“You don’t need to spend a million, to look like a million.” – If you grew up watching TV in 1970’s New York, you may recall that tagline, from the Ritz Thrift Shop. The commercials ended with a well-dressed woman, walking out onto Fifth Avenue, ready to take on the world in a second hand, full-length fur.
Flash forward to 2012; the economy is struggling with a number of retail businesses going bust, leaving empty storefronts in their wake. But amidst the news of an ailing economy, there’s a growing trend that’s bringing a little retail therapy for many of us: consignment shopping.
Long gone is the stigma of buying someone else’s used cast-offs. From last year’s Dior, to your Grandma’s rhinestone ring, furnishings, fashion and fun, at discounted prices, is in vogue. But you don’t have to get left behind as you watch all of the sales go by. It’s time to join the frugal revolution and reap some nice rewards by selling your own wares. Who couldn’t use a few extra dollars in their pocket these days?
Consignment essentially means you’re consigning your items for a sales price that you and your consignment “partner” agree to ahead of time; then split the sales commission. Most consignors pay anywhere from a 40/60, 50/50 or a 60/40 split. I know it’s a broad range, but every store has its own needs and sets its rates based on operating costs. When you think of the costs for processing your items, prepping them for sale, floor placement, marketing and sales management, all services the store provides, it’s a trade off.
On the pro side of consignment, you’re splitting a commission on prices that can really add up. Higher end designer items, like Chanel, Marc Jacobs, and others, garner bigger dollars. Everyday staples from stores like Loft, Lilly, and Banana Republic, will get lower prices but you generally have more of those to sell so it can balance out.
On the con side, is the wait you have to go through until your items are sold and you get paid. Depending on the store and their policy, you might not see a check for one, two, or three months.
Resale, on the other hand, is strictly just that. The reseller reviews your items with their customer needs in mind and then buys your items on the spot. The quick, instant payday is definitely a pro when working with a reseller; who doesn’t love instant cash? The downside of resale, is that you’re generally paid pennies on the dollar. The price the reseller pays you at that moment, feels a lot less than you think the items are worth.
Try not to take this too personally. One time I had a bag full of designer handbags, dresses, and shoes, with tags still on, only to be offered about $50 for everything. I was a little hurt I must admit, as it felt like it was an affront to my personal taste. But once I collected myself, I remembered it’s a business and the buyer of your items at that moment, must calculate how much profit they can make, once your items are on their sales floor.
Can you haggle? Sure, if you can channel your inner Monty Hall and speak directly with the shop owner, you may get some flexibility. If you can’t get them to budge and you’re still convinced that you can get better money, try the shop down the street. They may pay better prices or have a different customer base.
The best way to answer that question is to do a little homework. Pay a visit to a store’s website to see what their policy is online. Plato’s Closet, a national resale chain that caters to more of a teen/college-age crowd, states upfront on their website, what’s hot right now.
Secondly, and I believe more importantly, you should always pay a visit to the shop itself. A quick tour will set you straight. Most stores are happy to provide a fact sheet in store, that outlines their policies and product needs or answer questions directly.
“Do they sell higher end designer items, or more ready to wear mall brands? Is their audience mostly the teen set, like Plato’s Closet? Or are they more of a designer vibe, like Second Time Around, which also sells handbags, accessories, and shoes as well as men’s items?”
“Do they only buy seasonally, or can you sell them winter sweaters in the middle of summer?” Sellers are happy to answer your questions.
When you’re in your closet, reviewing which items to sell and which to donate, use these mental notes as a filter. After all, you don’t want to be lugging bags of unwanted items that your store turned down, back to your car, on a hot summer day!
Also think about what makes items more attractive to your store’s buyer. In the store I used to work in, our rule of thumb was that our consignors had to have at least 10 items for review, pre-cleaned, and in the case of clothing, on hangers, with no visible signs of wear and tear. A missing button is fine. But if an item had sweat stains, ripped hems, or smelled like smoke, we just didn’t buy it. Would you?
