6 Tips For Starting A Consignment Business Online
Whether you have been selling online for some time or you are brand new to e-commerce, you may be considering consignment as a potential business line. And certainly, this model has definite advantages that make it worthwhile for a seller to take on. However, before you jump in and start looking to source merchandise, there are a few things you will want to consider to make sure you get started on the right path.
So take a look at this list of tips for beginning your consignment business. In addition to offering general advice, this list will identify some ways that a comprehensive e-commerce solution can help you get you started off on a path to success.
1. Identify the niche market
With any online selling business, you want to have a clear understanding of who you will be targeting your listings to and what kind of merchandise you will market to them. And this is very important in your consignment business as well. Since you don’t have to carry loads of inventory, you can easily try out new and different types of items, but if you take on a range of merchandise that’s too broad, you might have difficulty building your brand and winning repeat business. If you define your niche, however, you can build your reputation more easily and earn both suppliers and purchasers more easily.
2. Sell what you know
In relation to the previous tip, it may be best, particularly at the outset, to focus on a category of merchandise that you understand well. This will make it easier for you to evaluate items that sellers have on offer so you can offer a fair price. And, on the flip side, it will help you market those products effectively to command a profitable sale price.
3. Build your business plan
In a larger sense, you want to take a planful approach to your consignment operation. Knowing your market and your competitive advantage are part of that. However, you’ll also want to make sure you take the time to understand your financial requirements for running the business and the sales and profit targets you’ll need to reach to consider your business a success. With the right partner for your e-commerce solution, you can get resources to help you achieve this easily.
Make sure that any software solution you use includes reporting tools that let you track you progress toward goals, and that you have personalized account support that can help tailor strategies specifically for your business.
4. Find the right way to reach your consignors
Unique to consignment selling situation is the fact that you will need to market not only to shoppers but also to potential suppliers. There are resources you can use to your advantage for this, such as internet message boards and classified ads. You can also use word-of-mouth advertising and leverage your personal network to find clients.
Make sure that the software vendor you use understands consignment well and can offer you further guidance in how to identify and attract new suppliers for your business, as well.
5. Simplify processes with the right partner
Particularly if you are already familiar with online selling, the additional processes involved in consignment sales might seem like a hassle. You’ll need to draw up the contracts and make sure to pay suppliers the agreed amount upon a completed transaction. However, if you have an e-commerce solution in place with a vendor that deals with consignment selling, all of this can be a non-issue. Look for an e-commerce selling platform that stores the transaction information, allows you to customize, and automates the process with tools like automatic payment to the consignor.
6. Think about your long-term business growth
You can find e-commerce solutions that deal strictly in consignment selling. However, you may find limitations with this type of service in the long term. As you look in to vendors for your software, you want to make sure that you will get great tools for consignment. However, you also want a strong overall platform with efficiencies in inventory management, shipping, marketing support, etc.
Kyozou gives you everything you’ll need for success in consignment as well as any other e-commerce business line. We can support you in automating your operations through multiple channels and making sure everything runs smoothly. Visit us online at kyozou.com to learn all about our robust services.