.

A consignment shop is a store where people bring things that they want to sell.

Oftentimes this is clothing, but it can be any number of items. You then sell the items for the person and take a percentage of the profit, giving them the rest.

Consignment shops are great not only for the owner but for the customers as well. People who can’t afford to shop retail can find nice items in consignment at a lower price.

Consignment shops have started popping up in nearly every town across the United States and the world at large.

Whether they are selling clothes or furniture, sporting goods, or household appliances, consignment offers a great way for people to buy and sell used goods, whether it is online or in a brick-and-mortar store.

I have here 5 steps to take for you to be able to start a consignment shop in your community or city and here they are.

• Research your Competitors

It takes a lot of research and groundwork to kick-start any kind of business and starting a consignment shop is no different.

Before you begin this business, you have to research your competitors. Jot down what you believe are their strengths and weaknesses. You should fine-tune your business plan and your advertising to play up your uniqueness. Decide what area of town your consignment shop would do best in.

• A Business Plan for your Consignment Shop

For a business to be successful, the one thing it needs initially above anything else is a solid consignment shop business plan. Even if you are not planning on getting a loan, you still need a business plan to help you plan things out and know the direction you want to move in. Without a business plan, the success of your consignment shop is uncertain.

Even a ten-page business plan will double your chances of success. Your business plan should spell out what your market is like, what kind of competition you have, and what niche you will fill. It should specify your business structure, how many employees you’ll need, and what your startup costs will be, as well as what your monthly overhead costs will be and how many months it will take for you to break even.

You also need to write a basic marketing plan and write a detailed resume for yourself and why you have what it takes to run a great consignment shop. There are plenty of resources online for how to write a business plan, but that gives you the thumbnail sketch.

• Selecting a Location

The location is a primary consideration and one of huge significance. Several aspects need to be considered.

Obviously, the first consideration is rent. Most prime locations charge a steep rent. But if you can afford it, you should not compromise on a location that has all the elements necessary to start a consignment shop.

Some of these are ample parking space, high traffic from pedestrians and vehicles, and proximity to similar or complementary businesses.

Have it in the back of your mind to get a good location that fits your budget so you don’t end up in a tight situation.

This will be easier than you think. Almost any consignment store owner will tell you that getting inventory is not a problem. Place a few ads or let friends know you’re taking inventory, and your store will fill up faster than you can believe.

The real problem is picking stuff that will actually sell. That’s a fine art, and most of your long-term success as a consignment store owner will hinge on it. Just keep practicing.

If you are taking things in on consignment, remember to only accept items that really grab your attention. You have no obligation to take things off of people’s hands that are too used or don’t fit with your style. The pickier you are, the more unique your store will become.

• Advertising your Consignment Shop

If you decide to start up a consignment shop, your biggest expense is going to be advertising. Be patient and continue to spread the word. Be fair with your prices and people will come in and give you repeat business.

As you make a profit, grow your business with it. Eventually, you could move your home-based business to something even larger!

You can advertise in the local newspapers. This is a great way to let others know who you are and what you want to do. Another good idea is to send out flyers to the local neighbors in your area to let them know that you are new and that you are in business.

CONSIGNMENT SHOP BUSINESS PLAN EXAMPLE

Here is a sample business plan for starting a consignment store.

A consignment store business is a business that can be started with very little capital. This is simply because it involves the sale of fairly used items that do not really cost a lot. The goods that you intend to sell in your consignment store can be sourced from individuals that do not need them and sold to those that need them at very affordable prices.

The ease with which a kids consignment store can be set up makes it a perfect business for individuals that do not really have a lot in terms of capital.

Apart from doing your feasibility study and raising the capital for starting a consignment store business, you will also need to come up with a business plan. Well, this article contains a consignment store business plan sample. This will help you write the perfect business plan for your consignment store business.

Business Name:  Mr. Woods Consignment Store

Executive Summary

Our Products and Services

Vision Statement

Mission Statement

Business Structure

• Market Analysis

Sales and Marketing Strategy

• Financial Plan

Competitive Advantage

Mr. Woods is a consignment store that will be located in Detroit, Michigan. Mr. Woods consignment store was established by Jesse John, a renowned furniture maker with over 30 years of experience. This business will be set up at $50,000 and will make very cheap but quality furniture available to the residents of Detroit, Michigan.

