640: Get Paid to Sell Other People’s Stuff: Starting a Consignment Side Hustle

Summary

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

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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.

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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.

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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."

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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.

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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."

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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).

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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.

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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.

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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.

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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.

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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."

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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.

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Resources Mentioned:

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

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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.

Transcript

[Nick Loper]

Getting paid to sell other people's stuff. What's up? What's up? Nick Loper here. Welcome to the side Hustle show. Because your 9 to 5 may make you a living, your 5 to 9 makes you alive. And this is a show all about making extra money and doing it in a low risk way. And one method I keep coming back to is this idea of starting a consignment business that is selling other people's stuff and just taking a percentage. They get money, you get money, and you've got no upfront inventory risk like you would if you were starting a traditional physical product business. Now, today's guest has been doing just that for the last 10 years, starting as a side hustle, earning over $10,000 from her first consignment event and continuing to grow from there. From statement consignment.com Sarah McCaffrey. Welcome to the Side Hustle show.

[Sarah McCaffrey]

Thanks for having me.

[Nick Loper]

You bet. Stick around. In this one, we're going to learn how Sarah got a critical mass of inventory for those first events, how she marketed them to get buyers in the door, and how you might start something similar in your own area or maybe even online. So, Sarah, my understanding is you're. You're already an entrepreneur. You're running this photography business. You've got young kids, and then this idea gets in your head somehow. You're like, you know what, I'm already juggling a lot. But hey, what's, what's one more ball? Let me see if I could pull this off.

[Sarah McCaffrey]

Yeah, that's exactly how it happened. So I did a kids consignment event selling my kids used clothes. And I had no idea what I was doing. I just showed up, you know, price the things, showed up to sell them. And when I went to pick up my check, it was for 800 and it blew my.

[Nick Loper]

This was you, you selling your kids stuff through. Through somebody else?

[Sarah McCaffrey]

Yes, it was. That's how I got the idea. And after I picked up that check for $800, I just thought, why doesn't this exist for adults? There are a lot of kids consignment events out there and not very many at all for adults. Um, and I just thought, I know so many people with closets full of clothes that are in great condition that people would buy. Why is nobody doing this?

[Nick Loper]

Yeah, why is nobody doing this? Was there a reason that the people running the kids ones didn't do the same thing? It isn't because we've gone those kid event. I don't know if we've ever sold anything there, but we've definitely gone as a customer for them locally. So. Yeah, you're totally right. That's a thing.

[Sarah McCaffrey]

Yeah. And it's funny because a lot of people think they're similar, but adult events are so different from kids. We're willing to buy, you know, whatever for our kids. They're going to be running around outside playing in it. It's fine. But when you're selling adult clothes, you have to find the right audience for it. We're a lot pickier. So the sell through rate's different than kids consignment events. So they just have to be marketed differently.

[Nick Loper]

Okay. Okay. So as far as you could tell in the initial market research, nobody was doing an adult focused clothing event near you. I think our mutual friend Megan was maybe doing furniture consignment nearby, who connected us.

[Sarah McCaffrey]

Yes, she was.

[Nick Loper]

But say, hey, there's an opportunity in the clothing space. And what was your first step in turning that from idea to reality?

[Sarah McCaffrey]

Yeah. Well, first I tried to make the idea go away because it just felt crazy. You know, I have two young kids, I'm running a photography business. I was the breadwinner for my family. It felt crazy to, you know, divide my attention and try to start a whole other business. So I really tried to ignore it for a while, but I got to where I couldn't sleep. Like, the idea would not leave me alone. And so a couple months later, I just decided, you know what? I'm gonna go for this. And that night I found our software that we could use. I had a friend who gave me the name that day who named it Statement. And then I stayed up all night building a website on Squarespace. And I just thought, you know what? This idea will not leave me alone. I have to do it. Like I had no other choice.

[Nick Loper]

I love that line because I've had, you know, that similar feeling. Can't sleep. The idea won't leave me alone. And sometimes it's for, you know, a video that I want to make or some piece of content that needs to get out. And a lot of the times that ends up being a really. Well, not all the time. You know, I'm not going to pretend to have like 100% batting average or 100% hit rate, but. Because sometimes they're total duds. But a lot of times, like, when it's really driven from that deep place of interest and excitement and curiosity, like, it tends to, it tends to, you know, launch with a bang. But now you got to go out and find Inventory. I mean, there's a lot of moving parts here. I got to find a venue, I got to find inventory, I got to market the thing. So walk me through some of these first steps.

[Sarah McCaffrey]

Yeah, well, so, you know, when I started it, I thought, this idea is great. People are going to love this. People are going to be, you know, beating down my door to be a part of this. I thought my goal for my first sale was to have a hundred sellers. And what I found is that it was a lot harder than I realized to find my first customers. And so it took a lot of work, and it wasn't really complicated work, but it stretched me. So I decided that to find my people, I was going to call everybody I knew who had a closet full of good clothes and just ask them. So it, you know, it's a simple thing, but it was terrifying to call people I knew and put myself out there in that way. Um, and so that's really how I ended up finding my first customers, was just getting on the phone and asking the people I knew to be a part of it.

