Question

Topic: Research/Metrics

Market Research For Consignment / Resales Stores

Posted by Anonymous on 11/2/2009 at 6:11 AM ET 250 Points
Has anyone done any type of market research relating to upscale furniture & clothing consignment stores. I am working on a plan to open a consignment shop and have been unable to come across any gross sales data for this retail market. In order to have any idea if this will work I must have some sort of information with regards to its possible gross sales per month, per year or per square foot. Most of the information I have found is very general and mostly indicates that this retail market has been experiencing rapid & large growth. What that means is anyone guess when it comes to real numbers. If anyone has any information please pass it along.
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RESPONSES

  • Posted on 11/2/2009 at 6:12 AM Author
  • Posted by Jay Hamilton-Roth on 11/2/2009 at 8:39 AM Accepted
    Sales numbers will vary greatly based on: location, target market, competition, and marketing. If you had a number about possible gross sales, it would only be misleading to your goals. If you want to mine some data, take a look at your local Craigslist ads. See what's selling and for what. Talk to your local consignment stores.
  • Posted on 11/2/2009 at 8:49 AM Author
    Hello Jay,

    I sure have been doing that! But getting any feel from local shop owner has been mostly impossible. I tend to get the standard response thing are GREAT! But what does the really mean? I have been watching local shops to get a feel for foot traffic and turn over. And they are BUSY! But again I have no idea what how that relates to $$'s coming in. I have worked out the budget as far as operating costs but how does that really help with the bigger picture of figuring out if you can cover those costs, when it seems impossible to get real number on sales. I have been checking out what's being sold on CL in my local area and pricing more for a possible inventory stand point. Any additional comments are WELCOME. Thanks for responding.
  • Posted on 11/2/2009 at 4:59 PM Accepted
    Where would you open this consignment shop? One possibility is to see if you can get a similar business in another area (i.e., non-competitive) to share enough information to decide if it's something you want to do.

    Or you can pay a professional market researcher to do that for you. It's usually easier to get a small business owner to share information with a neutral third party collecting information on the industry than an individual who is going to go into the same business (even in another state).

    Been there and done that, so I know the challenge (not in the same business, of course).
  • Posted on 11/3/2009 at 10:12 PM Accepted
    A few other ways you might get an estimate:

    Hoover's has a report on the "Used Merchandise Stores Industry" and gives a broad range of $40-100/sq foot with stores ranging from 2000-5000 sq feet. That info is from the free preview--the purchased report may or may not have more detailed segmentation.

    This article suggests that a Goodwill has sales per square foot on average of a little over $100. https://www.oregonlive.com/living/index.ssf/2009/05/times_are_good_for_good...

    Also try the associations. It looks like the National Association of Resale Professionals has some aggregate financial data available for purchase--it's from 2005 so you may want to factor that into your analysis.
    www.narts.org

    The National Retail Federation may also have something for you. I couldn't find anything on their website that specifically addresses your question, but it would be worth a phone call. www.nrf.org

    Finally, try to find a mentor or consultant who lives this business day to day. I can't stress this one enough. Retail is a tough business and never seems to pencil exactly as you'd expect. You'll need someone who isn't running a biz that will compete with yours--look for a store owner who operates in an area that has similar demographics as yours.
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