To get things started, we have already gotten an ideal facility where our consignment store will be located. This facility is in a very busy environment and also very easy to access. We are not just in this industry to make money, we are also very interested in becoming one of the biggest consignment stores in Detroit, Michigan, the entire United States, and major cities in neighboring Canada.

The level of competition in the consignment industry is quite high. The reason for this is the very little amount that is needed to start this business, the very little requirement for technical skill, and the huge gains that can be made in this industry.

To survive in this highly competitive industry, we have decided to create our own niche. We will not just sell products to members of the public, we will stick to the sale of furniture only.

Some of the goods that we will be selling are

• Fairly used office furniture
• Fairly used kitchen cabinets

At Mr. Woods consignment store, our vision is to establish a top-notch consignment store in Detroit, Michigan. We aim to use this means to meet the basic furniture needs of the people of Detroit, Michigan.

At Mr. Woods consignment store, our mission is straightforward. Our mission of establishing a consignment store is to make all manners of quality furniture available to the residents of Detroit, Michigan at very cheap prices. We are also looking to become a force to reckon with in this industry.

Several things keep us driven at Mr. Woods’s consignment store. However, a few of them are; to help people get the best of furniture at giveaway prices and to dominate the consignment store industry in the United States.

We are a new consignment store and we know that we will have to be intentional if we want to make it to the top.

To ensure that we become a force to be reckoned with in a very short while of operation, we will hire only hardworking and experienced individuals to work with us.

We will also ensure that our workers put in their best by giving them the best treatment possible.

Market Analysis Market Trends

The consignment industry has been running for quite a while. Since it was established, all it has done is flourish even when other industries haven’t. This is so because of the very high demand for cheap and quality fairly used goods.

The truth remains that the demand for consignment goods skyrockets when the economy is bad.

Now, look at it from this perspective; when the economy is bad, lots of individuals can’t afford to get quality new goods. This, therefore, makes most people focus their attention on fairly used goods.

There is a high level of competition in this industry, as a result of this, we have come up with strategies to help us make more sales than our competitors. Some of them are;

• We will ensure that we have a strong internet presence
• We will ensure that our handbills are made available at public places so that people can get aware of our existence

Target Market

• There are lots of consignment stores scattered across the United States. This implies that there is a high level of competition in this industry. We have carried out our research and have decided to deal in furniture only. Those we are looking to offer our services to are;
• Family People

Financial Plan Source of Startup Capital

Not much is need to start up this business. Despite this, we do not have all the money that we require to startup. We have 50% of the amount we need. This amounts to $25,000, the remaining amount will be sourced from the bank.

Mr. Woods consignment store is a consignment store that focuses on furniture only. Now, the fact that this consignment store is owned by a furniture maker automatically puts us ahead of other consignment stores in our niche. We have decided to capitalize very strongly on this factor.

This is a business plan sample for a consignment store business . This business is owned by Jesse John and will be located in Detroit, Michigan.

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Thrift Store Business Plan Sample

Published Aug.23, 2018

Updated Apr.24, 2024

By: Brandi Marcene

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Table of Content

Do you want to start thrift store business?

Do you want to start a thrift store? Well, if you want to start a business whose startup costs will be run over by the profits earned in the very few months, helping the underprivileged side by side, then this is undoubtedly the most suitable business for you.

A thrift store resembles opening a second hand store , in which you can keep used clothes, books, furniture, crockery or whatever you want, and sell them in relatively low prices. The thrift store owners gather the items by the rich community, which are in a position to be used again, and keep them in their stores.

Just like every other business, the first thing before starting a consignment shop is to make a business plan for thrift store , adding all the details and decisions about how will you manage to collect the items, how many persons will be required, which will be the most suitable location etc. As you might be starting this business without experience, you will be in need of a help regarding writing an professional business planning . You can take help from this s thrift store business plan sample  free of cost written for a thrift store startup named, ‘City Thrift Store’.

Executive Summary

2.1 the business.

City Thrift Store will be owned by Jude Daylon, who is a graduate from Harvard University. City Thrift Store will be located on Howard Street, one of the bustling streets of San Francisco. The business plan for thrift store is aimed to gather the used items which are in a condition to be used again and sell them at economical prices. The variety and number of the used items depend upon how vast do you want your business to expand. City Thrift Store is aimed to keep used clothes, books, toys, musical instruments, furniture items, small electronic instruments at the store with appealing presentation all the time.

