How Consignment Works: A Guide for First-Time Consignors

This guide is for people thinking about consigning items for the first time, whether clothing, furniture, home decor or collectibles. You will learn how consignment differs from selling outright, what happens at each step, and the questions to ask before you hand over your items.

What consignment means

In consignment, you keep ownership of your item while a shop displays and sells it for you. When the item sells, the shop keeps a share of the sale price and pays you the rest. If the item does not sell, you usually get it back or it is handled according to your agreement. You are paid only after the sale, not when you drop the item off.

Consignment vs. selling outright

• Consignment: you often receive a larger share of the final price, but you wait for a sale and may not sell at all.
• Selling outright: some shops, called resale or buy-outright stores, pay you on the spot. The amount is typically lower because the shop takes the risk.

Some shops offer both options, and some offer store credit as another choice.

Step 1: Find the right shop

Shops specialize. Some take only clothing, some focus on children's items, furniture, designer goods or antiques. Choose a shop whose customers want what you have. Visit first and look at the merchandise, prices and how items are displayed. To find shops in your area, look through a directory of auction, estate sale and antique businesses.

Step 2: Learn the intake process

Many shops require an appointment, while some take drop-offs during set hours. Ask what they are accepting right now, since many shops accept items by season or by current need. Bring items clean and in good condition, as shops usually decline anything stained, damaged or outdated for their market.

Step 3: Review and sign the agreement

You will sign a consignment agreement that sets the terms. It typically covers:

• The commission split between you and the shop. Splits vary by shop, item type and sometimes item price.
• The consignment period, or how long the shop will display the item.
• The markdown schedule, if prices drop over time.
• What happens to unsold items at the end of the period.
• How and when you are paid.

Read it closely before signing and keep a copy.

Step 4: Pricing

Most shops set prices based on their experience with what sells in their store. Some invite your input, especially on higher-value items. If you have receipts, original tags or proof of authenticity for designer or valuable pieces, bring them. Remember that resale prices are usually well below what you paid new.

Step 5: Track your items

Ask how you can check sales. Many shops offer an online account or will tell you by phone or in person. Keep your own list of what you consigned, with the item numbers the shop assigns, so you can compare it with the shop's records.

Step 6: Getting paid

Shops pay in different ways, such as by check on a set schedule, by request at the counter, or as store credit. Some require a minimum balance before a payout. Ask what happens if you do not collect your balance for a long time, since some agreements address unclaimed funds.

Step 7: Unsold items

At the end of the consignment period, you may need to pick up unsold items by a deadline. If you do not, many agreements allow the shop to donate the items or take ownership of them. Mark the pickup date on your calendar.

Quick checklist

• Choose a shop that sells items like yours.
• Ask about appointments and what is being accepted now.
• Bring clean items in good condition with any paperwork.
• Read the agreement for the split, period, markdowns and payout terms.
• Keep your own list of consigned items.
• Note the date to pick up unsold items.