New Small Business??? (mortgages, insurance, sales, agents)

[Donengland]

I've been thinking about opening a retail store for medium to high end used items. Anyone with a thought about if this is a good time to start up? and; Is this type of business gonna make it with this economy in Phoenix?

Thanks

[dnc19694339]

Sure, like a thrift store? Thats what some of the guys on storage wars have. Stores full of stuff! I think it would have to be in a lower income area to do well. Theft could also be a problem in that type of area and you would probably have shelves full of items.

Buy low sell high! I know we have thousands of dollars of stuff we bought when my daughter was young and it was all high dollar items, pottery barn kids, american girl doll, this stuff is big money and right not it is just sitting around. I dont think we have a store around here to bring it to.

[mtgmike]

These things can work well in high income areas, as well. One of the best pawn shop operations in Houston is a nice place that deals only in collectibles, fine jewelry, mink coats, etc etc. Its hilarious because it looks like no other pawn shop in the world.

Go for it. Retail= Location, Location, Location. Lets say you set up a 2500 sq ft place with nice fixtures, enough inventory so that sellers will come in the door, advertising, etc. I bet you can do it for a couple hundred grand.

Beware, "second hand dealers" are coming under more and more scrutiny because they aren't as regulated as pawn shops, etc. You better understand that stolen merchandise is very likely to come your way.

[cpg35223]

Originally Posted by Donengland

I've been thinking about opening a retail store for medium to high end used items. Anyone with a thought about if this is a good time to start up? and; Is this type of business gonna make it with this economy in Phoenix?

Thanks

The best time to start any business is in bad economic times IF you have the following:

1) Sufficient capitalization
2) An absolutely unique idea, an unassailable marketing positioning statement that you can write on the back of a business card. If you can't do that, you don't have an idea.
3) Have a well-funded marketing plan. Marketing is the first thing you should consider, not the last.
4) Willingness to work your ass off

[petch751]

Originally Posted by Donengland

I've been thinking about opening a retail store for medium to high end used items. Anyone with a thought about if this is a good time to start up? and; Is this type of business gonna make it with this economy in Phoenix?

Thanks

If you are going to do that then you better know your product or you'll make a name for yourself selling fakes. People who go to camel street will try to pawn their stuff off on you.

[calnbs]

It takes money, good inventories, fair pricing, team work, and long hours to keep a retail store going. My brother and I have never ran a second hand store but we have ran a couple of discount stores for various companies. Let me tell you, it costs a lot of money to get the inventories to the store and it takes a lot of money to push those inventories to consumers.

Your biggest issue will be finding enough inventory or having enough money to buy the inventory. If you can solve these two issues, you are half way there. There is nothing worst than walking into a store and is empty. They might never come back; I know I would not come back. Stolen items and knock offs from China might be another headache. Then comes the rent, insurance, marketing cost, employees, etc.

You might want to test the market first buy renting a small office and do appointments only sale or out of your garage and do appointments only sale. All you have to worry about is marketing and see where it takes you before jumping all in.

[mainebrokerman]

A lot of good advice here

its all about inventory and how you get it,

if i were going into this business, knowing its a saturated market- from junk sales, storage units, lawn sales, huge amount of people already doing this, i'd try for a different angle, or a duel approach... if you open any newspaper you will find advertising of "free Estate estimates" people that are looking for someone to go into a house and give an estimate on the junk or treasures(usually after a person dies) they get first crack at offering someone a low price for merchandise,, antiques, and they are opportunists...

