A consignment store offers a way to sell secondhand items through a retail partner. This business model is built on an agreement where an individual, known as the consignor, provides goods to a store, the consignee. The store then sells these items on the consignor’s behalf. This arrangement allows sellers to access a retail market without managing the sales process themselves.
The Consignment Process for Sellers
Finding the Right Store and What They Accept
The first step for a potential seller is finding a consignment shop that aligns with the items they wish to sell. Stores often specialize in specific categories, such as designer clothing, furniture, or athletic gear. Researching a store’s specialty ensures your items fit their curated inventory and appeal to their customer base. A high-end boutique focused on luxury handbags, for example, will not be the right fit for mainstream clothing brands.
Many shops have specific brand preferences and may only accept items that are currently in season to meet customer demand. Visiting a store’s website or contacting them directly can provide clarity on the brands they favor and their seasonal intake schedule. This research increases the likelihood that your items will be accepted for sale.
Preparing Your Items for Consignment
Before bringing items to a store, proper preparation is necessary to meet quality standards. Consignment shops require that all goods be in excellent, gently used condition. This means items must be thoroughly cleaned, free of any damage like stains or tears, and ready for the sales floor. For clothing, this includes laundering, while furniture may need cleaning.
Presenting your items in an organized manner can also make a positive impression during the intake process. Keeping clothes on hangers or organizing smaller goods neatly can streamline the store’s evaluation.
The Intake and Selection Process
Most consignment stores require an appointment to bring in your items for consideration. During this intake process, the store’s staff will examine each item to determine if it meets their criteria for quality, brand, and current inventory needs. They curate their selection to maintain a specific standard and appeal to their shoppers.
The store has the final say on which items they accept. Their decision is based on what they know sells well, the current condition of their stock, and what their customers are looking for. Items that are overstocked or do not align with their brand identity will likely be declined, even if in good condition.
Understanding the Consignment Agreement
Once items are selected, you will be asked to sign a consignment agreement or contract. This legal document outlines the terms of your partnership with the store. It is important to read this agreement, as it details the responsibilities of both the consignor and the consignee.
Key terms in the agreement include the length of the consignment period, which is often between 60 and 90 days. The contract will also specify the commission split, which is the percentage of the sale price you will receive.
How Items are Priced and How You Get Paid
The pricing of your items is determined by the consignment store. Staff members use their expertise to assess an item’s original retail value, brand reputation, current condition, and market demand to set a competitive selling price. Some shops may allow for your input, but the final decision rests with the store.
Once an item sells, the revenue is split between you and the store based on a predetermined commission rate. This split can vary, though a 50/50 or 60/40 split in favor of the seller is common. For high-end or in-demand items, the seller might receive a higher percentage. The store’s commission covers its operational costs, including rent, staffing, and marketing.
You receive payment only after an item has been sold. The timing of these payouts differs from store to store, with many issuing payments on a monthly basis. The payment method is outlined in your agreement and can include a check, direct deposit, or store credit, which may be offered at a higher rate.
What Happens to Unsold Items
At the end of the consignment period detailed in your agreement, any items that have not sold must be addressed. You have two main options. The first is to retrieve your items from the store, which you are responsible for collecting within a specified timeframe.
The second option is to let the unsold items become the property of the store. If you choose not to pick up your goods, the store will often donate them to a local charity or sell them during a clearance event. The specific terms for handling unsold merchandise are outlined in the initial contract.
Consignment Compared to Other Secondhand Shops
The consignment model is distinct from other types of secondhand stores. Unlike thrift stores, which receive their inventory as donations, consignment shops partner with item owners to sell goods for a profit. This partnership means consignment stores have a curated selection of higher-quality items.
Consignment also differs from resale or buy-outright shops. Resale businesses pay sellers a smaller, upfront amount for their items and then assume all the risk of selling them. In a consignment arrangement, you retain ownership until the item sells and receive a larger portion of the final sale price, but you must wait for the sale to occur to get paid.