[Nick Loper]

Okay, is there a reason it had to be, you know, a limited engagement, one off weekend type of event versus hey, you got a closet full of clothes, I'll help you sell them through Poshmark or whatever. And I'll take a fee. You can get paid, I'll get paid. Is there a reason it had to be a big event? Like, it seems lower risk or maybe lower involvement to just kind of do like onesie twosie sales?

[Sarah McCaffrey]

Yeah, maybe it seems that way, but I do believe that sense of urgency and that scarcity really drives sales for us. The fact that we are only only open two times a year, total of 10 days a year. So I do think that's, you know, a huge part of our model and also for our owners, for, you know, the sale that I started and then our franchise owners, for it to be a seasonal thing is just so powerful. That's what draws us to it. The fact that we can, you know, work really hard for a few months out of the year and then have some real downtime, you know, as moms, as, you know, business owners, for other things that frees us up to do, you know, whatever, whatever else.

[Nick Loper]

Okay, seasons of Sprint versus seasons of rest versus being always on, always, all the time. Like trying to move inventory and go to the post office, I could see some benefits. Plus the urgency and scarcity of it. So you're messaging, you're calling up all your friends saying, yeah, I'm thinking of putting on this thing. Like what's, what's the opener? What's the pitch here?

[Sarah McCaffrey]

The pitch is, you know, all those clothes that are sitting in your closet that you don't wear, I would love to help you sell them. You know, people have all kinds of clothes that are still in great condition, practically new condition. A lot of things still are new with tags, and they've spent a lot of money on that stuff. They don't want to just, you know, drop it off in a trash bag to donate. Um, so, you know, I was like, let me give you a way to sell. Sell that. I'll help you do it. You'll walk away with a paycheck that you can turn around and go buy stuff that you actually will wear to put in your closet.

[Nick Loper]

Yeah, that makes sense. So it's kind of a win win. Like it's collecting dust anyways. Why don't we turn that into some cash for you? Why don't we turn that into clothes you'll actually wear and go from there? So did you end up getting 100 people to say yes?

[Sarah McCaffrey]

No, no, I had 50. So that first event really did. It was still a lot of people, but it did felt a little bit like a letdown. You know, it didn't meet my expectations. It was harder than I thought it was going to. I think that's an important part of the story to share. You know, for people who are thinking about starting a side hustle, that it likely is going to be harder than you think. Even if it is this great idea that's going to, you know, just blow up down the road, it takes a lot of work, you know, on the front end to get it set up for sure.

[Nick Loper]

Where did you host it?

[Sarah McCaffrey]

Yeah, I hosted it at an event like banquet facility just right down the road. It was a small place and I drained my savings account for that venue. You know, I didn't have much in my savings account, but, you know, I really bet everything I had on this and believed that it was worth it.

[Nick Loper]

What did it cost? Trying to get a sense of, I've got, I've got risk free inventory, but now I do have to put up front for this venue for several days.

[Sarah McCaffrey]

Yeah, I think it was about $3,500 for that first sale.

[Nick Loper]

Okay, so we're banking on. Now we got to get people in the door and you know, a multi day. We've had somebody who was doing craft workshops recently on the show and she was like, I go after these library community rooms or these like community center type of venues where they, you know, maybe charge 50 bucks an hour or less. You know, it's like really, really affordable to rent. And she's just coming in for a, you know, two hour evening engagement. This is a little bit different where it's like I need a secure location where I can leave inventory here for. For several days.

[Sarah McCaffrey]

Yeah, absolutely. And I really thought, you know, we would have a lot of shoppers, so I thought we needed a lot of space to fill out the inventory to give shoppers space to shop. And turns out I didn't need quite that for the first event because, you know, it's half the size that I thought it would be. But we did eventually grow into it.

[Nick Loper]

Yeah, it's. It's something where it's very visual clothing. You know, you can't just have piles and piles. Like you got to have it on hangers and displays and make it. Make it look like a retail experience. Okay. So we've got the facility locked in. We've got 50 sellers on board who give you their stuff. There's a tagging and tracking component to this to say, well, this item sold and that belonged to so and so. And now I got to remember to pay her. You mentioned finding software to do that. Is that still what you're using today?

[Sarah McCaffrey]

Yeah, we still use the same third party software. It's a great system and it makes it so simple for us to pay out our people. We never have errors in our reports. Yeah. So it's a great system.

[Nick Loper]

What software is that?

[Sarah McCaffrey]

My consignment manager.

[Nick Loper]

I'll link that up in the show notes for sure. Anything else on the tools and tech side that just make life easier? You mentioned Squarespace. We'll link that up as well. My consignment manager is great. Anything else?

[Sarah McCaffrey]

No, that's about it. It really doesn't take a lot. Yeah.

