Golden Oldies

Picking A Format

What are you going to sell? Selecting a specialty--or not electing to specialize--is one of the key questions facing would-be resale store owners. The answer depends in large part on who and where you are.

"If you're in a rural area, you can do soup to nuts," says Davies. "If you're in an urban area, do ladies' designer or children's [wear]."

Children's and maternity clothing and accessories are attractive areas, says Helgren, because maternity items are used only briefly and "kids need a new wardrobe every season. Toys, too, get played with for such a short time."

Once you've decided what to sell, the next question is how to sell it. These days, most entrepreneurs find consignment is the best answer. The consignment setup offers important advantages for customers as well as retailers, says Fluhr.

"When [customers] leave something on consignment, they make money if it sells," says Fluhr. For instance, if a consigned dress sells for $300, the customer gets $150. The profit potential makes customers more likely to visit your store--and to spend some of their profits there as well.

The benefit to the entrepreneur is also financial because you don't have to carry the inventory. Instead, the customer basically finances the inventory by allowing the retailer to stock his or her property without charge.

With shifting supply sources and some impressive new competitors stirring up a long-settled industry, the resale business is far from being an easy success story. But as shoppers shift their sights from spanking-new, expensive goods to gently used bargains, resale will benefit. And the improvement of techniques and technology for running the stores can only help.

Wrap it up, and the secondhand store business is a lot like its own products--good bargains for those who don't have a lot of cash and don't mind a few wrinkles.

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This article was originally published in the October 1996 print edition of Entrepreneur with the headline: Golden Oldies.

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