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How to Start a Consignment Store Business

How to Start a Consignment Store Business PhotoTo start a business has been the dream of many people around the world, whether it is a novelty store or an online consignment shop. If you are one of those people who are planning to have their own consignment business, what you need to do first is to know the in’s and out’s.

Definitions

A consignment is a business wherein reselling is the main focus. According to an online business dictionary, consignment is selling a product to a customer with an involvement of another person in which the ownership of the products still lies with the owner’s name. There are three people involved in this business, which are the consignor, consignee and customer.

Consignor is the one who owns the items or products being sold, the consignee is the one who sells the products, and the customer is the one who buys the products. If you are the consignee, you don’t have legal ownership with the products that you will be selling.

The most common products and items being offered and sold in online consignment stores are clothes, gadgets and house wares. Other shops offer artworks, memorabilia and antiques.

Getting started with the business

A consignment store is just like any other store, a good business plan is always the best plan to start with. You need to start with doing some research about the business especially the products and items you will be re-selling. You also need to look for a reliable consignor and should know if the products will be in demand and profitable in your area once your business started.

Afterwards, you need to create your own business plan. This business plan should contain the goals, vision and mission, and projects of your store. You should also consider making your store an online shop, which is advisable especially with the high demand in the use of internet nowadays. But if you prefer to have a physical store located in your area, make sure that the location is somewhere accessible by most of your customers such as malls, shopping centers and parks.

The next thing you need to do is to register your business. Always remember that a legal business is a good business. This will protect you as a consignee as well as it will protect your customers. Familiarize yourself with the Uniform Commercial Code (UCC) in your state to know your rights with regards to your consignment business.

The most important thing with your consignment business lies with marketing and advertising. If you are planning to run an online store, you can definitely take advantage of social media and the internet. Using the traditional way is also a good idea.

Running the business

Once your business started running, management of finances will be crucial. Planning for payment plans ahead of time is advisable as well. When you made terms and conditions with the consignor, make sure that you have plans regarding the fair split of money. Usually the split with the revenue is 60% for the consignor while 40% for the consignee.

Another thing you need to do is bookkeeping and inventorying of products as well as updating the consignor about the status of his or her products. This will result to less discrepancies and disagreements between the two of you. A good business relationship can help in the success of your business.

Business practicality

During the time you are planning to start the business up to the time you are managing the business, there will always a question that will pop up in your mind. This question is about deciding whether it is practical to continue the business or just close it. This thing is unavoidable especially in unstable economy.

When the time comes that you need to decide, the best thing that you can do is to do research once again. Ask around you, inquire and meet up with various business owners and entrepreneurs. You can also do some online reading to see how other consignees are doing with their business. This may help you settle a peaceful mind.

Just like any other business, consignment stores need proper management. The success of your business purely lies within yourself as well as in how you start the business. Once you’re ready, gear up and do it well.