[Nick Loper]

Cool. All right, now comes the marketing side of it, you know, getting people in the door to come and buy this stuff.

[Sarah McCaffrey]

Yeah. So to market our event, we. In the, in the beginning, we're just using Facebook. You know, Instagram was really new and at that time, and we created a Facebook event and started promoting that. After a couple of years, we started doing Facebook ads. And the return on investment for Facebook ads you just cannot deny. So we really went all in on Facebook ads and that. That's become our primary marketing strategy.

[Nick Loper]

What's. What's the ad say? Or what's. Give me a. Paint a picture of the visual here.

[Sarah McCaffrey]

Yeah. Our ads generally start with the location, so, you know, now we have 23 locations, but originally it was just the Knoxville sale. And so the ad starts with, hey, Knoxville, come shop up to 400 closets in one place. So we, you know, like to promote how many sellers we have. Generally, we have about 450 at our original LOC location, and that is a massive variety of clothes that shoppers can't find anywhere else. So, you know, it's a really great, unique shopping experience for them, and that's what draws them in.

[Nick Loper]

Yeah, that's. That's great. Is this in conjunction with the Facebook event or the. Ten years ago, we were doing Facebook events? Like, that's less of a thing now?

[Sarah McCaffrey]

No, we still do Facebook events. We still, you know, a lot of our audience is on Facebook. We're now doing probably equal Instagram ads as well. But we get. We get a lot of return from those Facebook events.

[Nick Loper]

Okay. I mean, is there a way to track, like, is this, you know, people showing up, you know, they click on an ad, I guess that results in foot traffic. It seems harder to track than, like, oh, they made an online purchase. And I could see that. That entire click journey.

[Sarah McCaffrey]

Yeah, it's true that it is hard to, you know, know exactly where they come from, but at checkout, we like to ask people, and they tell us how they heard about it, and it's always Facebook or Instagram. We're really active during our sale week, and all of our sellers and shoppers are out there promoting too. We incentivize them to market with us, and that really makes a big difference.

[Nick Loper]

Ooh, how do you do that?

[Sarah McCaffrey]

We do giveaways, so we give them five. Five ways that they can market so they can share our event page. They can tag a friend in the comments, they can post in their Instagram stories, or leave us a Facebook or Google review. And then when they do that, they get entered into a giveaway, and so we draw a winner after our sale for that.

[Nick Loper]

What are you giving away?

[Sarah McCaffrey]

Usually $100 to a small business of their choice, like a local small business. And they get to choose what it's to. Yeah.

[Nick Loper]

Okay, cool. I like that angle of tapping into the crowd here, where it's like, hey, it's in your interest to help fill the store as well fill the event, because if nobody comes, then your stuff isn't selling. More with Sarah in just a moment, including pricing the items, the revenue split between her and the sellers, and more about her marketing blitz right after this. What if you no longer needed five separate apps for your business? Bank account, expense tracking, invoicing, contractor payments and tax planning. I'm excited to partner with our new sponsor Found for this episode because Found is business banking designed specifically for side hustlers, solopreneurs and small business owners like you. Under the hood, you'll find one easy to use app to help manage your money, track your spending, invoice clients and even handle your taxes so you can focus on more important things like running your business. There's no minimum balances, there's no account maintenance fees, and there's no paperwork or credit checks when you sign up. One cool feature, Found calls in Pockets lets you allocate income to certain categories like marketing or taxes or profit, which is really handy if you want to practice the profit first methodology, but you really don't want to set up a bunch of different accounts. Over 500,000 small business owners like you chose Found as their banking solution. So stop getting lost in countless finance apps and try Found for [e-mail] Sidehustle Sign up for Found for Free today at F o u n d.com Sidehustle. Found is a financial technology company, not a bank. Banking services are provided by Piermont bank member fdic. Found's core features are free. They also offer an optional paid product Found Plus. Here's a quick side hustle you can do today. It's called the Substitution game and it's an easy way to score what I call reverse passive income in your life. That's money you're no longer spending every month. That goes straight to your bottom line. How it works is you find lower cost alternatives to the things you're already spending money on. For example, I made the switch to our sponsor Mint mobile back in 2019 and haven't looked back. Mint Mobile offers Premium Wireless for 15 bucks a month when you purchase a three month plan and all plans come with high speed data and unlimited talk and text delivered on the nation's largest 5G network. You can use your own phone with any Mint Mobile plan and keep your existing phone number along with all your existing contacts. To get this new customer offer and your new three month premium wireless plan for just 15 bucks a month, go to mintmobile.com sidehustle that's mintmobile.com Sidehustle cut your wireless bill to 15 bucks a month at mintmobile.com SidehustLe $45 upfront payment required equivalent to $15 per month. New custom on first three month plan only speeds slower above 40 gigabytes on unlimited plan. Additional taxes, fees and restrictions apply. See Mint Mobile for details. Do you have to price everything or determine what these hundreds of different items might be worth. Or that seems maybe you just crowdsource it and say, hey, it's your blouse. You know, tell me what you want for it, and we'll stick a price tag on it.

