The WEBworks Consignment Store "How To" Manual

Welcome! If you are considering starting a consignment business, this free manual can help! The WEBworks wrote WACI, the software used by Nine Lives, a consignment store in Los Gatos, California, USA. This manual is based on the Nine Lives consignment business and WACI software, but it contains information that would be helpful to anyone starting a consignment business. The WEBworks can help make your new business successful. Read on for the information you need to make the right start.


The Basics - What You Need to Know To Begin
Store and Accounting Systems
Consignors and Inventory
Customers and Sales
Day-to-day Operations
Closing the Month

A consignment business is based on three things:

  1. Your Business - Store and Accounting Systems

    Begin with the basics. Most businesses will require one or more of the following steps:

    • Creating a business plan that includes estimates of startup costs, sales revenue, business overhead, and profit.
    • Choosing and registering a business name
    • Opening a business checking account
    • Obtaining a business license
    • Choosing a location
    • Purchasing store fixtures, such as merchandise displays or racks

    If you do not already have a location selected for your business, you may wish to start with this important step. Choosing a location is critical to the success of your business, so it deserves some careful thought and a little luck as well! Here are some tips for choosing a good location:

    Before you can make your first sale, you need to organize your business, and collect items from consignors for inventory. You need a system for keeping track of consignor accounts and the items they have consigned with you. Here are suggestions for a basic consignment business system:

    WACI consignment forms are available for purchase separately from WACI, and they can make your business look great! Would you like to see how these forms look with your businesse name on them? can

  2. Consignors and Inventory

    Most consignment businesses cannot open until they have enough inventory to offer shoppers a reasonable selection. Your initial inventory must be large enough to satisfy your shoppers, but not so large that you have to wait too long to open your business while you collect it. Plan on spending your first month or two collecting inventory, not running the store. Use this time to take consignment appointments and organize your store.

    As you work with your first consignors to start your inventory, practice your skills for the day your business opens:

    • Stick to your policies! The inventory you accept will be with you for months, and it sets the quality standards for your business.
    • Learn to evaluate your inventory! Be critical and detail-oriented. Don't let your future customers catch flaws in the inventory that you should have seen.
    • Ask for referrals - suggest to consignors that they tell their friends about your new business.
    • Ask about competitors - consignors are frequently your best source of information about other businesses in your area. Ask consignors about pricing, their favorite stores, what they like in a consignment store.
    • Ask for help on pricing. Consignors know what the original prices were on most items they consign. Use this information, and your policies to set the price for each item. Price items as high as you can, but remember: pricing too high will stop sales! In the beginning, try to price some items high, and some low, to determine where your market pricing level lies. Over time you can develop a sense of how to pick the best prices for all of your different types of items.

    Label everything in inventory. Nine Lives uses heavy paper for inventory tags, with the store logo on each tag. Inventory tags should include at least:

    • Account and Item Number
    • Date item was placed on display
    • Item description
    • Item price

    Nine Lives adds brand, material, size, and color to their inventory tags to make it easy for the customer to evaluate the item.

    Inventory tags can be attached to items with small "guns" which "shoot" a plastic tie right through the tag and into the item material, or into holes in the item.

    Location of inventory tags will be different depending on the item, but be consistent. For example, on men's shirts, always attach the tag to one sleeve, either left or right. Customers will appreciate finding the tags easily while shopping.

    WACI Tip: WACI software includes sample inventory tags.

    Before you open the door for the first time, the store must be well stocked with inventory, and it must be clean, well organized and attractive. Your inventory should be grouped logically (Nine Lives groups items according to garment type, size, and color) and accessible for easy shopping. You may need special displays of fixtures to create the right presentation for your inventory. There are many sites on the web with information about store fixtures and merchandise displays. Spend some time browsing these sites, and consider requesting catalogues so you can easily find and order what you need to have a successful opening day.

