What is a Consignment Store?
What is a consignment store? A consignment shop or store is a shop that sells secondhand goods on behalf of its original owners in exchange for a percentage of the sale price.
Consignment stores are different from thrift stores, which generally sell new or used goods that have been donated to the store. As such, thrift stores do not pay the original owner anything for the goods they receive. By contrast, people who bring their unwanted goods to a consignment shop get paid for them once the merchandise is later bought by a customer.
With this in mind, another good answer to the question, "What is a consignment store?" is that consignment stores are a convenient and easy way to make money from household goods and furniture you no longer want or need. This is because consignment shops remove all the hassles that come with reselling secondhand items yourself while ensuring you get the best possible price for them.
In this article, we dig deep into the concept and business model of consignment stores and reveal all the fantastic benefits that come with selling your secondhand goods on consignment.
We'll be answering all your questions, including:
- What is a consignment store, and how does it work?
- How do I start selling my goods through a consignment store?
- What are my responsibilities when I consign my goods for resale?
- When and how much money will I get for my items?
We'll even look at where the term "consignment store" comes from. In fact, that's a great place to start.
Consignment Store Meaning
We know what a store or a shop is – but what is a consignment store specifically in today's terms? Let's take a look back to see the evolution of consignment store's meaning.
The word consignment first pops up in English in the 15th century – thought to stem either from the Latin "consignare" or the French "consigner", both of which means, roughly, "to ratify or certify by a sign or seal".
However, it wasn't too much later that the modern meaning of consignment emerged – i.e., "to deliver [something] into the possession of another". This meaning is recorded in English from the 16th century.
By the 17th century, a specific commercial meaning of the term was widely understood – "to transmit [goods] to another in trust for sale or custody".
This 17th century meaning of consignment still holds true today in the 21st century – and neatly combines with store to give the compound term consignment store meaning we can easily understand.
So, what is a consignment shop bearing the modern definition of consignment in mind? Well, a consignment shop is simply a commercial shop to which people "transmit their goods for sale".
In other words, it's a shop where you can take your secondhand furniture, ornaments, and other items to be put up for sale on your behalf. Profits made from these sales are then shared between you and the consignment store.
From "consignment", we also derive the words "consignor" and "consignee". So, what do these words mean?
Well, the consignor is the person who owns the goods that are being consigned, while the consignee is the entity entrusted to look after and sell them. For example, when you bring a piece of secondhand furniture to a consignment shop for resale, the furniture is the consignment, you are the consignor, and the consignment store is the consignee.
Let's bullet point these terms so we can see all meanings clearly:
- Consignment meaning: the goods entrusted to the consignee (the consignment shop) for sale by the original owner (the consignor)
- Consignor meaning: person or business that consigns goods to the consignment shop (the consignee) for resale
- Consignee meaning: person or business that accepts consigned goods from the original owner (the consignor) and resells them
- Consignment store meaning: a commercial store that accepts secondhand goods from people (consignors) and sells them to new customers, the profits from which are split between the consignor (original owner) and the consignment store (consignee)
Consignment Stores vs Thrift Stores
Both consignment stores and thrift stores deal in secondhand goods, so it's understandable that many people confuse the two.
However, these are two distinct types of stores with different business models. So, let's shed some light on the main differences between thrift stores and consignment stores.
- What is a thrift store? A thrift store is a shop that accepts donated items, which are then sold on to customers. This means that thrift stores do not pay the original owner any money for the goods they receive. Profits made from thrift store sales usually go to a named charity or other non-profit organization.
- What is a consignment store? By contrast, a consignment store is a for-profit business that sells secondhand items on behalf of the original owner. Unlike in thrift stores, people who take their items to a consignment store get paid for them – once a customer has bought the item, the consignment store gives a percentage of the sale price to the original owner and keeps the rest as a fee.
Business Model of Consignment Stores
Individual consignment stores tend to have a list of goods they accept from consignors. Some, for example, only accept antique furniture, while others only branded clothing. Some focus on jewellery, others on musical instruments, while some bigger and more established consignment stores accept numerous categories of secondhand goods, providing customers with a fantastic range of products to choose from.
What all consignment stores have in common, however, is the underlying business model, which is very straightforward and leads to great profitability for all parties.
In essence, a consignment shop provides a fully-staffed commercial space – be it physical, online, or both – for people to sell their secondhand goods. In return, the consignment shop takes a percentage of the sale price on all goods sold. The remaining percentage is then paid to the consignor. As such, this simple model is financially beneficial for both consignors and the consignment shop itself – enabling both parties to make money on used items together. If an item doesn't sell, the owner is free to take it back at any time for no charge.
The percentage split between the consignor and the consignment shop varies from store to store. Some offer a straight down the middle 50/50 split. Others take 60% and give just 40% to consignors. Still more keep only 40% of the sale price and give the 60% lion's share to the item's original owner. A sign of a successful and trustworthy consignment shop is one that offers the largest share to consignors.
How Consignment Works – The Consigning Process Explained
Consignment is a very simple process – but let's walk through the details to see how it works.