this is an angle, or approach I would try- I'd set up a cleaning and hauling company/service- contact, all the area banks/real estate agents, tell them, you clean up abandoned houses- yes, you may have an image of a trash hauler, but the market now is still saturated with abandoned houses- cant afford mortgages anymore
many homes are listed as forclosures/short sales- the owners just leave-yes they dont leave behind obvious treasures, but many do leave furniture/appliances in decent shape

people get behind on there mortgages- its a terrible time for them, they are distressed, eventually the property reverts back to the bank- the previous owners often just leave, leave the house a mess, but often in a hurry to leave, they leave other "stuff" behind,,,,
if you are a cleaning and hauling business, this can be free inventory- so, you get paid for cleaning, and get to keep whatever you may find- not a bad gameplan

why contact real estate agents? if the bank wants to list (sell) the property, they dont want to "show" the house when its full of what someone else left behind- real estate agents, will tell the bank, it needs to be cleaned out, and you have a business to do that.

also, this is what happens alot- an older person may pass on or go into a nursing home, an out of state relative is "handling" the selling of the home- its a mess...they see your business on the internet, or, again,,they are talking to real estate agents, and they recommend you- that you can clean out the house.
relatives either live too far away or cant do this themselves- so they calll you,,,they may come to cherry pick what they want and leave what they dont want.

[oregonwoodsmoke]

There are a couple of stores around here who seem to be surviving. They do higher quality, but on consignment.

There are two consignment furniture stores. One does ordinary stuff and one does high end stuff. Both seem to be surviving just fine ( guessing, because I haven't seen the books, but they are still in business).

I know of high end clothing stores that are consignment.

So, it can be done. You'd have to be very good at organizing a business, because most used item stores are really marginal and many go out of business fairly quickly

[juneaubound]

Originally Posted by oregonwoodsmoke

There are a couple of stores around here who seem to be surviving. They do higher quality, but on consignment.

There are two consignment furniture stores. One does ordinary stuff and one does high end stuff. Both seem to be surviving just fine ( guessing, because I haven't seen the books, but they are still in business).

I know of high end clothing stores that are consignment.

So, it can be done. You'd have to be very good at organizing a business, because most used item stores are really marginal and many go out of business fairly quickly

Agreed. I started a niche consignment store three months ago and this month the store paid for itself. Which is great but it also means that I've been working my tail off for three months and haven't actually made an income yet. I was prepared for that.

Some thoughts so far on my (admittedly) short time doing this:

1. I had a lot of stuff to start with that belonged to me (couldn't open the store with nothing) and spent many months accumulating other stuff (always with the "buy low - sell high" in mind), so the store wasn't empty when it opened.

2. Everything must be in very good to excellent condition and laid out well enough that it doesn't look like a Salvation Army store. When accepting consignments develop a very critical eye.

3. I had no retail experience but had a good deal of management experience in the areas of budget preparation, marketing, book keeping - which helped in putting together a business plan and has helped a lot in terms of guerilla marketing. It also helped in putting together expense/revenue reports, forms for consignors etc.

4. Keep VERY tight control on overhead. Plan every cent you spend, track every dollar you spend, track every dollar you make. I knew the very moment when I had completely covered overhead (happened about 6 1/2 hours ago).

5. Customer service customer service customer service. Know your products. Talk to everyone who walks in the door about anything and everything - I've had people stand and talk to me for an hour about everything from stuff in the store to the state of the economy to where the elk are headed because of the wolves in Yellowstone. Hand a business card to every.single.person.that.you.run.into. in your travels.

6. I had a website built for me for free by the Wyoming Business Development Center. Free website and on a site providing free hosting. I can make changes whenever I want to, to the site. I built a blog and update it a couple of times a week. There are tons of free classified sites appropriate for your business - free advertising and it feeds your SEO. You'll be inundated with folks wanting to sell you advertising (on the radio, in the newspaper, on the back of freakin' restaurant menus). Spend cautiously and wisely.

7. Clearly state in writing and verbally all your store policies, stick to them, be enthusiastic at all times with the public (which should be easy if you're doing what you love), treat people with respect and dignity, pay on time (customers, bills)

8. If you can't afford the rent in the best (high traffic) areas, you'll spend more on marketing. Make sure your signs are BIG (I knew that but got in too big of a hurry when ordering signs and the first were too small - I knew better and paid for my mistake).

9. Did I say keep very tight control on your overhead?