So you’ve just launched your first consignment store, and you’ve got customers coming in to offer you their merchandise for the first time. There are so many things that run through your mind.
Do you turn their items down? Did you find something of unique value? Does the customer have any idea what their stuff is worth?
Pricing inventory accurately is one of the most challenging day-to-day activities of any resale store, and particularly intimidating for new store owners.
Don’t fret too much about it though. It’s easy to forget that in most cases, the customer has no idea what their products are worth. You’re the expert and the one in control. You should never feel obligated to take their goods, and you are always the one who has the final say in the matter. If anything, receiving and pricing great inventory can be a really empowering experience.
So when you’re doing this for the first time, just remember that it takes time, practice, and experience to develop a thoughtful understanding of the value of your items.
Let’s get the low-hanging fruit out of the way first:
Be the expert. It’s generally a good idea to focus and hone your inventory to a specific type or style. Not only will you build a more reputable brand, you’ll get more purchases out of your customers, and you can really sell what you want to.
The foundation of running a successful consignment store is knowing how to price your inventory.
Not only do you need to have a strong knowledge of the inventory you are selling – but you also need to know what your customers are willing to pay for it, and what your consignors expect to earn.
Making sure you’re pricing items correctly is the largest concern for most consignment owners. After all… pricing an item too high may prevent it from selling. On the other hand, pricing an item too low means it might cost you more than it’s worth.
As such, many consignment store professionals spend years honing their pricing capabilities. If you’re just opening your first consignment store, though, you might be a little confused about where to start. Luckily, we’re here to help.
Be sure to follow these handy tips next time you price an item.
Consignment Store Pricing 101
Regardless of how uncomfortable pricing makes you, always remember this:
You set your own prices.
You know your customers, you know what you need to make to stay profitable, and you know what your consignors expect.
As such, you’re the only one who should be making pricing decisions. While you want to maintain a back-and-forth with your consignors, allowing them to have too much control over pricing is a recipe for disaster.
With that in mind, follow these three tips to master the art of pricing consignment store items:
1. Avoid Pricing Immediately
Consignors come into your store at all hours throughout the day. If you stop what you’re doing to attend to them immediately, it takes time away from other customers. Worse yet, it can lead to inaccurate pricing.
After all, it’s hard to appraise an item honestly when you’re feeling rushed. With this in mind, always allow 24 hours before contacting a consignor with a price for their items.
This will give you enough time to inspect the item and decide on a price properly.
2. Use eBay as a Reference, Not a Rule
If you had a dime for every time you heard a consignor say “well I saw it listed on eBay for…” you could probably pay your rent for a year.
Unfortunately for those consignors, though, eBay isn’t always a reliable reference.
While the site can be a great source for information, it’s important to remember that anyone can list anything for any price on eBay, which makes it highly subjective.
When researching an item on eBay, look at the average price an item goes for, rather than just the prices of the top few listings. This can help you get a better idea of what to sell the item for in-store.
3. Price to Sell, Not to Sit
Consignment businesses flourish because so much inventory passes through the door, and it’s all different.
This means customers have access to a stunning amount of variety and selection, which they’d have a hard time finding anywhere else.
It also means you’ve got to price items to move, rather than to sit on your shelves forever. As such, auto-discounts and expiration dates are common practices for consignment stores, and they’re both a huge factor when deciding how to price an item.
In a perfect world, you might be able to price an item as high as possible. When you’re faced with keeping inventory moving, though, you need to price an item to sell, instead. While this may mean sacrificing a few bucks on a sale, it’ll ultimately allow you to stock more merchandise and sell things more quickly.
Remember – it’s better to sell an item for less than to never sell it at all.
Pricing your inventory is an art that can only be mastered over time.
While pricing your items is a learning experience, the curve isn’t as steep as you might imagine. By following these four tips and adjusting your approach as you go, taking into account your specific customers and consignors, you can quickly improve your pricing skills and help your consignment store stay profitable for years to come.
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