First, the consignment store needs to conduct an initial assessment of the items you would like to sell. For smaller items, such as jewellery, china, kitchenware, or home décor, you will usually need to book an appointment to bring the items along to the consignment store so they can be assessed. This is to ensure the items are not damaged and in good condition for sale. For larger items, such as furniture, the store will usually require that you take photographs of the items and email them in along with detailed product information – dimensions, condition, age of item, original bill of sale, etc.
Once your items are approved, the consignment store will set a price for them. A good store will work with a reputed third-party accredited appraiser like the CPPAG who have the knowledge and experience to price items accurately, ensuring they sell as quickly as possible while getting you, the consignor, the best return on your goods.
With the price set, an agreement is then signed between you and the consignment store, and your items go on display for sale. This agreement will state the initial selling price, any discounts on this price the store will apply over time, and what percentage of the final selling price you will receive.
For example, when your items first go on display, they may carry an initial selling price that remains fixed for the first 60 days. After this time, if the item hasn't sold, the agreement may specify that a 10% discount is applied to the initial selling price to help shift the item. Following this initial discount, the selling price may then be further reduced by 10% every 30 days until a customer buys the item.
Importantly, as the consignor, you retain ownership of all items until they are sold. This means you can take your items back at any time without charge. This should be made explicit in the agreement.
Responsibilities of the Consignment Store (Consignee)
As the consignee, the typical responsibilities of a consignment store are as follows:
- Displaying and selling merchandise on behalf of the consignor at the agreed-upon price – in a physical store, online, or both
- Writing descriptions, taking photos, and producing other advertising and marketing materials to help find customers and sell the consigned products
- Dealing with enquiries and customers and handling transactions
- Adjusting prices to apply discounts at agreed timeframes
- Caring for the consigned items so they remain in great condition
- Paying the consignor when the item is sold
- Resolving disputes with customers about refunds, etc.
- Paying for any damages to consigned items caused while in the consignee's care
Responsibilities of the Seller (Consignor)
As a consignor, your responsibilities are really rather limited. This is because consignment stores are designed to take the hassle out of selling for consignors. As such, your responsibilities as a consignor include:
- Delivering your consignments to the store in clean and good condition for sale
- Collecting your goods again if you change your mind about selling them
That's it – the consignment store handles the rest.
How to Make Money with Consignment Stores
Consignment stores are a great way to put some extra money in your pocket in exchange for good quality household items, ornaments, and furniture you longer want, need or have space for.
Indeed, consignment stores are a much more reliable, convenient, and often lucrative alternative to selling your goods via online marketplaces or to strangers on social media. Unlike the DIY approach – which takes up considerable time marketing your goods, taking photos, writing descriptions, finding buyers, dealing with enquiries, and bartering over prices – selling through a consignment store is a completely hands-off experience for sellers.
This is because consignment stores are set up precisely to handle all aspects of the marketing and sales process for you. What's more, a good store will already have an established customer base, full of people on the lookout for used items in great condition. These people are ready to buy – and the consignment store makes it it's business to display items in their best light in both physical and online showrooms to ensure they sell as quickly as possible.
All you need to do is drop off your items and wait for the check to arrive.
However, to give your items the best chance of selling quickly at a great price, we do have a few tips for you to consider.
Scrub-up Your Items to Make Them as Presentable as Possible
Ensure that the items you bring to the consignment store are of high quality and presentable, as this will ensure they move faster. Give them a good clean and polish, as the better they look, the better the price you can typically hope for.
Tell Your Product's Story
People often go to consignment stores looking for something unique or unusual. If there's a story behind your product – maybe it came from overseas or was hand-crafted by a reputed artisan – tell the consignment store all about it. These details make for great product descriptions and will add value to your pieces, helping them sell quicker and at a better price.
Choose a Reputed Consignment Store with Great Traffic, Great Products, and Great Rates
To give yourself the very best chance of selling your products fast for the best possible returns, choose a well-established consignment store that attracts lots of customers. The truth of the matter is that many consignment shops go in and out of business quickly – so only consign with a store that has proven itself in the market and offers consignors the largest share of the profits (i.e., more than 50%).
Consignment stores are great places to sell your no-longer-needed goods and get good money for them with minimum effort. Far more convenient than selling directly to strangers online – and much better for the environment than simply throwing items away – consignment stores work hard to quickly sell your items on your behalf for the best possible return.
Your main task is to find a consignment store that offers great rates and you can trust.
At Around the Block, we give you the best consignment terms in city – a full 60% of the selling price on all items sold. We offer the best customer service in the industry, and our friendly and knowledgeable staff approach all consignments with care and professionalism.
We accept a wide range of goods, including:
- China, porcelain, and crystal tableware, figurines, silver plate, and sterling silver
- Decorative mirrors
- Furniture from various styles and periods
- Hand-knotted rugs
- Home décor
- Ladies' designer accessories (handbags, wallets, etc.)
- Lighting (chandeliers, table lamps, wall sconces)
- Marked costume jewellery (i.e., Sherman)
- Original artwork
- And much more
For more information on how to get started, contact us or visit our consignment store today.