There is no fee usually, when you sell to a resale shop. Some will allow you to walk in anytime the store is open and point you to a designated “intake” area. Some will require you to make an appointment or will only accept intake on their selected “buyer” days.
Consignment stores, however, may require you to pay an initial seller fee, the first time you go in to sell. Essentially it’s a membership fee you pay once, to start doing business with them. Fees can range from $10 all the way up to $50, depending on the area, type of product and other store rules. So be prepared to ask if there is one, so you won’t be surprised if it cuts into your imagined profit margin.
RULES TO LIVE BY
You’ll find that some consignors will require you to enter into a sort of informal business agreement that is basically nothing more than a statement of policy that protects buyer and seller. Besides the breakdown of the commission split, discussed earlier, it may include:
Prices that your items will be sold for
How long your items will be on the sales floor
Claim date for items that go unsold
Status of unsold items if one doesn’t pick up by the claim date
These are all essential aspects of your agreement that you need to be aware of, so you can stay educated and on top of your potential income. Please make sure to read any sort of agreements, statements of policy or other related collateral carefully.
In some cases, thrift shops, which may work as consignors on behalf of a charitable or non-profit group, are a lot more flexible and may allow you to price your items for sale, yourself. If you’re not sure how much to charge, look around at the inventory all around you to help determine your price. Or again, just ask.
You don’t want to think that your items are selling like hotcakes only to find out after four weeks, they’ve been collecting dust. Just like any other money making venture, you need to stay focused, on the business of selling your items.
Based on experience, when I bring in items to respected consignors, I know its smart to check in on the status of your items, because you just can’t rely on their team to keep the lines of communication open. A simple call to the store or a visit, usually will get you what you’re looking for.
What if your items aren’t selling on the sales floor? Some consignors utilize a staged pricing system, which reduces prices over time. If you’ve shopped in these stores, you may have noticed a series of prices and dates on a price tag.
The initial price and date the item hits the sales floor is listed. Another price at a date down the road is also listed on the tag and lastly, one final discounted price at the end of your sales period before it leaves the floor.
Does this help or hinder a sale? Depends on how you look at sales marketing. Yes, it can seem confusing and may cause a shopper to hold out for the lower price. But it can also mean your seller is a savvy businessperson and will do what it takes to move your inventory.
Last but not least, make sure you are clear on a store’s policy on claim dates. When you sell via a consignor, a claim date is provided to the seller, which is when you must pick up any items that remain unsold. When that date is, depends on many factors, including how fast a store processes items for sale, the length of the sales period, and how many days a seller has to claim unsold items.
Most stores have a policy on this and will provide you with that claim date on paper, and how many days you have to pick up prior to that date. Greene Street Consignment, a favorite of mine in the Philadelphia area, requires consignors to pick up five days prior to a claim date.
If you have every intention of picking up your unsold items, you need to stay on top of that claim date however, because if it’s changed, or you miss it, your items may become store property. This means, you no longer get the option of selling them elsewhere, donating to charity or getting the tax write-offs; they do.
Remember, selling to brick and mortar stores isn’t the only option. Online consignment businesses, such Luxury Garage Sale, www.luxurygaragesale.com expose your items to the wider online market while also providing pickups of your items, nationwide. Add into the mix, sites like Craigslist and eBay, where you sell it yourself, opportunities abound.
We’ve tried to provide you with a good set of tips on what to expect when you’re looking to sell your gently loved items, but this is clearly not exhaustive. Your best bet is to do your homework by researching online, visiting the store, and asking questions, like the ones below.
TOP TEN QUESTIONS TO ASK IF YOU’RE LOOKING TO SELL:
Do you buy outright, or do you work on consignment?
Is there a fee for first time sellers?
What is your commission split for sales?
What type of designers/brands do you carry in your shop?
Do you buy seasonally or any time of year?
How should I prep my items for sale?
Do you price my items or do I?
How long will my items be for sale and do you mark down?
What is my claim date for picking up anything unsold?
What happens if I don’t pick up by my claim date?