Podcast Summary: The Side Hustle Show – Episode 640: Get Paid to Sell Other People’s Stuff: Starting a Consignment Side Hustle

Release Date: November 14, 2024

Introduction

In Episode 640 of The Side Hustle Show, host Nick Loper delves into the world of consignment side hustles with guest Sarah McCaffrey of Statement Consignment.com. Sarah shares her journey of transforming a simple idea into a thriving consignment business, offering listeners actionable insights on starting and scaling a consignment side hustle.

The Genesis of a Consignment Business

Sarah McCaffrey’s entrepreneurial spirit was ignited when she organized a kids’ consignment event to sell her children's used clothes. Despite having no prior experience, her first event yielded an impressive $800 (00:43). This success led her to question why adult-focused consignment events were scarce compared to those for children.

Sarah McCaffrey [01:24]: "After I picked up that check for $800, I just thought, why doesn't this exist for adults?"

Recognizing the potential in the adult market, Sarah saw an opportunity to cater to individuals with quality clothes that often go unused. She identified that adults are more selective about their clothing purchases, necessitating a different marketing approach compared to kids' events.

Overcoming Initial Challenges

Transitioning from concept to reality was not without its hurdles. Sarah initially hesitated to pursue the idea due to her existing commitments as a mother and a photography business owner. However, the persistent vision drove her to take the leap.

Sarah McCaffrey [03:25]: "This idea will not leave me alone. I have to do it. Like I had no other choice."

Her first major challenge was assembling a critical mass of sellers. Instead of relying on traditional marketing channels, Sarah took a direct approach by reaching out personally to individuals she knew had closets full of quality clothing.

Sarah McCaffrey [04:06]: "I was going to call everybody I knew who had a closet full of good clothes and just ask them."

Strategizing the Consignment Model

Sarah opted for large, seasonal events rather than continuous small-scale sales. This strategy introduced a sense of urgency and exclusivity, driving higher attendance and sales during limited timeframes.

Sarah McCaffrey [05:13]: "The sense of urgency and that scarcity really drives sales for us."

She chose venues that could accommodate a substantial inventory, understanding that a retail-like environment is essential for showcasing clothing effectively. For her inaugural event, Sarah invested $3,500 in venue costs, a significant risk given her limited savings.

Effective Marketing Strategies

Marketing played a pivotal role in the success of Sarah’s consignment events. Initially utilizing Facebook events, Sarah gradually incorporated Facebook ads to maximize reach and engagement.

Sarah McCaffrey [09:08]: "We created a Facebook event and started promoting that. After a couple of years, we started doing Facebook ads."

Additionally, Sarah emphasized building a community around her events. She encouraged sellers to promote the event through various means, including social media engagement and local partnerships. This multi-faceted marketing approach ensured consistent foot traffic and repeat attendance.

Sarah McCaffrey [11:17]: "We do giveaways, so we give them five ways that they can market...and they get entered into a giveaway."

Operational Excellence and Revenue Sharing

A critical component of Sarah's consignment model is the revenue split. Sellers retain 60% of the sales, while the consignment host keeps 40%, a notably competitive arrangement in the industry.

Sarah McCaffrey [15:23]: "The sellers keep 60% and the consignment owner keeps 40%. It's one of the best splits that you can find."

To streamline operations, Sarah utilizes Consignment Manager, a software solution that simplifies payment processing and inventory tracking, ensuring accuracy and efficiency (09:08).

Managing Event Logistics and Staffing

Running large-scale consignment events requires meticulous planning and a robust support system. Sarah employs a workforce composed primarily of her own sellers, who assist in managing the event in exchange for hourly payments.

Sarah McCaffrey [18:45]: "Our statement sellers also become our workers...they get paid hourly and they are the ones who really make the event happen."

This approach not only reduces staffing costs but also fosters a sense of ownership and community among the sellers, enhancing their commitment to the event's success.

Scaling Through Franchising

After establishing a successful model in Knoxville, Sarah expanded her business by franchising. Starting in 2022, she began offering a "business in a box" to empower other women to launch their own consignment events in different cities.

Sarah McCaffrey [25:07]: "We are just so much more fully developed. They get access to everything they need."

Franchising allowed Sarah to scale her business rapidly without overextending her personal resources, ensuring each new location maintained the quality and community-centric approach that defined her brand.

Lessons Learned and Overcoming Challenges

Sarah candidly discusses the challenges she faced, including managing leftover inventory and handling customer feedback. Through these experiences, she learned the importance of personal accountability and effective communication.

Sarah McCaffrey [31:18]: "I need to handle those complicated situations myself and be able to handle that negative feedback."

Despite initial setbacks, Sarah’s resilience and adaptability have been key to her sustained success in the consignment business.

Future Goals and Sustainability

Looking ahead, Sarah aims to grow her franchise to 100 locations, driven by the increasing demand for sustainable and cost-effective shopping options. She envisions her events not only as business ventures but also as platforms that promote environmental sustainability by giving clothes a second life.

Sarah McCaffrey [34:17]: "Consumers are just looking for the opportunity to buy secondhand more than ever, and it's just blowing up."

Her personal goals include building a house in the mountains, demonstrating her commitment to both personal and professional growth.

Key Takeaways and Final Advice

As the episode concludes, Sarah offers invaluable advice to aspiring side hustlers:

Sarah McCaffrey [37:26]: "Start today if you have an idea that you know, you have a vision for it, nobody else is going to make that happen but you. Inspiration is perishable and when you are inspired, you have to run with it."

Nick Loper echoes this sentiment, emphasizing the importance of prioritizing ideas and taking actionable steps to bring them to fruition.

Nick Loper [37:45]: "Inspiration is perishable. That's the note that I wrote down at the very top. The idea wouldn't leave me alone. And so I hope that you have, as listeners, more ideas that won't leave you alone as a result of listening to this show."

Conclusion

Episode 640 of The Side Hustle Show provides a comprehensive guide to starting and growing a consignment side hustle. Through Sarah McCaffrey’s story, listeners gain insights into the practical aspects of sourcing inventory, marketing effectively, managing operations, and scaling a business through franchising. The episode underscores the significance of resilience, community-building, and leveraging technology to streamline business processes.

For those interested in exploring a consignment side hustle, Sarah McCaffrey's journey serves as an inspiring blueprint for turning a simple idea into a profitable and impactful business.

Resources Mentioned:

• Statement Consignment: statementconsignment.com
• Consignment Manager Software: consignmentmanager.com

This summary captures the essence of Episode 640, highlighting the strategic insights and practical advice shared by Sarah McCaffrey. Whether you're considering starting a consignment business or looking to enhance your existing side hustle, this episode offers valuable lessons to propel your entrepreneurial journey.