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Tips on Starting a Resale Shop 
by Tracy Rose June 10, 2005

Learn basic strategies for starting and operating a resale store based on consignments.

Most families are on a tight budget these days, trying to reduce their debt and looking for ways to stretch a dollar. Yet there is always a need for new stuff. A good place to find lightly used items from clothing and furniture to rare items is a resale shop. If you have a knack for finding deals, owning a resale shop is a great way to pass along those deals. There are some things that need to be considered before entering a resale business venture though.

Percentages for Consignors

Starting out, you will most likely need to accept items on consignment. Consignors are the people who bring their new and used items for you to sell. They get a share of the sales price on each item and so does the business. A plan needs to be developed to explain how consignment sales will be split. Will you choose a 50/50 or a 60/40 split, for example? Then decide how you will pay the consignors. Will they be able to collect cash, check or in-store credit? Is there a limit as to how much you will pay out?


Once you have decided on how much to offer your consignors for their items, all of this needs to be put in writing. Write a clear, concise statement to explain what items will be accepted and which items will not. To protect both the business and the seller, all policies should be detailed, printed and signed by both parties. Providing such contracts will show your professionalism.

Rental Space

Location, location, location. The resale shop should be a highly visible site with a lot of traffic and easy parking. Choosing the location of a resale shop can be tricky. Carefully pick a spot where there is a mix of incomes. A consignment shop will attract various types of people who are buying used items. Some are only interested in saving money, while others are in search of just the right item they have been looking for. The same is true for potential consignors. Some clients desperately need the money and will bring in heaps of stuff in hopes that you will accept some of it, while others have designer items in excellent condition and they expect top dollar for them. A demographic study is recommended.

While you can start out small, with 700 square feet or more, be sure you will have enough room for display units, clothing racks, and big ticket items such a furniture, electronics, toys, outdoor equipment, etc. Plenty of shelves and a lot of workspace are needed, as well. It is necessary to have a holding space where you can sort incoming consignments, outgoing consignments, accepted items and items being held that can’t be accepted. Being highly organized and creative with the displays will certainly help.



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