Starting a Consignment Store Part 3: Finding Your Niche

Finding Your Niche and Sourcing Inventory for a Physical Consignment Store

We've covered legal setup and choosing the right resale model. Now, you need to determine your market niche. Your market is the place you plan on selling your inventory, either in person or online.

Choosing a niche gives your shop a clear identity and customer base in a market, while a smart inventory plan ensures your shelves stay full of items people want to buy. In this post, we’ll:

• Explore why your niche matters

• Highlight examples of thriving consignment niches

• Discuss how to test your niche idea

• Break down effective strategies for sourcing inventory through both consignment and buy-outright models

We’ll also cover tips for finding your first consignors, maintaining quality control, and the pros and cons of different inventory models, ending with a handy checklist to help you evaluate your own niche and inventory plans.

Why Choosing a Niche Matters in Resale

If your town has 12 Italian restaurants, but only one Chinese restaurant, it's likely that the one Chinese restaurant will do much better financially because there is less competition.

For your resale store to do well, you will need to stand out in your own market. It may be that there aren't any other resale or consignment stores in your small town, which means you may not need to specialize as much as if your store had multiple resale stores.

You will want to analyze your in-person or online market. To do this, you can:

• Check Google Maps and Yelp for similar businesses in your area.

• Walk and drive popular downtown areas.

• Visit top competitors and note their niche and strengths.

• Review the online presence of competitors (websites, social media).

• Note gaps and opportunities that your store can take advantage of.

Testing Your Niche Idea Before Committing

Before you fully commit your business to a particular niche, it’s wise to validate the idea and make sure it resonates with your target market. Here are a few low-risk ways to test a niche:

• Surveys and Community Feedback: Reach out to your potential customer base (for example, via social media polls, local Facebook groups, or simple Google Forms) to ask what types of consignment goods they wish they had available. Gauge their interest in your niche idea. This direct feedback can reveal if there’s excitement (or indifference) about your concept.

• Pop-Up Shops or Market Stalls: Try a temporary pop-up sale to test the waters. You could set up a booth at a local market, community fair, or even a shared retail space for a weekend, featuring items from your intended niche.

• Online Trials: If a physical pop-up isn’t feasible, consider a small-scale online experiment. You might list a batch of niche items on an online marketplace or your social media page to see how quickly they sell and what questions customers ask. An online presence (even just an Instagram sale or a few listings on eBay) can help validate interest beyond your immediate area.

• Join Niche Communities: Immerse yourself in communities relevant to your niche. For example, join local parenting groups if you’re testing a kids’ consignment idea, or sneaker collector forums for a sneaker boutique. Observe the chatter, ask questions, and even announce your concept to gauge reactions.

With each of these methods, be sure to keep track of the data you collect. For example, when selling at a pop-up or with the online trial, try and collect customer sentiment about your inventory and prices and track your sales data. This will help you determine what exactly people are looking for.

Sourcing Inventory: Consignment vs. Buy-Outright Models

After choosing a niche, the next step is stocking your store. You can either take items on consignment or buy them outright, and many owners use a mix. Let’s look at both models.

If you want a greater look at resale models, check out our blog on choosing to go with Consignment, Buy Outright, or Donation.

Step 1: Define What You’re Looking For

Start by listing the types of items that fit your niche and appeal to your ideal customer. Think about:

• Product categories (e.g., women’s contemporary fashion, vintage furniture, kids’ apparel, collectibles).

• Quality standards (brands, condition, age, or rarity).

• Seasonal demand and local preferences.

This step gives you a clear “buying map”, a reference point for every sourcing decision that follows. It also helps you communicate your standards to consignors or suppliers.

Step 2: Choose Your Sourcing Model

Decide whether you’ll focus on consignment, buying outright, or use a hybrid of both (there is also the donation-style store which you can check out here). Many successful store owners start with consignment for lower risk and then introduce buy-outright options once they understand customer demand.

NOTE: depending on your store, you may be better served by consignment or buy outright, so you'll want to investigate the pros and cons of each.

Sourcing via Consignment (Finding and Building Relationships with Consignors)

Consignment allows you to fill your shelves without large upfront costs. Here’s a linear process to get started:

1. Start with Your Network – Begin with your own supplies and by reaching out to friends, family, coworkers, or local community members who might have quality items to sell. Offer simple terms and explain how consignment works.

2. Expand Through Local Promotion – Post in neighborhood Facebook groups, buy/sell/trade pages, and community bulletin boards. Highlight what you’re looking for (e.g., “Seeking gently used women’s boutique clothing – we offer 40% commission!”).

3. Creative Outreach - Utilize platforms like Facebook Marketplace, Nextdoor/Neighborhood apps, OfferUp, Craigslist, and local estate or auction sales.

4. Host a “Consignor Sign-Up Day” – Invite potential consignors to bring items for review. Offer refreshments or a small giveaway to make it an event and generate word-of-mouth buzz.

5. Set Clear Guidelines – Provide a written consignment agreement outlining accepted brands, condition requirements, commission rates, payment schedule, and return policies.

6. Track Everything – Use a consignment management system (like ConsignCloud) to log items, assign consignor IDs, and generate reports. Clear tracking builds trust and keeps operations transparent.

As you grow, consider offering incentives such as higher commission rates for early consignors, referral bonuses, or loyalty perks for repeat partners.

Sourcing via Buying Outright (Owning Your Inventory)

Buying inventory outright gives you full control and potentially higher profit margins — but it also comes with more risk. Here’s how to approach it strategically:

1. Set a Starting Budget – Decide how much you can safely invest in inventory each month without hurting your cash flow.

2. Research Sourcing Channels – Build a mix of sources to diversify your supply, such as:

   • Local thrift stores and estate sales.

   • Online marketplaces like eBay, Poshmark, or Facebook Marketplace.

   • Wholesalers or liquidation sellers for bulk deals.

   • Local artisans or small businesses with overstock.

3. Inspect Before You Buy – Check condition, authenticity (especially for designer goods), and resale potential. Use your niche “buying map” to stay disciplined and avoid emotional purchases.

4. Track ROI (Return on Investment) – Record where each item came from, what you paid, and how fast it sells. Over time, you’ll identify which sources deliver the best profits and which to phase out.

5. Balance the Mix – Even if you buy outright, consider keeping some consignment partnerships to keep inventory fresh without increasing financial risk.

Step 3: Maintain Quality Control and Intake Standards

Strong quality control keeps your reputation high and ensures customers trust your store. Create a written intake checklist — for example:

• Clothing must be freshly laundered, free of stains, tears, or strong odors.

• Furniture must be sturdy, clean, and ready to display.

• Electronics or baby gear must meet safety standards.

Be consistent and kind but firm when declining items that don’t meet your standards. Over time, consignors and customers will learn exactly what quality level to expect.

Step 4: Review, Adjust, and Grow

As your store evolves, continuously review what’s selling and what’s not. Use your sales reports to identify high-performing categories and brands. Drop slow movers and adjust your sourcing accordingly. Many store owners find that refining their niche, even slightly, can dramatically increase sales.

Alexandria stopped accepting certain brands and added new ones based on her sales data. It helped her increase her sales by 175%. Adjusting your intake process is critical!

How ConsgnCloud Supports Finding and Building Your Niche

ConsignCloud lets you tag and categorize items by brand, season, style, or condition, making it easy to track what sells best. Reporting tools help you spot which categories or niches are most profitable so you can refine your sourcing strategy.

Upcoming: Starting a Consginment Store Part 4: Location and Store where we help you discover how to pick a store location, organize your store layout, and/or set up an online presence.