To set prices for items, consignment shops take into consideration factors like the brand of the item, its condition, the original retail value, as well as the current market demand. Together, these factors are used to determine the overall price of the item.
However, there isn’t a one-size-fits-all approach to this because, at the end of the day, consignment stores only want to sell the item at a variable price to ensure that they can take a commission of around 40%, resulting in a 60/40 split.
Consignment shops are more or less partnerships between the shop owner (consignee) and individuals (consignors) who make available items for sale.
Note that the whole transaction starts at the point a person who is looking to sell their items brings them to the consignment shop.
These items might include anything from clothing, accessories, furniture, artwork, and more. The consignment shop at that point evaluates the items’ condition, quality, and marketability.
If the item satisfies the shop’s criteria, both parties enter into a consignment agreement that stipulates the terms of the partnership (normally it differs by shop).
After the agreement is reached, it falls on the consignment shop to prepare the items for sale. This will often encompass cleaning, repairing, or styling the items to boost their marketability.
The items afterward are then displayed in the consignment shop — either in-store or online — with prices set by the shop owner based on factors such as the item’s condition, brand, and demand.
At the very beginning, you are bound to make mistakes, but you shouldn’t let it discourage you. If you price your items too low, someone will find a bargain — and it simply means that they will be back in no time, and they will tell their friends.
But if you price an item too high, you can always mark it down later. Howbeit, pricing items can take up a lot of your time. To ensure you can learn the ropes faster, create guidelines for yourself.
How to Set Prices For Consignment Shop Items?
Refrain from Pricing Immediately
In this line of business, consignors will come into your store at all hours of the day. If you decide to focus all your energy and attention on just them, you won’t be able to attend to other buying customers or even attend to those who are looking to submit new items.
Aside from that, it can lead to inaccurate pricing. After all, it’s quite daunting to appraise an item honestly when you’re feeling rushed.
Owing to that, always give 24 hours before reaching out to a consignor with a price for their items. Note that this means that you will have adequate time to inspect the item and decide on a price properly.
Leverage eBay as a Reference, Not a Rule
You should never believe or concur when you hear a consignor say “Well I saw it listed on eBay for…”. In this line of business, this line is popular among consignors who are looking to rip consignment shop owners or managers. eBay isn’t always a reliable reference.
Although the site is renowned as a viable source of information, it’s necessary to note that anyone can list anything for any price on eBay, and this makes it highly subjective.
As such, when researching an item on eBay, be sure to evaluate the average price an item goes for, rather than just the prices of the top few listings. This will surely give you a comprehensive idea of how to sell the item.
Price to Sell, Not to Sit
Consignment businesses are known to do well primarily because a whole lot of inventory passes through the door. It simply entails that customers have access to a wide range and selection of items, which they might not have the opportunity to find anywhere else.
It as well means that to attain success, you have to price items to move, rather than to sit on your shelves forever. Owing to that, auto discounts and expiration dates have become prevalent among consignment stores, and they’re both a huge factor when determining how to price an item.
Normally and with all things being equal, you can price an item as high as possible, but when you have to contend with keeping the inventory moving, you have to price an item to sell.
Although this might entail sacrificing a few bucks on a sale, it’ll ensure that you can stock more merchandise and sell things more quickly.