2.2 Management

Management is the primary footstep on which the whole thrift store business stands. This business will require extraordinary management skills to make sure that the stock of items is available in the store every time and is displayed in the appealing way.

Jude has many unique thrift store marketing ideas , and he will act upon all by being the manager himself. Before starting a consignment shop business , Jude has planned all the policies and possible mechanisms for the smooth running of the store. He has hired a number of drivers and social workers to collect the items by roving in the whole San Francisco, which is a necessity to start a second hand store .

2.3 Customers

Our target market will be the residents who can’t afford expensive things and have relatively low income than the other citizens. Moreover, the people who are travelers, tourists, or students and want to buy reasonable but good quality goods for temporary use will also be our potential customers.

2.4 Business Target

We aim at becoming the most visited thrift store in the whole San Francisco. We aim at stabilizing our business plan for thrift store and balancing the initial startup costs with earned profits by the end of the first year.

The business targets and the profits as forecasted by our experts for the next three years are demonstrated in the following graph:

Company Summary

3.1 company owner.

City Thrift Store will be owned by Jude Daylon. Jude is a graduate and has been working as a senior manager in a prestigious restaurant for four years. Jude has done a lot of research on how to start a second hand store  and is passionate enough to help the underprivileged. He wants to start a trusted thrift store by collecting used products from the wealthier community.

3.2 Why the business is being started

San Francisco is the city, which is suffering from highest levels of income inequality. The difference of the income can be demonstrated by the fact that the city is divided in two groups of rich and poor, and the category being called as rich is the one which has 11 times income than that of the poor. An estimate shows that one out of ten families in the Bay Area are struggling to hardly make both ends meet.

Besides that, the rich community dispose of many things which are in usable or sometimes good state just because they get bored. Such people want someone to take away donations of clothes and other things from them and give to the poor, by usually putting them outside of their houses. So, Jude has decided to help the low-income and average households of his city by gathering those items and running a consignment shop .

3.3 How the business will be started

Don’t do the mistake of opening a consignment shop , without efficient planning. You will need the persons to load the luggage onto the vehicles and display them in different sections in the store. Jude has planned to make separate and arranged sections of the products so that customers can easily buy them. Jude has arranged the vehicles for loading the used items, he has made a list of the staff he will require to hire, moreover, he will also hire some good speakers to raise awareness among the wealthy to donate the things they don’t need.

If you are going to enter this venture you have to collect many things before starting the shop. But, this all can be done only by accurate planning. If you are new to the business plan for thrift store , you can take help from opening a consignment store ideas and plans available on the web like this one free of cost.

The financial experts have forecasted following costs for expenses, assets, investment, and loans for the startup.

Services for customers

If you are thinking about starting a second hand store , you must decide the things you will keep in your store. A thrift store can contain anything which can prove useful for the people. In case, you are a beginner in this business and don’t know much about how to open a second hand store , you can take help from this thrift store business plan sample of City Thrift Store. This sample business plan will not only guide you in opening the store but will also assist you by explaining how to run a consignment store successfully.

The City Thrift Store has hired skilled repairers to repair any type of damages to the second-hand objects and make them reusable. Our store will sell the following items.

• Furniture: We’ll clean and polish the furniture items such as wooden tables, chairs, cradles, old rugs and carpets, cupboards, etc. which are in a reusable condition and sell them to at very low and economical prices.
• Clothes, Shoes & Books: The reusable books, shoes, fashion accessories, and clothes like dress shirts, sweaters, jackets etc. will also be kept at the store to be purchased by the low-incomes.
• Small Electronic Devices: We will also sell the technology products and small electronics such as cell phones, microwaves, printers, mobile and computer accessories, storage devices and much more than that.
• Sports Equipment & Musical Instruments: This type of inventory is often found in the solely new condition as people after getting bored put their guitars, pianos, rackets, footballs and the things like that outside their house to be taken by someone, so we have decided to keep such reusable things in our shop.
• Miscellaneous: Besides the above-mentioned necessities of living, we will also keep the miscellaneous items like crockery, decoration pieces, baskets, plastic products etc.

