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How Much Can You Make Owning a Consignment Shop?

Do you want to know how much money consignment shops make monthly? If YES, here is an analysis of the income potential of consignment shop business owners.

A consignment shop sells goods for consignors – individuals who pay a fee to a shop owner to sell their goods. These stores may only sell specific items or contain everything from furniture to clothing. Starting and running a consignment shop on paper could sound so easy, but to successfully start and manage a consignment shop, you need to possess extensive retail knowledge and adequate funding.

How Much Money Can You Make Owning a Consignment Shop

Revenue from consignment shops vary greatly and depends on many things. According to industry reports, bigger resale stores like Goodwill Industries generated $5.37 billion from its 2,000 stores in 2014. While other big fishes like Crossroad’s Trading Company earned 20 million dollars in sales from its 32 locations in 2012.

Reports also have it that most consignment shops in the united states made less than 250,000 dollars in 1993, but those figures have since grown massively as the popularity of consignment stores has grown due to eco-conscious consumers.

As of 2012, the average annual revenue of a consignment shop was around $120,000 per worker. The model of this business eradicates costly inventory purchasing and carrying costs associated with other retail businesses, since consignment stores do not buy any of the inventories they sell. Instead these products are brought to the shop by the seller and owned by the seller until the sale occurs.

How Do Consignment Shops Make Money?

Most of these shops may charge an upfront fee to show items, take a fixed percentage of each sale, or it may do both. Note that the amount you charge depend on the product. In most cases, the items you sell are used and may not command that much of a price.

However, don’t forget the amount you have to pay the consignor. That price needs to be agreed upon before you accept the item.

What Percentage Do Consignment Shops Take?

Consignment shops take 25 percent to 60 percent of what the item sells for. Thus, if a person consigns a cocktail dress for $500, the consignment shop owner would get up to 60 percent of that cost, depending on what your agreement with the consignor is.

Also note that Consignment stores generally charge from 25 percent to 60 percent of the sales price of a sold item. Note that a good location with heavy foot traffic contributes to increased walk-in sales. A bigger shop allows more room for merchandise and with no inventory costs, more items available means added opportunity for a sale.

Enticing buyers to return with items they want to sell creates a double revenue stream from the same customer and increases the merchandise available for sale. Have it in mind that well detailed advertising plan builds awareness and encourages consumers to visit the store, but can also result in an expense that must be subtracted from revenue to determine profit.

How Much Do You Need to Put Up to Get your Consignment Shop Running?

Your Startup costs will range from $2,000 to $10,000. Items needed to start a retail business include a cash register, printer, display racks, cases and shelving, sales software and a storefront space that is traditionally rented or leased. Once the business is operational, fixed expenses paid each month such as electricity, water, payroll and Internet and phone service will to deduct from revenue along with variable costs such as advertising to determine profit.

Controlling expenses contributes to higher profit. Nonetheless, according to reports, the average salary for a consignment shop owner after all the above expenses is $42,000.

If the owner will be receiving a salary, he or she must likely function as the shop manager or handle duties such as scheduling employees, managing the relationship with sellers, reconciling sales, issuing payments to sellers, reviewing merchandise and accepting or declining items brought to the store for sale. In addition to earning a salary, the owner receives the profit from the store after all expenses are paid.

What You Must Know to Succeed and Boost your Income as a Consignment Shop Owner

It is advisable you create a detailed business plan before starting a consignment shop. It will help ensure that you stick to guidelines and budgets in order to minimize the risk in your new business. You also have to specify how you intend to get your shop inventories.

Have it in mind that unlike a regular retail store, you won’t be getting your inventory from popular retail suppliers. Instead, your inventory will be coming from individuals who are looking to sell products to you. A consignment store owner needs to know his or her limitations and must also do well with dealing with people.

It is pertinent that you are able to negotiate business terms, as you will be working with consignors in addition to your customers.

Your ideal customers will be people interested in the type of merchandise you’ve got for sale—more or less the same people who shop at regular retail outlets. Note that the goal should be to attract their attention and sell them the benefits of shopping with you.

Aside normal advertising methods like local radio and newspaper ads, you can host fashion shows for local women’s groups and hand out fliers in front of your shop.

If your shop is located near a business district, you can also deliver your fliers to offices in the area. And don’t forget ads—perhaps with get-acquainted coupons—in your local publication. In the ideal location, a consignment shop could show extensive growth as long as the city has many people who want to put their items on consignment and you have buyers that are willing to purchase those items.

In certain areas, clothing may sell better than furniture, while in other areas, you may do well with non-clothing items, such as furniture and other home and garden items. The advantages to this business are that it’s creative, the cost of starting up is small compared to most retail operations, and you get the satisfaction of helping your customers get great buys for little money.

Additionally, the key to a successful consignment shop is an atmosphere that’s clean, fresh and fashionable, so you’ll need a flair for display and merchandising. You should also have a good eye for current fashion and quality and the ability to properly price your merchandise so that shoppers get the discount they expect and you and your consignees make a profit.

However, before all these, you will need a shop and the display furnishings —glass cases for jewellery, clothes racks, hangers and tables or shelves. You’ll also need sales tickets and tags, shopping bags and a cash register. A computer with an inkjet printer and retail operation software will be a big help but aren’t necessary for starters if you can’t afford them.


Note that you can only generate more income by actively promoting your consignment shop. Promoting your consignment store business is second only to customer service. Leverage social media, send out fliers, and advertise on television if possible.

When you do open, hold a grand opening to entice customers and consignors to come in and see your store. Word of mouth travels fast, whether it’s good or bad, so keep that in mind while you are working with customers and consignors.

Also, take your time to research the type of product that would do well, and whether you would set up as a niche boutique or start out with something less difficult to market.

Note that a niche boutique for a consignment shop can specialize in things like selling sports equipment, dance equipment, hardware, etc. Entice customers by designing window scenes, offering discounts, or even holding a contest to win a product.