[Sarah McCaffrey]

Yeah. So our sellers price things themselves, so when they drop off their items, they are ready to go. The price tags are on them, and, you know, it's ready to be put on display. And we give them a guide in advance so they know how to price their items. And we generally recommend between 50 and 80% off retail price. So that gives them a good guide, and that helps our shoppers know what to expect when they come up. Come to shop too.

[Nick Loper]

Yeah, that's. Hey, Knoxville, come shop. Up to 400 closets in one place. 50 to 80% off retail.

[Sarah McCaffrey]

That's the ad. That's it.

[Nick Loper]

All right, what's the revenue split for you as the consignment host versus what gets passed along to the sellers?

[Sarah McCaffrey]

Yes. So the sellers keep 60% and the consignment owner keeps 40%. It's one of the best splits that you can find. I actually did an online consignment recently just to test and see, you know, what. What's our competition doing out there? And on a pair of jeans that I paid $200 for, I made $5 at this online reseller.

[Nick Loper]

Wow.

[Sarah McCaffrey]

And so that. That just showed me the power of what we're doing with Statement. Our sellers are earning a much higher percentage than they'll find anywhere else.

[Nick Loper]

Got it, got it. Is there an online component where it's like. I mean, the. The E commerce store where people inventory and place an order?

[Sarah McCaffrey]

There's really not. No. We really believe in the power of the in person sale. And so much of what we do at Statement is building our community. So we want those people in the building, we want them shopping, we want them, you know, becoming sellers at our next event. Then they show up and help work the sale too. So, yeah, we really find that the power of the Statement business model is in people showing up in person. So we do not offer online sales at all.

[Nick Loper]

That makes sense. Okay, so we're getting people in the door through the Facebook event, marketing friends and family. The sellers are helping, helping out. Hey, spread the word. We're doing Facebook and Instagram ads. Anything else to get people in the door? Even. Even going back to event number one.

[Sarah McCaffrey]

Yeah. So we do. We always do local media, so we go on the news to talk about it. We do an ad in the local newspaper, we put out yard signs, we take flyers to local businesses. I mean, we really max out our marketing. That, that's, that's really what the job is with statement. It's, you know, getting more shoppers in the door. So that's the bulk of my time is spent marketing the event.

[Nick Loper]

I believe it is. It's, you know, limited time only. It's got to happen now or it's not going to happen.

[Sarah McCaffrey]

Yes.

[Nick Loper]

What's the pitch to the local, the local news channel or local news station to say, you know, it seems very self serving to be like, would you run my story? So I have to imagine there's a better PR angle than that.

[Sarah McCaffrey]

Yes. Well, their audience is looking for a good story, something exciting that's happening and, and people love to shop. So yeah, we find that our local, you know, news stations are really excited about having us on and we also sometimes incentivize them and get, give them a pre sale shopping pass so they get to shop before everybody else and then they become fans of statement too. And a lot of our local news reporters are now sellers at our sale and they come shop every time.

[Nick Loper]

Oh, okay. Makes sense. All right, so let's say it is opening day. You have done your best to spread the word to make this a thing. If you're, if you happen to be in town and in the market, you know about it and then the doors open and talk to me about staffing and logistics and kind of the day of or the week of the event.

[Sarah McCaffrey]

Yeah, so the week of the event can be overwhelming. It takes a lot of energy. It's a lot of hours to put in, you know, during that week of the sale. And we have developed all the systems and processes since that first sale 10 years ago. And it's been a growing process. You know, there are plenty of mistakes along the way, but we've put together systems to try to make that predictable for our shoppers and for our sellers sellers. We try to keep the room really organized. You know, at the Knoxville sale, we now have over 50,000 items that show up within three days that we have to, you know, get on the display floor and sell within five days.

[Nick Loper]

Wow.

[Sarah McCaffrey]

So it really is a time crunch and it does take, you know, a pretty big workforce. The beauty of that is that our statement sellers also become our workers. So we usually have about 150 of our sellers who will show up and work shifts. They get paid hourly and they are the ones who really make the event happen. The week of the sale, we really did Depend a lot on them. And they have a sense of ownership of the sale because, you know, they're selling their items too, and they want shoppers in there buying their stuff. So that really helps go a long way with our workforce.

[Nick Loper]

Okay, that's, that's helpful to know. Like. No, this is just not with, with 50,000 items of inventory. This is not just you at the cash register taking payments. This is. It takes a village.

[Sarah McCaffrey]

It does. It takes a village. Yeah. So we started at that first sale with one cash register and now we're up to five. You know, it takes a lot of, a lot of staffing to, to get shoppers in and out the door to try to reduce reduced lines. We don't want them waiting in lines for a long time. So, yeah, it does take a lot of people to make it work.