Marketing Analysis of thrift store business

The most significant component of a thrift store business plan is its precise and accurate marketing analysis. Marketing analysis will help you to understand the position and demand of this business plan for thrift store in the latest market. It is important as it can help you in finding the most suitable location for your store. The location which will be frequently visited by your target customers and your donors. Your consignment shop business plan  must also include the strategies and policies you’ll adapt to market your services and how effectively can you gain and maintain your potential donors.

So, if you have any doubts and confusions regarding how to start a consignment shop business , you can take help from the thrift store business plans available online, you can also take help from this thrift store business plan sample  for City Thrift Store. You can also have the opportunity of downloading business plan for thrift store pdf from the web. No matter, how many business plans you read before writing yours, that cannot be equivalent to a single consignment store business plan  written by a professional marketing analyst. It would be better for you to seek the services of a professional to make for you a thrift store business plan template . A professional can better understand the marketing trends and do accurate marketing analysis and segmentation of your location before making a thrift store business model  for you.

5.1 Market Trends

Due to the rising economic inequality in the city and financial stress on the underprivileged and the average, people are now trying to cut their discretionary spending and are fascinated towards the idea of buying second-hand things on reasonable prices. The industry of selling used goods is growing at a noticeable rate of 2.6% annually. According to IBISWorld, there are about 84,037 such businesses running in the United States, employing more than 267 thousand people in the whole country. No matter, how many businesses of thrift store are currently running in the country, there is still demand of more in some areas, like the one for City Thrift Store.

If you are thinking that how can you generate a profit by selling the goods at almost no prices, whereby you have to bear the expenses of the staff you hire, don’t worry current report by IBISWorld has shown that this business has generated $20 billion at an annual rate.

These statics shows that you can also earn a massive profit besides helping people, provided that you plan your business plan for thrift store successfully.

5.2 Marketing Segmentation

Our customers will be the people with average financial background. Most people living in the Bay Area of San Francisco do not have enough incomes to meet their expenses in a rich city. These people lust for the items like clothes, furniture etc. and are convenient in buying used items. It is also a requirement of this business to attract notable and rich people for maximizing our donations, they will not be our customers, they will be our need. We’ll arrange seminars and advertise the need of their donations through social media.

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Moneyless Senior Citizens: According to a report by City Performance Scorecards, more than 15 thousand senior citizens are living below the poverty level in San Francisco. The health and age of such people don’t allow them to meet their needs by hard work.

5.2.2 Underprivileged Children, Teens & Adults: There are many children and teens in the city who desire to buy good clothes, tech-based things, or sports equipment and musical instruments, but the reality is that most of their desires remain unfulfilled due to the costs of such items. Moreover, about 61 thousand young and adults are living below the poverty level in San Francisco, according to the same report. So, our marketing analyst has identified this as our largest target group in buying used goods.

5.2.3 Tourists & Students: There are often situations when you are roaming in another country, but due to wrong estimates, become out of budget. So, the tourists or students who have to cut their discretionary needs, temporarily, will also be one of our target groups.

5.3 Business Target

We aim at serving more and more needy and average people of our city to help them in raising their status and spirits. Our aim is to become the most visited thrift store in our city and the most trusted thrift store in the eyes of donors. We also aim to balance the initial startup costs with the profit earned in only a few months after the launch.

5.4 Product Pricing

Our main target is to serve the underprivileged community of the city, but, due to requirements of staff, wages of employees, costs of inventory, and expenses of transportation, we can’t sell the items totally free of cost. However, we have priced all the items at very meager and low costs to meet the targets of our business plan for thrift store .

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Great service. Good turnaround time and quality work. Thanks!

If you are opting for starting a consignment store , you must prepare an effective and detailed business plan first. If you want your business plan to be complete and outstanding than instead of focusing on just how to open a consignment store you should also focus on how to run it successfully and how to pull the traffic to your site. If you are having difficulty about how to start a thrift store business plan, you can take help from this sample business plan for the City Thrift Store.

6.1 Competitive Analysis

Our biggest competitive advantage is the location which we have chosen after a great research and analysis. Our store is located on the main street of San Francisco, which is a street every citizen encounter while travelling in the city, as it connects the residential communities to the offices, institutes and recreational places. When so many people pass by our shop daily, a large number of them will be surely attracted toward our beautiful display through the large sized windows.

