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Green Business Ideas: Consignment Shop for Kids Clothing and Toys

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Families with more than one child quickly realize that not only is keeping their kids in clothing that fits them an ongoing task, but also that new kids clothing can be quite costly, considering how short of a time they actually wear each one. A much more affordable and sustainable option is shopping at thrift, secondhand, and consignment shops, which offer a variety of goods that still have plenty of life left in them.

If you enjoy families, and have a good eye for building displays, along with a knack for knowing what types of kids clothing and toys will sell, then the rise in popularity of consignment shops and thrift stores may be indicating that opening one of your own might be the right green business idea for you.

1. What is a kids clothing and toy consignment shop?

Consignment shops take gently used goods from some customers and sell them to others.  The revenues from the sale are split between the store and the customer who originally owned the product.  In this way, consignment shops give another life to kids clothing and toys that might otherwise go to a landfill.  One of the very attractive aspects of running a consignment store is that your entire inventory costs you nothing.  You do not pay the owner of the article until it has sold… in other words, until you have money in your hand for exactly that item.  You are simply providing the marketplace for buyers and sellers of gently used items such as kids clothing and toys.

Consignment, resale, and thrift shops number in the 25,000 range in the U.S. alone.  The combined industry value is roughly $1.5 Billion, and the industry represents a real opportunity for shoestring startup entrepreneurs who have a passion around a particular hobby or lifestyle such as fashion, games, sports, etc.

In the case of kids clothing and toys, kids tend to outgrow their items quickly, and with grandparents and friends continuing to shower parents with toys and clothes, most parents will simply dump piles upon piles of good quality, gently used clothing and toys at your doorstep.  And the next parents will be just as happy to have those items and save themselves piles of money on items their children will… quickly outgrow.

2. What required knowledge or skills are necessary?

There are no formal educational or training requirements for this job.

3. How much money is required to start?

$-$$   (on a scale of $ to $$$$$) Renting a space that’s not only highly visible to potential consignment shop customers, but that also has the flexibility to function as a stockroom, display area, sales counter, and dressing room for customers, will be the biggest expense. After that, providing shelves and hanging racks for clothes will help to display the kids clothing and toys in an appealing way, and will help keep things tidy. A basic computer setup can handle the recordkeeping and serve as the cash register, and a tablet computer or smartphone can be set up to handle credit and debit card payments through PayPal, Square, or other mobile payment solutions.

4. What is the income potential?

$$-$$$   (on a scale of $ to $$$$$) At its most basic level, a consignment shop can merely take in and sell kids clothing and toys for others, taking a percentage of each sale, but without a big network of people to bring in their stuff to sell, that has a limited income potential. If you go to garage and estate sales, or even other thrift stores when they have clearance sales, and buy the goods there at a steep discount for resale in your own store, then the income potential could be much higher.

5. What is the best location for a kids clothing and toys consignment store?

Urban (fair), semi-urban (very good), suburbs (best), rural (good).

6.  Three best questions to ask yourself to find out if this business is right for you (if you can answer yes to all three, this business might be for you):

  • Do you live in a place where there are a lot of children (i.e., suburban Utah might be a better place to start this business than New York City)?
  • Do you have a good eye for kids toys and clothing that would segregate the junk from the gem?
  • Do you and your friends/family have a stockpile of kids clothing and toys that can serve as your initial inventory for the grand opening?


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