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It might be difficult to believe, but one of the sectors with the greatest growth rates worldwide is second-hand apparel. The industry is growing at an astounding 25% annually, therefore the time is now to open your own consignment store and ride this wave of success. 

But first, you’ll need to learn how to start and manage a business before you hang your “OPEN” sign. Fortunately, this step-by-step manual provides all the details you require to launch your own consignment shop. 

Step 1: Find Out if this is the Right Business for You?

Consignment stores essentially get paid for selling the goods of other people. People bring in unwanted shoes, clothes, household items, and antiques, which the shop then sells for an agreed-upon price and keeps a portion of the sale, often about 50%.

But before choosing if opening a consignment business is the correct move for you, weigh the advantages and disadvantages.

Positives Vs Negatives

Select a physical or online consignment shop from the available business models.

Good Margins: Receive 50% of the sale price and don’t pay for inventory until it sells.
Hot Market: There is a growing interest in vintage and used apparel.
Build up inventories in anticipation of a delayed opening.

A crowded market suggests there is a lot of rivalry.
  • The value of the worldwide used clothes market is $119 billion, growing 24% from 2021. Industry size and historical growth.
  • Forecast for growth: By 2026, it’s expected that the world’s second-hand clothes market would have grown by over twofold, reaching $218 billion.
  • The fastest-growing market sector is online clothes resale, which is projected to triple by 2026.
  • 244 million US shoppers declared their willingness to purchase used apparel in 2021.

Cost of Starting Consignment Business

It will cost roughly $2,500 to launch an online consignment business. Your expenses will include those for a website and marketing. It will cost roughly $13,000 to open a physical consignment store.

Is Consignment  Business Profitable?

Items on consignment will have varying prices. These calculations will use an average item price of $300, of which you’ll receive 50%, as you’ll be hunting for high-end products to sell. Your profit margin, after marketing expenses and paying the consignor, will be roughly 40% if you operate an online consignment shop. 

You may make $156,000 in your first two years or so by selling 10 products every week. If the 40% margin is accurate, this would result in a profit of $62,000. Sales might reach 30 products each week if your website gains more visitors. Your outstanding profit would be $187,000 on a $468,000 yearly revenue.

Entry Barriers

  • A consignment shop’s sole entry hurdle is the competition you’ll encounter.

Step 2: Create a Strategy

You should develop your idea in order to compete in a crowded market now that you are aware of the requirements for opening a consignment business. 

Even if you are already certain that your product or service is ideal, market research will give you the upper hand. It’s crucial to conduct market research since it may help you better understand your clients, your rivals, and your industry.

Identify a Gap

Examine the merchandise, pricing, and customer feedback of consignment stores in your neighborhood and online. You’re aiming to fill a market gap. For instance, it’s possible that a consignment shop that sells furniture and other home things is missing from the market.

Your word-of-mouth advertising may pick up steam as a result, drawing customers in immediately. 


You must decide if you want to concentrate on selling apparel or some other kind of product. You might also run a portion of your business as an online or brick-and-mortar thrift shop, selling donated items as well as things you find at garage sales, in addition to consignment products. In your business, you could also have a retail section where you offer products you’ve bought at wholesale prices. 


Prices will change according on the item and its retail cost. You should strive for a profit margin of roughly 40% for an internet business after paying consignors and marketing expenses.

To calculate your markup and final price points after knowing your costs, utilize our Step By Step Profit Margin Calculator. Keep in mind that the prices you employ at launch should be flexible and subject to adjustment as the market demands.

Target Market

Your target audience will be large, therefore you should diversify your marketing by using platforms like Facebook, Instagram, and TikTok. 


To draw consumers and guarantee the success of your consignment business, the location is essential. Look for a location in a bustling downtown area or a prominent retail zone that has plenty of foot traffic and strong visibility.

Take into account accessibility and convenience, making sure the location is simple to access by public transit and has plenty of parking. To choose a site that can serve a variety of consumers, consider the area demographics as well. Sites like Craigslist, Crexi, and Instant Offices are good places to look for rental opportunities for business space in your region.

You might wish to abide by these general guidelines while selecting a commercial space:

  • Accessible by public transportation in a central location
  • With plenty of natural light and ventilation
  • As your firm expands, your lease might be made more accommodating.
  • A facility that is ready to use and doesn’t require any substantial upgrades or repairs

Step 3: Write a Business Plan

Every organization requires a plan. This will serve as a manual to help you launch your firm and stay focused on your major objectives. A business plan also aids in the better understanding of your firm and its goals by possible investors and partners:

  • A concise executive summary of the full business plan should be created when it has been completed.
  • Business overview: A description of the organization’s vision, purpose, ownership, and goals.
  • Please include a detailed description of your products and services.
  • SWOT analysis and market analysis are two ways to analyze market trends, including differences in demand and development potential.
  • Competitive Analysis: Examine your top rivals, identifying their strong points and areas for improvement. Then, outline the benefits of your offerings.
  • Sales and marketing: Consider your firms’ USPs when you create sales, marketing, and promotional plans.
  • Overview of the management team, including a description of each member’s responsibilities and history in the business.
  • Operations Plan: Your company’s operational plan covers logistics, office location, essential assets, and other information like purchasing.
  • Financial Plan: A three-year financial plan that includes initial expenses, break-even calculations, projected profits and losses, cash flow, and a balance sheet.
  • Add any extra financial or business-related papers to the appendix.

Step 4: Create a Marketing Plan

You should still spend in digital marketing even though some of your customers will be passing byers or internet visitors. For new firms, spreading the word is crucial since it will increase brand and client recognition. 

Once it’s up and running, connect your social media accounts to your website and vice versa. Social media is a fantastic tool for company promotion since you can make interesting postings that promote your goods: 

  • Facebook is a great tool for paid advertising since it lets you target particular demographics, such as males in the Cleveland region under 50.
  • Similar advantages to Facebook, but with a different audience for Instagram.
  • Website: SEO will assist in moving your website up in relevant search results, which is essential for boosting sales. Make sure your website is optimized for calls to action. Try different combinations of text, color, size, and positioning for calls to action like “Buy Now.” This may significantly boost purchases.
  • Google and Yelp: Listing on Yelp and Google My Business might be essential to attracting consumers for companies that depend on local clients.
  • Signage – Place striking signs at your shop and online.
  • Flyering: Hand out fliers throughout your neighborhood.
  • Send consumers and prospects regular emails as part of your email marketing and newsletter strategy. Personalize them.
  • begin a blog – Create a blog and publish frequently. Share on many websites and vary your material.
  • Make press releases on new items, promotions, etc.
  • Paid social media advertisements: Use sites that can help you contact your target audience and run focused advertising.
  • Use Google AdWords for pay-per-click marketing to rank higher in search results. Do some keyword research beforehand.
  • Influencer marketing: Pay users on social media with a sizable following to promote your consignment shop. Micro-influencers are those with smaller audiences and cheaper charges.