Our second competitive advantage is our excellent management system. We’ll collect the item which are in a good condition daily and display them in well-organized separate sections in our stores for the convenience of our buyers. Moreover, we have a quick transport facility for the rich people who want to donate their goods to us in large amounts.

6.2 Sales Strategy

For promoting our sales, we will advertise our store in local magazines, newspapers and social media. We will also distribute our flyers in nearby schools and colleges. We’ll post our banners in well-off residential communities.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

By analyzing our market segmentation strategy, our experts have forecasted the following sales on a yearly basis which are summarized in the column charts.

Personnel plan

No matter how much you invest your assets on your startup, it is all going to be wasted if you don’t have honest and dedicated workers. Before you open a consignment store , you must make a list of the workers you’ll need to hire. You should train your staff before starting your shop that how to value the needs of customers and help them in finding the best product for them.

If you are searching for how to start a consignment store,  then you can take help from this sample business plan for thrift store in which we have a complete guide on how to run a consignment shop . This thrift store business plan sample will guide you by informing you about the staff Jude will hire for running the City Thrift Store.

7.1 Company Staff

Jude will manage the overall operations and will hire the following people for his assistance.

• 1 Accountant for maintaining financial and other records
• 2 Cashiers for selling products and maintaining records
• 6 Salespersons for organizing the store and its different sections and assisting customers in finding their required item
• 3 Drivers for collecting products from the whole city every morning
• 5 Technicians/Workers/Sewers/Menders for repairing and reviving used things
• 2 Cleaners for maintaining freshness and cleanliness of the store
• 2 Persons responsible for advertisement of the store

Financial Plan

The first step before starting any business is to make a comprehensive business plan, and the most important part of an effective thrift store business plan is its financial plan. Before you start a consignment shop , you must collect a lot of items to keep in your store. You can find them free of cost but to be good and distinguished, you should sell these products after reviving them. For managing the costs of their repairs, the rent of your store and the salaries of your employees, you will need money initially. So, in your financial plan, you have to plan the ways of balancing your expenses with the profits earned. Although the business plan for thrift store is in great demand and has is responsible for generating a lot of profit annually, but besides thinking about how to start a consignment shop , you should also think about the worst situations you can face financially.

If you are searching for profit thrift store business plan and need help in writing an effective financial plan, you can take help from this sample business plan for thrift store on how to open a consignment shop . The statics and figures in this sample business plan are for the City Thrift Store, so, it is advised to hire a professional financial planner advisor, who can write for you an accurate financial plan according to your investments and sales.

8.1 Important Assumptions

The company’s financial projections are forecasted on the basis of following assumptions. These assumptions are quite conservative and are also expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.

  8.2 Brake-even Analysis

The following graph shows the company’s Brake-even Analysis.

 8.3 Projected Profit and Loss

8.3.1 profit monthly.

The following charts shows detailed information about profit and loss, and total cost of sales.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

The following column diagram shows the projected cash flow.

Download Thrift Store Business Plan Sample in pdf

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Consignment Shop Business Plan

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Here is a free business plan sample for a fruit and vegetable store.

Have you ever envisioned owning a bustling fruit and vegetable market that serves as a cornerstone of health in your community? Wondering where to start?

Look no further, as we're about to guide you through a comprehensive business plan tailored for a fruit and vegetable market.

Creating a solid business plan is crucial for any aspiring entrepreneur. It serves as a roadmap, outlining your vision, objectives, and the strategies you'll employ to turn your fresh produce venture into a thriving business.

To jumpstart your planning process with ease and precision, feel free to utilize our fruit and vegetable market business plan template. Our team of experts is also on standby to provide a free review and fine-tuning of your plan.

How to draft a great business plan for your fruit and vegetable store?

A good business plan for a fruit and vegetable market must cater to the unique aspects of this type of retail business.

Initially, it's crucial to provide a comprehensive overview of the market landscape. This includes up-to-date statistics and an exploration of emerging trends within the industry, similar to what we've incorporated in our fruit and vegetable market business plan template .

Your business plan should articulate your vision clearly. Define your target demographic (such as local residents, restaurants, or health-conscious consumers) and establish your market's distinctive features (like offering organic produce, exotic fruits, or locally-sourced vegetables).

Market analysis is the next critical component. This requires a thorough examination of local competitors, market dynamics, and consumer buying patterns.

