Thursday, March 29, 2012

When Consignment Goes Belly-Up

Consignment shops are a great resource for the frugally minded.  First, they offer a great place to shop.  You'll save money (if you shop with intention and not just as entertainment) and you'll give old items new life.  Second, consignment shops are a great way for people to convert clutter into cash.  I've used one (Puttin' on the Ritz in Middleton, Wisconsin) for nearly 10 years.

With the recent economic downturn, consignment shops have sprung up all over America.  People are shopping, people are consigning, and apparently here in Madison, people are buying consignment shops without really looking at the numbers.

Monday's edition of the Wisconsin State Journal contains an SOS -- a piece where the paper aims to help readers with a problem.  Lady Moxie is no longer, it closed last year.  The story in this week's newspaper stated the fact that many who consigned with Lady Moxie are out their items and cash.  The original owner of the store went through a divorce in 2007 and opted to sell the store to an employee.  The employee bought it, not really looking at the numbers, and it ended up in bankruptcy.  Now the doors are locked, and the items locked away.  The last owner stated "I don't think it ever made a profit."

This story has two lessons in it for those studying the art of frugality.  One, don't consign items that you really want the cash back from.  View it as a bonus if it sells.  If it is that important that you get the cash, sell it yourself.  And second, avoid impulse buys....especially if the purchase can cost you your home, care, marriage (the second owner divorced as well) and more.

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