[Nick Loper]

Is this just like, I'm picturing like a square, you know, credit card reader or something like that? Point of sale?

[Sarah McCaffrey]

Yes, similar to that.

[Nick Loper]

Okay. What happens to the stuff that doesn't sell? Or I mean, I guess I'm curious in the, in the mark of a good event, a 50,000 item event, like what, how much is left over at the end of that?

[Sarah McCaffrey]

We still have a lot left over. You know, we sell a lot of stuff. But the difference with adult consignment is it's a lower sell through rate than kids consignment because adult are just pickier about the way things fit and the brand and the color.

[Nick Loper]

Yeah.

[Sarah McCaffrey]

So it is a harder sell. So we do have a lot left over still at the end. But our sellers can come pick up what doesn't sell. That's up to them. And whatever does not get picked up is immediately donated. And we fill a massive trailer full of donations every time. That really makes an impact too. Those donations go to a good place.

[Nick Loper]

Yeah, I got it. Okay. If you want it, if you want it back, if you want to try and sell it on your own, if you want to try and sell it at the next event, you're welcome to do so. And if you just want it out of your closet, hey, we'll donate it for you.

[Sarah McCaffrey]

We'll take it off your hands. Yes.

[Nick Loper]

All right, so five days done. The dust settles after event number one. You've sold as much stuff as you could sell. You've recouped your investment in terms of the venue, in terms of the advertising, and now you're like, I guess we just keep doing that every six months. Like, what, what happens, what happens next?

[Sarah McCaffrey]

Yeah. So after the first couple of Events. It's interesting. Everyone in my life who loved me encouraged me to not keep doing it because it was such an investment of my time and my energy. And in the beginning, it was a very small return. You know, I did. I didn't go, you know, in the hole, but in terms of profit, it was minimal.

[Nick Loper]

In terms of, like, the effective hourly rate that it. That it took to create that.

[Sarah McCaffrey]

Yes. Yeah. Is this really worth it? Are you sure you want to keep doing this? And it just took a lot out of me because it's a lot of interacting with people, and I'm naturally more of an introvert. So, you know, it's just demanding of me, me to make it through that week. But that's something that I decided is worth it. I have this vision. I see where this is going. I believe in it, and I'm going to keep doing it, despite what the other people are telling me I should do.

[Nick Loper]

Yeah, people are telling you maybe not. And maybe the math, it worked. It wasn't a money loser. But in terms of the hourly investment and just like, the effort and energy that went into it, like, ah, you know, should I have just, you know, gotten another job or booked. Booked more photography gigs, whatever it could have been.

[Sarah McCaffrey]

Exactly.

[Nick Loper]

But you see this path forward, like, well, you know, I think there's a. I think there's a way to turn this into something else. And so you do dust off and say, okay, we're going to do this again. And then it's a matter of, I guess, reengaging the same sellers, expanding the network of sellers to try and make the next event bigger, better, faster, more profitable.

[Sarah McCaffrey]

Yeah, absolutely. And the primary way we did that is as shoppers were checking out, we connected with them individually and said we would love for you to sell at our next event. You know, at that time, it was just a pencil and paper. Write down your email address here. We'll add you to our list. Now we have QR codes. They can scan to automatically sign up. You know, it looks a little fancier now, but in the beginning it was just bare bones and just asking people one at a time to show up next time. And now we end up with about 80 to 90% of our sellers are return sellers each time. You know, so once they get that paycheck, they want to come back and keep doing this.

[Nick Loper]

That makes sense. And I really like the tactic of adding shoppers to the email list. To your point earlier about the Facebook ads, it's like, that's still an anonymous person even when they walk in the door, we don't know who they are, but when they check out and they buy something, there's that point of interaction where you could say, hey, even if it's just pen and paper, you know, now we can get a little more automated, a little more technical with how we capture that email, but like some way to contact that person again versus just a stranger of the night that we'll never see.

[Sarah McCaffrey]

Yeah, they just walk out the door, never to return. Yeah, we're always trying to get them to come back. And most of our shoppers actually come back multiple days. You know, we're open for five days and so a lot of them will come shop three of those five days. So it's not like they just show up once they, they come back over and over again each event interesting.

[Nick Loper]

And you find it's almost like a circular inventory flow where there's some, some people I imagine are buyers only. But it sounds like a lot of the sellers are buying each other's stuff and they're working the event and they're coming back and doing it again day after day and year after year.

[Sarah McCaffrey]

Yeah, absolutely. It is a cycle we see. It's so funny. A lot of my friends will end up buying my own IT items. Yeah, it's interesting to watch, you know, your, your clothing get a second life somewhere else.

[Nick Loper]

Yeah, we, it's like we get a lot of hand me down clothes for the kids and whenever we go and visit them, they're always like, I remember that shirt. Or you know, that was a favorite, you know, and it's just, it's getting a second and third life.

[Sarah McCaffrey]

Exactly.

