Are consignment shops profitable?

The answer to your question isn't a simple one. First of all, the consignment store may not 'own' the inventory on hand. Typically the ownership of a consigned item remains with the consignor until the item is sold to the new owner. The store only acts as selling agent; however, the store can have inventory that it does own. Consignment stores often 'buy outright' and resell. Before putting down $8500 you should first know which items are assets of the store and which are still owned by patrons. Second thing to consider is buying an existing store vs starting your own. You might even find a 'better' location or one just as good, a vacant property where a favorable rental agreement can be bargained. In these tough times I would be hesitant to start $8500 in the hole. Makes you also wonder why the current owner is selling. At least I would attempt to negotiate 1) a lower price and 2) an installment purchase so if it doesn't fly, you'll be out of business but not out $8500. It might be ...  more