Primary File

To Consign or Not to Consign?

Lawrence Beyer, Jessica Johnson, Elizabeth H. Jones
January 1, 2017
North America
Strategy & General Management, Entrepreneurship
3 pages
small business, consignment entrepreneurship, Planning, financial modeling, Decision-Making
Student Price: 
$4.00 (€3.7)
Average rating: 

Leslie Arbury, a young graduate student and lover of clothes and shopping, was intrigued by the idea of opening her own boutique. She also noticed growing societal trends of shopping on consignment and of using personal shoppers. She felt that adding a personal shopping option to the consignment shopping experience could provide a great benefit to customers and the market as a whole. None of the consignment shops in her area offered a personal shopper option. Leslie must decide whether to pursue opening her own consignment boutique, as the first in her area to offer a personal shopping experience. Before expending significant time and money, Leslie’s decision required a preliminary financial analysis to evaluate if her boutique is a viable business. This critical incident serves as a forum for evaluating the personal shopper strategy and for examining financial models useful for determining the viability of a small business concept.

Learning Outcomes: 
  1. Identify the stakeholders affected by Leslie’s dilemma.
  2. Evaluate the positive and negative aspects of introducing personal shopping into the current consignment market.
  3. Determine the financial feasibility of this venture. Include a break-even analysis, a cash budget, and a long-term net present value (NPV) analysis to determine if Leslie should move forward with the development of a business plan.