A common scam existing at the time involved wholesalers who would ship their products to retailers who had not ordered them. Upon refusal, the wholesaler would offer the already price-hiked items to the retailer at a lower consignment cost in the guise of alleviating the cost to ship the items back. The unsuspecting retailer would then agree to take this new-found bargain off the wholesaler's hands, mark up the items and sell them to the public, making a small profit in the transaction.

In 1887, Sears moved his company to Chicago, an important transportation center for the mid-west. The same year, he hired watch repairman Alvah Curtis Roebuck to handle many of the returns that needed repair. Roebuck was not only Sears's first employee, but he later became co-founder of Sears, Roebuck & Company. The Sears, Roebuck and Co. was officially formed in 1893, when Sears was 30 years old. A few years, later, when Roebuck left the growing company, Sears went on with another new business partner, clothier Julius Rosenwald, who became president of the business in 1908 upon Sears' retirement at age 45.