How Much Money Can You Make At Consignment?

Is It Worth The Investment?

This is probably the most common question asked when someone is interested in owning a consignment store. The reason for this is that people want to learn how much they can make because if the profit isn't going to be there, is there a reason to invest the time? Asking if the store is worth the investment is not being greedy, it is being a good business person.

The First Year

In the first year, a well-run shop, of average size, can expect to bring in a between $60,000 and $75,000 in gross profit. With the 60/40 split that most consignment contracts are set at, you can expect to bring in about $36,000 to $45,000 in gross profit. From this, overhead will be paid including rent, utilities and payroll.

Over the course of a few years, some consignment shops can bring in $300,000 or more. These stores are generally larger, with a solid customer base that has been built from years of business. To appeal to as many consumers as possible, a consignment store needs to offer products that the entire family can use.

Remember, the larger the store you have, the more merchandise that can get into it and that can mean the more profit you bring in.

What Will Sales Depend On?

Sales will depend on several factors. These factors include:

1. Your location: The better the location you have, the better the walk-in traffic will be. You want customers coming in without having to advertise to them, and being in a great location will do that. If you can get customers without advertising, you are increasing your profit margin.

2. The products you sell: If you only sell clothes, then you are limiting yourself to only one portion of the consumer sector. By selling more diverse goods, you can appeal to more consumers and thereby increase your profits.

3. How fast people know about your shop: The sooner customers know you are there, the sooner they will come in. The longer it takes to get your name out to customers, the longer it is going to take for you to make a profit.

4. The competition: There is going to be competition in your area, but the level and quality of that competition will be what dictates how high your profits are. If you have several large, highly-respected consignment stores in your area, then you are going to have to work hard to take business from them. If you have a handful of small stores throughout the city, with none near your store, you may find that it is easier to make a profit.

Good Days and Bad

With a consignment store, you are going to have good days and bad days in terms of your profit. Some days you will make $50, other days you will make $1,000. It is important not to focus on the individual days, but to look at the week, month or year as a whole. A few bad days may be completely offset by several really good days. If you need to make $200 a day to bring in a profit each week, and from Monday to Thursday you make $100 a day, then you are going to be $400 in the hole by Friday. However, if on Friday you do $600 in sales, you have cleared that hole and are now breaking-even.

Do your best to increase profits on the bad days and just enjoy the good days.

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Buying an Established Consignment Store

Best Days for Consignment Sales

Specializing Your Consignment Shop

Layaway Consignment Policies

Choosing Store Management Software

Resale, Consignment, Thrift and Second-Hand Stores

Locating a Retail Space and Negotiating the Lease

How Much Money Can You Make At Consignment?

A Sample Consignment Agreement

Setting up Your Consignment Shop

Consignment Agreement Policies

Preparing For Your Consignment Store Grand Opening

Creating an Unsold Items Policy

How To Start A Consignment Store

How to Properly Advertise Your Consignment Shop

How Much Money Do You Need To Start A Consignment Store?

Determining Hours of Operation For Your Consignment Store