[Nick Loper]

@ what point do you say, okay, I'm limited here by just inventory supply. I'm limited here by my own. Like there's, you can't do this every weekend because then it doesn't have that event urgency feel to it. But I could do, if I was in a different, if I had, if I had a different inventory pool to pull. At what point do you start looking at this geographic expansion?

[Sarah McCaffrey]

Yes. So a couple of years in, I started noticing that people kept asking me to do, you know, bring statement to another city. People were traveling in from other states to shop our sale. And I really started thinking, you know, do I want to do this somewhere else? And I decided I didn't have the energy to, you know, do additional events in other locations. But what I could do is put together like a business in a box and let other women, you know, purchase that. And I teach them how to run their own consignment sale in a different location. And that's been how we've expanded.

[Nick Loper]

This is pre franchising or this is the franchise?

[Sarah McCaffrey]

This is the franchise, yeah.

[Nick Loper]

Okay, what, like how, how long ago, how long has that been going?

[Sarah McCaffrey]

So we started franchising in 2022. But it's an idea that I had for probably five years before that, you know, yet again, it was one of those scary ideas. Why would I do this? This feels crazy. You know, this business is going great. Why would I, you know, start a whole new thing? But yet again, it was another idea that wouldn't leave me alone. And I saw the power of this business model. You know, it really makes an impact on people's lives. It gives them a way to make some extra cash when they need it. It gives our shoppers a way to save money on clothes that they need to buy, you know, and then we benefit, you know, local organizations too. And I just was excited about the possibility of seeing that impact fact expand outside of my own reach, my own territory.

[Nick Loper]

Yeah. And it's something where if you can lay the groundwork and build that network, like it sounds like you have become the go to person for this network of fashion minded clothes, like women and moms to buy and sell stuff. And like if you could become that central hub and really start to build the event over time. Like the example near us is not in clothing, but it's, I guess like winter clothing and outdoor equipment. It's the Newport High School Ski swap, like been going on for as long as I can remember, like 30 plus years. And there's a big fundraiser in their case for the pta. But it's become an event that people know to look forward to. They know that's where they're going to get their gear and they know that's where they could sell their gear too. So it's something that over time I think can really start to snowball a little bit.

[Sarah McCaffrey]

Yeah, absolutely. And especially when it's that limited time, it's like you only have this one week to do it. So people don't miss it. They make sure they get it on their calendar.

[Nick Loper]

The franchise thing is always as I see, like diverging paths here. Number one is like, you know, recruit, you know, boots on the ground. You're going to be my agent in Nashville, you're going to be my agent in Memphis, in Atlanta, wherever. And that's one way to go. And then the other way would be, well, why don't I just create the online course? It's like very Popular on the side hustle show. I'm just going to create the online course, how to start your consignment business. And then lane number three is like a much steeper mountain. And this is the kind or the franchise route where it's like, I got all this regulatory red tape and franchise disclosure requirements. Like, it's a steeper, steeper, more harrowing path.

[Sarah McCaffrey]

Yeah. It's funny you use that metaphor because I'm a hiker, so of course I preferred the steep hike up the mountain. And the funny story is that I actually did try to start doing it as an online course, and I actually put it out there. I had two buyers, and it actually was a decent amount of revenue. And, like, the day that I sold those, my body was like, no, this is not right. I don't feel good about this. This is not it. And I refunded their money and said, I'm so sorry. You know, I. I just don't feel right about this. It doesn't feel like the right move. And so they got their money back, and it took me a few more years to actually put the franchise model together. Together. But I just knew that was the real way to go, the real mountain we needed to climb.

[Nick Loper]

Yeah. What. What's different in your mind versus, like, hey, here's the. Here's the playbook. It's in, you know, on demand video format versus, like, a more structured, you know, playbook, processes, guidelines, like on the franchise side.

[Sarah McCaffrey]

Yeah. So as. As a franchise, we are just so much more fully developed. We, you know, they get access to everything they need.

[Nick Loper]

Yeah.

[Sarah McCaffrey]

And not only, like our operations manual that they can read through, that essentially could be an E course or something like that. Get access to me and our corporate office. That is emotional support. You know, we're their business coach, their emotional support. We hold their hand, we answer the phone when they're in tears and don't know how to handle something. All of those things that are so hard as a new business owner when you're just figuring it out on your own, they get support through those things. So it's just a much better way for us to serve them.

[Nick Loper]

Yeah, that makes sense. So you're at 20. 23 locations.

[Sarah McCaffrey]

I think you said 23 locations. Yeah. It's wild.

[Nick Loper]

Expanding and more to come.

[Sarah McCaffrey]

Yes, and more to come. Yeah, we. This. We started 2024 with eight locations, and now it's October and we have 23 and hopefully a couple more by the end of the year.

