Many people are turning to the Internet to make a few dollars by consigning their name-brand clothing. Some of them don't want the hassle of creating auctions and are willing to split the proceeds with someone who can handle the sales. Here's how you can help these people by starting your consignment clothing business online.
Instructions
1. Decide what you want to offer in your online consignment shop. Most shops specialize in a particular type of clothing such as women's boutique or name-brand children's clothes. Also decide if you'll handle other related items such as bags or accessories.
2. Decide the payment split you'll share with your consignment customers. To help you decide what to charge, determine how much you think the clothes will make and calculate your business expenses. Include in your expenses how much you want to be paid for your time and effort. You need to choose a payment split that earns you enough money to meet your goals, but also provides a worthwhile payoff to the consignor. In checking a variety of online consignment shops, the average split is 50/50 for the first 30 days, dropping 10% each following month. After 90 days, many return the clothes (at consignment customer's expense) or donate the clothes to charity.
3. Make your business official. Decide on a business name and buy the Web domain for the name. Determine your business structure such as sole proprietor or limited liability company (LLC). Check with your local (city or county) business office for information on getting a business license and a sales tax certificate (if you have sales tax in your state).
4. Write an agreement between your and consignors. This will go online. Be careful with the wording of the contract and have a lawyer look it over to make sure you've covered all the details. This includes terms such as what you'll accept (e.g. quality, brand name, etc) and what you'll do with items that you won't accept, payment split, and how and when the consignment customer will be paid.
5. Plan your website. Because you'll have a lot of clothing, you'll need an ecommerce site that has a shopping cart and payment processing. There are storefront Web hosts that can provide all the store features you need. They tend to be more expensive to set up and manage on a monthly basis than a regular Web host, but many offer inventory tracking and other helpful store features. Many regular Web hosts have shopping cart features you can add, but usually you'll need to activate and program them to work with your site. When planning your site, also think about organizing it for easy navigation by your customers.
6. Sign up for payment processing. If you use the services of your Web host (storefront or regular with shopping cart plug in) you'll be told which payment processors work their system. You'll then need to sign up. There is usually a set up charge and transaction fee each time you sell something.
7. Build your website. Once you have your site planned and know what Web host you'll be using, you need to build and upload your site. Many website hosts have templates you can use or you can use a program like Microsoft Expressions or Adobe Dreamweaver to build then upload your site to the host. If you're not sure of the technical aspects of website building, you can hire someone through Rentacoder.com or eLance.com.
8. Set up an inventory and shipping system. People will be sending you items that you'll need to track with their information so that they get paid when the items sell or you can return if they don't. Further you need an easy way to package and ship the items when they sell.
9. Find consignors. You can start with your own inventory of clothes, but to have a profitable business you'll need to find more people to send you their clothes to sell. Let your friends and family know what you're doing. Put fliers up in your area. And have a page on your website that gives information on how people can consign their clothes with you.
10. Find customers. Once your store is online and stocked, its time to find buying customers. Create a plan for marketing your business online and off. If you're specializing in a specific type of clothing, identify the best market for those clothes and create marketing materials that let them know what you have to offer. Place your materials where your market can see them such as other websites and magazines.
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