Should I buy a consignment store or start one?

Both paths lead to the same kind of business, and each solves a different problem. A purchase buys you a running operation with its history and its obligations. A start-up gives you a clean slate and a lot of early work. Which suits you depends on your savings, your patience and how much of the existing way of doing things you would want to keep.

What buying brings

An existing store comes with consignors who already bring goods, shoppers who already visit, and routines for intake, pricing and payouts. It may also come with a lease, fixtures and a software system. The trade-off is that you also take on what the store owes, such as consignor balances and any unsettled disputes. Your lawyer and accountant can explain what a purchase would transfer.

What starting means

A new consignment business, whether from home or a storefront, has to win trust before it has stock. Consignors want to see that items sell and that payouts arrive on time, and that takes time to show. You choose your own terms, system and look, and you avoid paying for an old owner’s goodwill. A written plan helps, and BDC’s business plan template is one place to begin.

Questions to settle first

Ask yourself how long you can go without a full income, and whether you want to inherit another person’s systems or build your own. Visit stores of each kind and talk with owners about their early months. If you lean toward buying, what should I check before buying a business? is a good next read.

• How much of the existing consignor base would stay after a change of owner?
• Would the lease and location suit you for the years you plan to stay?
• Which records would you need to see before you could judge a purchase?
• How would you attract your first consignors if you started fresh?