How to start a Consignment Store Business

If you have always desired to run a retail shop, but did not have the financial resources to do so, then starting a consignment shop business may be the perfect way to satisfy your desire, but keep it within your budget. Opening a consignment shop isn't as costly as opening a regular retail store because you do not need to purchase the merchandise you are selling. Your inventory is free, and you only split the profits once a sale is completed.

Before opening your consignment business, you will need to determine what kinds of items you will want to sell. You should focus on items you are knowledgeable about and would enjoy dealing with on a daily basis. Finding a niche that isn't currently being served in your area is an ideal way to help you narrow down what kind of consignment store you should open. Some consignment shops only focus on children's and baby items; like clothing, strollers, high chairs and toys. Other consignment stores focus on just antiques and collectibles or high-end designer label couture clothing. Just make sure whatever speciality area you pick, will have a demographic large enough to support you niche. Opening a baby goods consignment business may flop in an area that is primarily populated with retirees, and a high end couture shop won't flourish in a town - where being overtly conspicous about designers brands in frowned upon.

You must know your products well, because the key to running a successful consignment business is by correctly pricing your items. A general rule of theumb is that consignment items are typically priced 35% to 50% off of the
retail or original price. If you mis-price your inventory - you run the risk of other overpricing items, and naver making a sale - or underpricing the goods and giving away potential profits.

Running a consignment business is just as challenging as running a new item retail store, but can be more fun and rewarding because you will constantly have new inventory to work with in a daily to weekly basis and your financial risks in opening such a business are much lower.

Starting a Consignment Store business can be fun, exciting and very rewarding. If you are considering starting your own Consignment Store business, be sure to read the following advice so that you can shorten your learning curve, minimize your risk, and start generating income quickly.

Read on to learn how to start your own Consignment Store business in 10 easy steps.

1. Write A Business Plan.

Writing a business plan for your small business is key in getting your new Consignment Store Service venture off to the its best start. Lenders won't even consider your request for a loan without a written business plan in hand. Also, the process of preparing a business plan forces you as an entrepreneur to consider every aspect of the company's operations. Don't skimp on this crucial step.

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2. Choose A Company Name.

When choosing a company name, pick a name that easily fits into a web address or domain name. Your web address should be easy to type, simple but catchy. Every business has an internet presence nowadays. You must be sure that your Consignment Store business is on the internet as well. Once you pick a company name for your Consignment Store business, make sure to register the domain name quickly, before someone else does. You may also want to get not only the .com version of the name, but the .biz and .info versions as well, so that competitors don't encroach on your business by grabbing your domain with a different extension. You may regret not having these additional domains when your company grows and becomes successful.

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3. Incorporate Your Business.

One of the primary advantages to incorporating your Consignment Store business is the fact that you can then enjoy limited liability. As a sole proprietorship, of a Consignment Store business owner, you assume all the liability of the company. Your personal assets, such as your house and car can be seized to pay the debts of your business.
When you incorporate your Consignment Store business, you become a shareholder in the corporation. As a shareholder in the corporation, you can't be held responsible for the debts of the corporation. Your liability as an individual shareholder of the Consignment Store business is limited to the amount you have invested in the company. In today's litigious society, it is best to protect yourself, and separate your personal assets from the Consignment Store's company assets.

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4. File For A Tax Identification Number.

There are several types of tax id numbers:

*A Federal EIN Number - The Federal Tax Identification Number is used to identify a business entity and is required for employers and corporations as well as partnerships.

*A State Sales Tax Id - Sales tax id number or sales tax exemption certificate is a legal document issued by the state. This certificate of authority gives your business the authority to collect the required sales and use taxes, and to issue appropriate sales tax exemption documents, including resale certificates used for purchasing inventory

*A State EIN Number - A state specific Tax Identification Number. Check your state regulations to see if it is required.

5. Examine Your Competition.

Examine your competition in the Consignment Store industry - your clients will. Compare your business ideas against your competitors. Determine what are your strengths and weaknesses are. Compare them and determine how to strengthen your weaknesses and how to emphasize your strengths. Your clients will compare your Consignment Store services with others before choosing - so make sure you offer your clients a service they can't refuse.

6. Calculate Your Fees.

Since you will be working on your own you will need to determine your wages. Keep in mind that you will need to pay for self-employment taxes, insurances, supplies and education. Make sure when calculating your fee to include all of your expenses and what you need to make a profit. Make sure your rates are competitive or you can justify why you are charging more than your competitors. Remember, your potential clients aren't always looking for the cheapest Consignment Store business. They want dependability, relaibility and genuine quality service from a skilled and professional Consignment Store.

7. Get A Logo.

A logo is also a very important element for your Consignment Store business. A logo clearly sets the tone and presents a graphic representation of your business and it’s value - providing your Consignment Store business with an extra level of professional presence. You need to provide your clients with a sense of legitamacy, as they will be entrusting you with their Consignment Store business needs.
A great logo should be eye catching and visually appealing, without being too garish or flashy. Hiring a professional to design your Consignment Store company logo is a wise choice, because a logo is often the first impression a potential client will get of your Consignment Store services. So it is best to have a professional design it, who can create a timeless and balanced look that can stand as your business identity for years to come.

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8. Create A Website.

Hire a website developer or use one of the many do-it-yourself online companies that offer you an assortment of website templates, where you can enter your own content. Be sure to choose a template that relates to the Consignment Store industry.

Keep your website simple and to the point. Start with a home page, which describes your business and the services you offer. Then include a page that provides your professional biography and credentials as well as a photo. A web form that allows potential clients to enter their information for quote by phone is a nice feature. Don't forget a page that provides your contact information. Include a payment form where clients can pay for your services using a credit card or electronic check, if advance payment or a deposit for your services is required.

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9. Find Clients.

You will need to advertise, market and promote your Consignment Store business in order to attract clients. Make sure to prepare a budget for maintaining your a website, getting business cards, ordering fliers, and sending out a press releases. Offering a special incentive to your first clients could help speed up your client acquisition process.

10. Keep Learning.

Stay current within your field of Consignment Store. Sign up for free newsletters and subscribe to magazines and newspapers designed for those in the Consignment Store industry. This will help you stay in touch with the newest trends in the Consignment Store business world. The more knowledgeable you are about Consignment Store, the more likely to you are to succeed.

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