Resale is one of the more unique industries within retail. Websites such as eBay and Craigslist have helped reshape the image of second-hand goods, and consignment and thrift shops have benefited greatly. Still, navigating around the peculiarities of managing a resale store can be tricky. In this guide, I present five strategies for running an effective resale business.
1. Run Your Store Like a Business
According to Kate Holmes, resale expert and owner of Too Good to Be Threw, one of the most common mistakes of resale business owners is focusing too much on “retail” and not enough on “business.”
“It’s amazing nowadays that shops can afford to treat the business like a hobby,” comments Holmes. “They decorate the store like a home, try to close early and on weekends.”
Cathy Yeomans, owner of the Turns consignment store and president of the Rochester Area Consignment Shops group, has seen a lack of business-sense doom many store owners in their first year. “If you don’t run a resale store like a business, it won’t last,” advises Yeomans.
Many first-time store owners are surprised at how difficult resale is. Some general advice: maintain regular hours; research how to effectively price items to keep consignors, customers and your bookkeeper happy; and market effectively to the community to ensure inventory comes in regularly–and is sold quickly, as well.
2. Align Your Brand with Your Community’s Values
Resale stores act as an extension of the community around it–after all, the inventory of these stores is composed of the community’s discarded goods. Resale store owners must align their store’s image and purpose with the locals they serve.
Holmes says that getting your resale store’s brand ingrained into your community is vital for success: “The more you can get your name into the community, the better.” But aligning your store with the community’s values is equally important. A store in a college community may push an ecological image; a store surrounded by young families may focus on an economical brand.
The goal: “Show that you’re a respected member of the community so you can overcome the stigma that your store is just used merchandise,” advises Holmes.
3. Market According to Your Customer Niche
Focusing your identity and brand is important for marketing, too. Adele Meyer, Executive Director of The Association of Resale Professionals (NARTS), notes that members participate in multiple forms of marketing–from email marketing to social media and Groupon. But it’s important to align marketing and events to the stores’ customer base.
“Holding special events is important, but they have to be catered to your demographic. For example, a store focusing on ladies’ clothing can hold a shopping party or a scarf demonstration,” says Meyer.
The marketing medium to use depends on your store’s customers, too. A store with a younger demographic may want to market more heavily via Twitter, whereas a store focusing on middle-aged women may want to stick to a printed newsletter or a blog. Regardless of the medium, the key is to engage your customers in the way that best resonates with them.
Panache, a vintage store in NY uses Facebook to engage with its customers.
4. Collaborate with Fellow Consignors
Because resale stores have their own niche and each store’s inventory is fluid and unique, other local resale stores really aren’t competitors. In fact, a healthy relationship with other store owners can benefit all parties.
“If a customer comes in and I don’t have what they’re looking for, I give them a brochure and tell them ‘these are the other stores in the area,’” says Yeomans.
Resale store owners can also host joint events for the community, such as bus tours. Yeomans notes that it’s all about making resale fun and at the forefront of shoppers’ minds. “If we can keep people shopping consignment, that’s good for all of us,” remarks Yeomans.
Many communities with a large collection of resale stores have launched organizations to provide resources and partnership opportunities; Rochester has RACS, south Texas has STARS, and Atlanta has Atlanta Consignment Shops, to name a few.
In addition to partnering with other resale stores, national groups such as NARTS provide store owners with member forums, industry statistics, chat rooms and helpful guides. Access to these materials can help resale store owners gain the skills needed for success, such as effective pricing. “In other retail businesses, you’re given the price,” says Meyer. “In resale, you have to learn how to price.” Learning from other store owners’ mistakes and successes is pivotal to resale prosperity.
5. Invest in Resale Software
Resale is a labor-intensive operation that requires tight accounting practices and efficiency. Doing so is aided by automating checkout and inventory management with retail software. “Managing the books isn’t going to make you money,” comments Holmes. “You need to invest in finding the right solution.”
SimpleConsign provides consignors a Web-portal to check on their items.
The needs of resale store owners require resale software solutions tailored to the industry. Constantly adding and pricing new inventory, analyzing reports on what’s selling (and what isn’t), as well as managing a multitude of suppliers means that general retail software often lacks the necessary functionality. So which solution is best?
“I’m probably asked 10 times a week which solution I recommend. My answer is always that you need to evaluate them all and find the one that works for you,” suggests Holmes.
The features need to match how you’ll run your business. For example, if you want to number your inventory based on a consignor’s ID number, ensure that the system has the functionality to do so.
One of the things that makes resale so special is how unique each store is–every store and its road to success is different. If you’re a resale store owner, what strategies have you found to be the most successful in ensuring your resale business is successful? Please leave any additional tips or advice you may have in the comments section below.
Thumbnail image created by Steve Depolo.