For a fruit and vegetable market, it's imperative to detail the range of products you intend to sell. Describe your selection of fruits, vegetables, herbs, and any additional items you plan to offer, and discuss how these choices align with the preferences and needs of your customer base.

The operational plan is equally important. It should outline the location of your market, the layout of the retail space, your supply chain for fresh produce, and inventory management practices.

Given the nature of a fruit and vegetable market, it is vital to highlight the freshness and quality of your produce, your relationships with growers and suppliers, and adherence to health and safety standards.

Then, delve into your marketing and sales strategies. How do you plan to attract and keep customers coming back? Consider your approach to promotions, customer loyalty programs, and potential value-added services (like home delivery or a juice bar).

Incorporating digital strategies, such as an online ordering system or a robust social media presence, is also crucial in the modern marketplace.

The financial section is another cornerstone of your business plan. It should encompass the initial investment, projected sales, operating expenses, and the point at which you expect to break even.

With a fruit and vegetable market, managing waste and understanding the shelf life of products are critical, so precise planning and knowledge of your financials are essential. For assistance, consider using our financial forecast for a fruit and vegetable market .

Compared to other business plans, a fruit and vegetable market plan must pay closer attention to the perishability of inventory, the importance of a robust supply chain, and the potential for seasonal fluctuations.

A well-crafted business plan not only helps you to define your strategies and vision but also plays a pivotal role in attracting investors or securing loans.

Lenders and investors are keen on a solid market analysis, realistic financial projections, and a comprehensive understanding of the day-to-day operations of a fruit and vegetable market.

By presenting a thorough and substantiated plan, you showcase your dedication and readiness for the success of your venture.

To achieve these goals while saving time, you are welcome to fill out our fruit and vegetable market business plan template .

A free example of business plan for a fruit and vegetable store

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a fruit and vegetable market .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The fruit and vegetable market is an essential and robust component of the global food industry.

Recent estimates value the global fruit and vegetable trade at over 1 trillion dollars, with expectations for continued growth as consumers seek healthier eating options. In the United States, the fruit and vegetable industry contributes significantly to the economy, with thousands of markets and stores providing a wide range of produce to meet consumer demand.

These statistics underscore the critical role that fruit and vegetable markets play in not only providing nutritious food options but also in supporting local agriculture and economies.

Current trends in the fruit and vegetable industry indicate a shift towards organic and locally sourced produce, as consumers become more health-conscious and environmentally aware.

There is an increasing demand for organic fruits and vegetables, driven by the perception of better quality and concerns about pesticides and other chemicals. The local food movement is also gaining momentum, with consumers showing a preference for produce that is grown locally to support community farmers and reduce carbon emissions associated with transportation.

Technological advancements are influencing the industry as well, with innovations in vertical farming and hydroponics allowing for more sustainable and space-efficient growing methods.

Online grocery shopping and delivery services are expanding, making it easier for consumers to access fresh produce directly from their homes.

Additionally, the push for transparency in food sourcing continues to grow, with consumers wanting to know more about where their food comes from and how it is grown.

These trends are shaping the future of the fruit and vegetable market, as businesses strive to meet the evolving preferences and values of modern consumers.

Success Factors

Several key factors contribute to the success of a fruit and vegetable market.

Quality and freshness of produce are paramount. Markets that offer a wide variety of fresh, high-quality fruits and vegetables are more likely to build and maintain a dedicated customer base.

Diversity in product offerings, including exotic or hard-to-find produce, can differentiate a market from its competitors.

Location is also vital, as markets that are easily accessible to consumers will naturally attract more foot traffic.

Customer service is another important aspect, with knowledgeable and friendly staff enhancing the shopping experience and encouraging repeat visits.

Effective cost management and the ability to adapt to changing consumer trends, such as the demand for organic and locally grown produce, are crucial for the long-term viability of a fruit and vegetable market.

The Project

Project presentation.

Our fruit and vegetable market project is designed to cater to the increasing consumer demand for fresh, organic, and locally-sourced produce. Situated in a community-focused neighborhood, our market will offer a diverse selection of fruits and vegetables, emphasizing seasonal and organic options. We will partner with local farmers and suppliers to ensure that our customers have access to the freshest produce available, supporting sustainable agricultural practices and reducing our carbon footprint.

We aim to provide not just produce, but a holistic healthy eating experience by offering a range of complementary products such as herbs, spices, and artisanal condiments. Our market will be a hub for health-conscious consumers and those interested in cooking with the finest ingredients.