[Nick Loper]

Yeah, that's great. People are taking it and Running with it. More with Sarah in just a moment, including some of the mistakes and challenges that come with running this business, where her time is spent today and her goals for the future of statement consignment right after this. Being an entrepreneur and being able to work remotely definitely has its perks. I've recorded podcasts everywhere from Vietnam to Italy, drafte newsletters from Japan, hosted mastermind meetings from Spain, ended up being the middle of the night to get to US Business hours, and outlined courses in Mexico. The common thread of all of these trips, though, is Airbnb. We love being able to get exactly what we're looking for in a place to stay and have a more local experience than staying in some giant hotel chain. And you know me, I'm always thinking about the next side hustle idea, the next income stream. Right. And one that's at the top a list is hosting our place on Airbnb while we're traveling. That way the house doesn't have to sit empty. We could use the income to help pay for the trip. And we've heard from several successful Airbnb hosts on the show. And what's interesting is a lot of them started with almost that exact strategy, renting their place or even a spare room while they're out of town. Taking inspiration from that, you might have an Airbnb right under your nose. In fact, your home might be worth more than you think. You can find out how much at Airbnb. That's Airbnb.com host to find out how much your home is worth. Now, earlier you mentioned some mistakes that were going on during these sales. I'm curious if you have a story or two about a mistake or something that surprised you in running the consignment events.

[Sarah McCaffrey]

There are some challenges at the end of our sale when our shoppers or actually our sellers are coming back to find their items that didn't sell. And sometimes it can be really hard to find find them. And of course, you know, we have some things that go missing, you know, that happens in any kind of store situation. And I always let someone else handle that because it was, you know, some negative feedback that I didn't want to have to deal with. And, and that did not go well. And I learned that I need to handle those complicated situations myself and be able to handle that negative feedback and kind of grow a backbone. And so that's something that I really did learn over time is how to handle handle that as a business owner.

[Nick Loper]

Yeah, that is a scenario where we often wish that the house was as easily searchable as Gmail. It's like, where is this? Where are, where are the keys? Where's my hat? Where's the thing? And it's got to be the same here. You're looking at thousands of items of inventory. Well, where's my stuff? You know, I didn't want it to be donated. I didn't sell. I want it back. Needle in a haystack. In a lot of ways it is.

[Sarah McCaffrey]

Yeah. And 10 people can go look for that item and it's the 11th person that finds it, you know?

[Nick Loper]

Yeah.

[Sarah McCaffrey]

It can be a challenge.

[Nick Loper]

Yeah, yeah. You know, there's a hundred pairs of jeans here. Which one is yours? Like, I don't know. Take. Take one that looks similar. No, that's somebody else's. Anything else surprised you in, in running these?

[Sarah McCaffrey]

Yeah, it always surprises me, people's excitement about it. You know, I've always been excited about it and had this vision and this dream, but it still surprises me when people line up outside the door to get in, you know, on our first day or on our half off day. And, you know, they just about charge the room. Like they're so excited to get in there to shop. And I've now had 21 sales. And that never gets old. That never doesn't surprise me how excited people are.

[Nick Loper]

Yeah. I'm picturing like the Walmart Black Friday type of crowd. Like, oh, when is the door? I get it open. Okay.

[Sarah McCaffrey]

It's similar. Yeah.

[Nick Loper]

You mentioned half off day. I would be remiss if I didn't poke at that for a second. So this is the end of the thing, like, everything must go type of deal.

[Sarah McCaffrey]

Yeah. So our last day, our sellers get to decide if they want to discount their items for half off day day. And so on the price tag, it will say discount yes or discount no. And if it's discount, yes, it'll be half off.

[Nick Loper]

Okay. Okay. This is something that our local, you know, sporting goods consignment does too in a different way. They're like, here's the price. You know, here's the price after December 1st. Here's the price after December 15th. And they kind of like stair step it down. And so as the, as the buyer, as the shopper, I'm like, do I gamble? Do I wait? And it's like, ah, yes.

[Sarah McCaffrey]

It will not be there if you wait.

[Nick Loper]

Yeah, yeah, yeah. So I stress. I was like, ah, forget it. I just, I'm here now. Like, let's just do it.

[Sarah McCaffrey]

Yeah.

[Nick Loper]

So that's really interesting. Like a little Psychological play here, you know, that people could see on the tag. Like, I should probably just get it now.

[Sarah McCaffrey]

Yeah, yeah, exactly. Yeah. It's like, we want it to sell, so that's. That's our, you know, last effort on half off day. Like, take this stuff. Come on, we're about to close. We want it to go out the door.

[Nick Loper]

Okay, fair enough. Where. Where does your time go in these days? You still doing photography or where is. What's a day in the life?

[Sarah McCaffrey]

No. So once I started franchising, photograph ended completely. I walked away from that because I just saw the vision for this is so much bigger. So I went all in with statement. And so most of my time is now spent on the franchise statement in Knoxville. My original event. Now, you know, we have so many systems and processes that are automated that it does not take a lot of my time and energy these days. So I'm able to give my time and energy to other business owners who are ready to start their own consignment sales in their cities. And that's, you know, what I'm doing day to day.

