5 Questions to Consider Before Buying a Consignment Shop in Charlotte, NC

customer interested in buying a consignment shop in charlotte, nc

Consignment stores allow shoppers to purchase high-end retail items at lower, more affordable price points. The sector, comprised of clothing boutiques and second-hand home décor and furniture stores, has expanded over the last five years, with a 1.4 percent growth rate. Unfortunately, because of a decline in consumer spending brought on by Covid-19, annual revenue took a hit in 2020. Despite that, IBISWorld reports an anticipated increase in this industry as consumers look for savings while the economy recovers. If you’ve considered buying a consignment shop in Charlotte, NC, keep reading. We’ll discuss five essential questions you should consider beforehand.

5 Questions to Ask Before You Buy a Resale Shop in Charlotte, NC

Purchasing a consignment store can be a rewarding and profitable opportunity as demand for second-hand items grows, and more owners exit the industry. Ask yourself the following questions to determine if it’s the right investment to make.

  1. How will you stay ahead of the competition?

    As a potential Charlotte consignment shop owner, you’ll have several franchised and locally-owned resale shops to stay on top of, including Clothes Mentor, Sweet Repeats Upscale Consignment Boutique, and Classic Attic. To set yourself apart, start brainstorming ways you can draw in more customers, such as:

    • Offering designer options from brands like Chanel, Louis Vuitton, and J. Crew.
    • Setting up a loyalty or rewards program
    • Developing a stronger social media presence

    Additionally, you may even want to consider expanding your inventory options. For example, if the shop explicitly purchases used clothing and accessories, try accepting home furnishings or collectibles from sellers and see how well they sell.

  2. Why is the current consignor looking to sell?

    Next, make it a priority to understand why the owner is deciding to list their consignment shop for sale in Charlotte, NC. Retirement and moving are common reasons for owners to create a resale shop listing. However, with covid-19’s negative impact on consumer spending habits, it’s becoming more commonplace to see retail and consignment shops listed for sale in North Carolina and other areas of the country. If this is the case, don’t back out right away. In most cases, it’s usually not advised to purchase businesses going through financial hardships. However, you may be able to leverage your buying power and negotiate a lower sale.

  3. What’s included in the consignment store sale?

    Just like with buying any other retail business, your startup costs can add up quickly. Determine whether or not essentials like cash registers, fitting rooms, or display racks are included in the sale and if they need to be replaced now or in the foreseeable future. Depending on your answers, you may need to budget enough money to purchase or upgrade these required items and storeroom equipment.

  4. What are the operating costs?

    As you move closer to negotiating an offer, you’ll need to get a better look at the consignment shop’s current expenses. Ask to read over important financial documents, including tax returns, income statements, and utility bills. Reviewing these documents can help you better understand the costs associated with running a consignment shop in Charlotte, NC.

  5. What’s the asking price?

    Finally, after determining your operating costs, you’ll be ready to inquire about the asking price. Asking prices for Charlotte consignment shops can vary based on their size and location, revenue, and cash flow. Make sure you ask the consignment shop seller if they paid for a third-party business valuation. The pricing is more than likely accurate if they received a professional opinion. On the other hand, if they didn’t, it could be valued too high due to emotional attachment. If this is the case, you’ll have much more room for negotiating a better deal.

To learn more about buying a consignment shop in Charlotte, NC, consult with the experts at VR Business Brokers. Our knowledgeable team members have years of brokerage experience under their belts. We can help you locate your ideal business, walk you through your financing options, and ultimately negotiate a deal. Contact us to book your consultation today!

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