Our fruit and vegetable market is set to become a cornerstone in the community, promoting healthier lifestyles and fostering connections between local producers and consumers.

Value Proposition

The value proposition of our fruit and vegetable market lies in our commitment to providing the community with the highest quality fresh produce. We understand the importance of nutrition and the role that fruits and vegetables play in maintaining a healthy diet.

Our market will offer a unique shopping experience where customers can enjoy a wide variety of produce, learn about the benefits of incorporating more fruits and vegetables into their diets, and discover new and exotic varieties. We are dedicated to creating a welcoming environment where everyone can find something to enrich their meals and support their well-being.

By focusing on local and organic sourcing, we also contribute to the sustainability of our food systems and the prosperity of local farmers, aligning our business with the values of environmental stewardship and community support.

Project Owner

The project owner is an individual with a profound passion for healthy living and community engagement. With a background in agricultural studies and experience in the food retail industry, they are well-equipped to establish a market that prioritizes quality and freshness.

They bring a wealth of knowledge about the seasonality and sourcing of produce, and are committed to creating a marketplace that reflects the diversity and richness of nature's offerings. Their dedication to health, nutrition, and sustainability drives them to build a market that not only sells fruits and vegetables but also educates and inspires the community to embrace a healthier, more sustainable lifestyle.

Their vision is to create a space where the joy of fresh, wholesome food is accessible to all, and where the market serves as a vibrant gathering place for people to connect with their food and each other.

The Market Study

Market segments.

The market segments for this fruit and vegetable market are diverse and cater to a wide range of consumers.

Firstly, there are health-conscious individuals who prioritize fresh, organic produce in their diets for wellness and nutritional benefits.

Secondly, the market serves customers who are looking for locally-sourced and seasonal produce to support community farmers and reduce their carbon footprint.

Additionally, the market attracts individuals with specific dietary needs, such as vegans, vegetarians, and those with food sensitivities who require a variety of fresh produce options.

Culinary professionals, including chefs and caterers, represent another segment, seeking high-quality ingredients to enhance their dishes.

SWOT Analysis

A SWOT analysis of the fruit and vegetable market project highlights several key factors.

Strengths include a strong focus on fresh, high-quality produce, relationships with local farmers, and a commitment to sustainability and eco-friendly practices.

Weaknesses might involve the perishable nature of inventory, the need for constant supply chain management, and potential seasonal fluctuations in product availability.

Opportunities exist in expanding the market's reach through online sales and delivery services, as well as in educating consumers about the benefits of eating fresh and local produce.

Threats could include competition from larger grocery chains with more buying power, adverse weather affecting crop yields, and potential economic downturns reducing consumer spending on premium produce.

Competitor Analysis

Competitor analysis in the fruit and vegetable market sector indicates a varied landscape.

Direct competitors include other local markets, organic food stores, and large supermarkets with extensive produce sections.

These competitors vie for customers who value convenience, variety, and price.

Potential competitive advantages for our market include superior product freshness, strong community ties, exceptional customer service, and a focus on sustainable and ethical sourcing.

Understanding the strengths and weaknesses of these competitors is crucial for carving out a niche and ensuring customer loyalty.

Competitive Advantages

Our fruit and vegetable market's dedication to offering the freshest and highest quality produce sets us apart from the competition.

We provide a wide array of fruits and vegetables, including rare and exotic items, to cater to the diverse tastes and needs of our customers.

Our commitment to sustainability, through supporting local farmers and minimizing waste, resonates with environmentally conscious consumers.

We also emphasize transparency and education about the source and benefits of our produce, fostering a trusting relationship with our clientele.

You can also read our articles about: - how to open a fruit and vegetable store: a complete guide - the customer segments of a fruit and vegetable store - the competition study for a fruit and vegetable store

The Strategy

Development plan.

Our three-year development plan for the fresh fruit and vegetable market is designed to promote healthy living within the community.

In the first year, our goal is to establish a strong local presence by sourcing a wide variety of high-quality, seasonal produce and building relationships with local farmers and suppliers.

The second year will focus on expanding our reach by setting up additional market locations and possibly introducing mobile market services to access a broader customer base.

In the third year, we plan to diversify our offerings by including organic and exotic fruits and vegetables, as well as implementing educational programs on nutrition and sustainable agriculture.