[Nick Loper]

All right, that's exciting. Any goals or things that you're excited about coming into the new year?

[Sarah McCaffrey]

Yes. I'm planning to build a house in the mountains. That's my personal goal. And just keep growing this franchise. My goal is for us to have 100 locations, and once we do that 100 more, the demand for this is just increasing. Even in Knoxville, we have two locations locations, and we have wait lists of hundreds of people even with two locations. So we just want to get this out there to the people. I think people are ready for it. They're looking for it. So we're just going to keep growing.

[Nick Loper]

It's interesting, we were putting together this post on the site of, like, what are the best items to flip for a profit? And we came across this secondhand fashion, and I forget if it was Thredup or Depop or one of these services, but they showed the chart just, like, going up and to the right of, like, how it's a climbing trend, whether it's from a sustainability standpoint or a cost saving standpoint, but just people buying more and stuff. More stuff secondhand.

[Sarah McCaffrey]

Yes. I actually just looked at that report yesterday. The Thredup report. Yeah. And I think it says this year that resale is supposed to grow 15 times faster than retail. I mean, consumers are just looking for, you know, the opportunity to buy secondhand more than ever, and it's just blowing up. So it's a really smart time to get into this industry.

[Nick Loper]

Do you think, think it's a cost savings motivator? What's, what's driving that?

[Sarah McCaffrey]

I think originally like 10 years ago when I started that was the primary force and I still think it's the number one reason for the growth. But I think more people are interested in sustainability and you know, doing things that are good for the environment and this is an opportunity for them to shop in a way that isn't harmful for the environment.

[Nick Loper]

Yeah, I think it's, it's a really interesting place to play in from the crowdsource inventory without any upfront cost. It's a super, super fragmented market. Like it didn't even exist in your area. You know, the kids event existed and say well I could take that idea, pivot it to a different niche, a different market and go to town with that. Like in our area the ski swap exists but I don't know if like the clothing market exists so super fragmented or non existent to say there's an opportunity to come in and build that, to make it a thing and hopefully have that kind of longevity and staying power where you know, each year kind of snowballs and builds a little bit more momentum. So really interesting stuff and completely different. I thought this was going to be, you know, poshmark and you know, take people's stuff and you know, just you know, message my friends and neighbors, hey, you got some stuff lying around, I can help you sell it. We've done little segments on ebay consignment where we had a woman who was doing like, she specialized in these, you know, one particular brand of doll that you know would go for hundreds of dollars and just became known as that go to person really building up your network and reputation in, in a specific industry can, can work really well. But that's what's. I don't know. There's some, some notes that's been going on in my hand. Statement.com mint like, like minting a coin. Statement consignment.com is where you can find Sarah or consignmentfranchise.com if you want to learn more about that and maybe setting up something like this in your own town. Sarah, this has been awesome. Thank you so much for joining me. Let's wrap this up with your number one tip for side Hustle Nation.

[Sarah McCaffrey]

Yeah, my number one tip is to 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. And I believe insp. Inspiration is perishable and when you are inspired, you have to run with it. So start today, put pen to paper today, make an appointment, you know, get it on your calendar and actually get it going today.

[Nick Loper]

Absolutely. If it's not on the calendar, it doesn't exist. It's not going to happen. Right. You got to prioritize it. And there's a, there's a little print on our wall in the hallway. So, you know, everything got a lot easier once he realized there was exactly enough time for all the things that were important to him. And that just is a little reminder for me. It's my to do list is never ending. There's always more ideas than there are time. But it's like, hey, by definition, you vote your priorities with your time and say, okay, this is what is going to get done. 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. Just something that we got. We got to give it a shot. So very much appreciate you joining me. If you're new to the side Hustle show, thank you for joining us today. Make sure to hit that subscribe, subscribe or follow button in your podcast app. That way you'll never miss an episode. We've got some great stuff coming up and if you're staring at that 600 plus episode archive and you're wondering, where am I supposed to start with this one easy thing? I would love to have you binge on the whole archives. That'd be awesome. But one easy thing you can do is get yourself a personalized playlist. How it works is you go to Hustle show, you answer a few short multiple choice questions and it will recommend an 8 to 10 episode playlist based on your answers. Episodes that hopefully are going to be the most relevant and most impactful for you based on your side Hustle interests, your side Hustle goals. Again, that's Hustle Show. Thousands of listeners have already claimed theirs and I want to invite you to be next. Big thanks to Sarah for sharing her insight. Big thanks to our sponsors for helping make this content free for everyone. You can hit up side hustlenation.com deals for all the latest offers from our sponsors in one place. That is it for me. Thank you so much for tuning in. If you're finding value in the show, the greatest compliment is to share it with a friend. So fire off a text message. Maybe it's your thrifty neighbor who loves looking at different clothing items and say, this might be perfect for you. Until then, let's go out there and make something happen and I'll catch you in the next edition of the Side Hustle Show. Hustle on.