  3. Customers and Sales

    When opening day arrives, you must be ready to make your first sale. Prepare yourself for business with:

    • A "bank" of cash and coins large enough to handle a day's worth of sales. Use your own judgement on the amount of cash to have in the bank, but plan on having about one quarter of anticipated sales. For example, if you anticipate selling one thousand dollar's worth of items, have a two hundred and fifty dollar bank.
    • Sales receipts.
    • Credit card receipts, if you accept credit cards.
    • A calculator to total sales receipts.
    • A tax table, if your area requires sales tax.
    • Brochures listing your policies and business information.

    Soon your first customer will arrive!

    When making sales, follow these steps:

    • Clip the inventory tag off of each item.
    • Date and number the sales receipt, and indicate form of payment - Cash, Credit, Check
    • Enter a short description of each item on the receipt, and the price of each item. Make sure you enter at least the account and item number.
    • Add up the subtotal, calculate tax (if any) and place the grand total at the bottom of the receipt.
    • Now is the time to state your return policy!
    • Collect for the sale, and give the customer their copy of the receipt.
    • Staple the inventory tags (and credit card voucher, if you accepted a card) to the store copy of the receipt, and file the completed receipt.

End of the Day

At the end of the day, you need to organize your sales receipts, count your cash, and update your consignor records.

  1. Separate your receipts into cash, check, credit and mixed groups. Total each group.
  2. Count your cash, and verify that your cash sales match the extra cash you have in your "bank." Set the extra cash aside to be deposited.
  3. Add the totals for cash and checks together. This is the amount you will deposit.
  4. File the totals so you have a record of today's sales.

If you have a manual system, check off sold items on each consignor's intake sheet, noting the sales price if it is different than the listed price.

WACI Tip: There is no need to manage the intake sheets with WACI. Entering the items as "sold" automatically updates the consignor's account.

Handling Expired Items

Every week or so, check your inventory for expired items. Items that have been in your store longer than your consignment period must be dealt with. If items are not selling, follow your item return policy. Get those slow movers out of your store!

WACI Tip: WACI creates a list of expired items whenever you like. Items on the list can be deleted, marked as "Picked Up", or extended for another consignment period.

Keep your inventory as "fresh" and up-to-date as you can. Shoppers remember items longer than you might think, and a store full of items that never sell creates the wrong impression (not to mention how it hurts your business!). Some items may take longer to sell, such as expensive items, or items that are not seasonal. These items can be extended for additional consignment periods to give them extra time on display. If you extend an item more than one time, however, it is probably a sign that that particular item is not interesting to shoppers. Consider returning the item to the consignor to make space for new inventory.

End of the Month

After the last day of every month, it is time to total the month activities and pay the consignors.

For stores with manual systems:

  1. Add up the grand totals of your sales. This number is used to determine your profit.
  2. If you collect sales tax, total the taxes collected as well.
  3. Work through your consignor accounts, adding up sales for each account. Apply the split percentage to the total.
  4. Write a check for each consignor.
  5. If you collect sales tax, write a check for collected taxes to the proper agency.
  6. Create a "monthly summary" page listing your sales, taxes, totals of checks written to consignors, and the total of other expenses for the store, such as rent.
  7. Total the page - the final number is what you need to calculate to determine if your business is generating a profit.

For businesses using WACI

  1. Create drafts of reimbursement letters. Review each letter carefully, as it includes a list of items sold, sale prices and the amount of the reimbursement for that consignor. If you see errors, correct them and re-run the drafts.
  2. If the drafts look good, run finals. This makes a permanent record of the sales for each consignor. If you choose to print from WACI, you can print the reimbursement letter, check and mailing label for each consignor.
  3. Enter your expenses for the month.
  4. You are finished! All the accounting for this month has been done for you automatically. Use the reports menu of WACI to check your profits for the month and compare this month to previous months.


You have just launched your business. Of course, there is much more to running your business than this, and more information will be added to this manual over time. The WEBworks can make your new consignment business easier by automating much of the work involved in tracking consignors and items with WACI consignment software. Why not take a few minutes and
test-drive the WACI demo right now!

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