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.
Okay, so we have considered all the requirements for starting a consignment shop. We also took it further by analyzing and drafting a sample consignment shop marketing plan template backed up by actionable guerrilla marketing ideas for consignment shops. So let’s proceed to the business planning section.
Why Start an Consignment Shop?
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.
Starting a consignment shop just is not an easy task. You need to understand the basic skills needed to operate a retail business. You need to have good communication skills and good human approach. You need to be able to understand and serve your customers very well.
You also need to write down you business plan to serve as not just a document but a plan that guides your business. You need to be focused and zealous to be able to survive in this business. Here is a sample plan for your use;
A Sample Consignment Shop Business Plan Template
- Business 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 2021.
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.
Consignment Shop Business Plan – 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.
- 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
- Roof racks
- Cookware and stoves, and much more
Our 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 Statement
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
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
- 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.
Sales and Marketing Manager
- 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,
Consignment Shop Business Plan – 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.
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.
Consignment Shop Business Plan – MARKET ANALYSIS
- Market Trend
It has been estimated that the retail sporting goods industry will rise with a CAGR of 3.4% over 2016-2020. 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.
- 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.
Consignment Shop Business Plan – SALES AND MARKETING STRATEGY
- Marketing 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
Consignment Shop Business Plan – Publicity and Advertising strategies
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
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;
- Fleece outerwear.
- Rain gear, waterproof as well as coated nylon.
- Thermal underwear.
- Synthetic clothing for sports or travel
- Sleeping bags
- Sleeping pads
- Duffel bags
- Roof racks
- Cookware and stoves, and much more.
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
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
Consignment Shop Business Plan – Financial Projection and Costing
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.
Consignment Shop Business Plan – 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.
- 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