Throughout this period, we will be committed to sustainability, community engagement, and providing exceptional service to ensure we become a staple in our customers' healthy lifestyles.

Business Model Canvas

The Business Model Canvas for our fruit and vegetable market targets health-conscious consumers and those looking for fresh, local produce.

Our value proposition is centered on offering the freshest, high-quality fruits and vegetables, with a focus on local and organic options, and providing exceptional customer service.

We will sell our products through our physical market locations and consider an online ordering system for customer convenience, utilizing our key resources such as our relationships with local farmers and our knowledgeable staff.

Key activities include sourcing and curating produce, maintaining quality control, and engaging with the community.

Our revenue streams will be generated from the sales of produce, while our costs will be associated with procurement, operations, and marketing efforts.

Access a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on community engagement and education.

We aim to highlight the health benefits of fresh produce and the environmental advantages of buying locally. Our approach includes community events, cooking demonstrations, and partnerships with local health and wellness organizations.

We will also leverage social media to showcase our daily offerings, share tips on healthy eating, and feature stories from our partner farmers.

Additionally, we plan to offer loyalty programs and seasonal promotions to encourage repeat business and attract new customers.

Risk Policy

The risk policy for our fruit and vegetable market focuses on mitigating risks associated with perishable goods, supply chain management, and market fluctuations.

We will implement strict quality control measures and develop a robust inventory management system to minimize waste and ensure product freshness.

Building strong relationships with a diverse group of suppliers will help us manage supply risks and price volatility.

We will also maintain a conservative financial strategy to manage operational costs effectively and ensure business sustainability.

Insurance coverage will be in place to protect against unforeseen events that could impact our business operations.

Why Our Project is Viable

We believe in the viability of a fruit and vegetable market that prioritizes freshness, quality, and community health.

With a growing trend towards healthy eating and local sourcing, our market is well-positioned to meet consumer demand.

We are committed to creating a shopping experience that supports local agriculture and provides educational value to our customers.

Adaptable to market trends and customer feedback, we are excited about the potential of our fruit and vegetable market to become a cornerstone of healthy living in our community.

You can also read our articles about: - the Business Model Canvas of a fruit and vegetable store - the marketing strategy for a fruit and vegetable store

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a fruit and vegetable market and our financial plan for a fruit and vegetable market .

Initial expenses for our fruit and vegetable market include costs for securing a retail space in a high-traffic area, purchasing refrigeration units and display equipment to maintain and showcase fresh produce, obtaining necessary permits and licenses, investing in a robust inventory management system, and launching marketing initiatives to attract customers to our location.

Our revenue assumptions are based on an in-depth analysis of the local market demand for fresh, high-quality fruits and vegetables, taking into account the increasing trend towards healthy eating and organic produce.

We expect sales to grow steadily as we establish our market's reputation for offering a wide variety of fresh and locally sourced produce.

The projected income statement outlines expected revenues from the sale of fruits and vegetables, cost of goods sold (including procurement, transportation, and storage), and operating expenses (rent, marketing, salaries, utilities, etc.).

This results in a forecasted net profit that is essential for assessing the long-term viability of our fruit and vegetable market.

The projected balance sheet will reflect assets such as refrigeration and display equipment, inventory of fresh produce, and liabilities including any loans and operational expenses.

It will provide a snapshot of the financial condition of our market at the end of each fiscal period.

Our projected cash flow statement will detail all cash inflows from sales and outflows for expenses, helping us to predict our financial needs and ensure we have sufficient funds to operate smoothly.

The projected financing plan will outline the sources of funding we intend to tap into to cover our initial setup costs and any additional financing needs.

The working capital requirement for our market will be carefully managed to maintain adequate liquidity for day-to-day operations, such as purchasing fresh stock, managing inventory, and covering staff wages.

The break-even analysis will determine the volume of sales we need to achieve to cover all our costs and begin generating a profit, marking the point at which our market becomes financially sustainable.

Key performance indicators we will monitor include the turnover rate of our inventory, the gross margin on produce sales, the current ratio to evaluate our ability to meet short-term obligations, and the return on investment to gauge the profitability of the capital invested in our market.

These metrics will be instrumental in assessing the financial performance and overall success of our fruit and vegetable market.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a fruit and vegetable store .

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