What consignment is and why resellers use it
Consignment means you sell items for someone else and take a cut when it sells. You don’t buy the item. The owner keeps ownership until the buyer pays and the return window is clear. You handle intake, photos, listing, shipping, and customer messages. You take a commission. The owner gets the rest.
Why do it? Zero cash tied up. You can take on pricier pieces without betting your rent money. Think designer bags, camera gear, mid-century chairs, or a pile of band tees from the 90s. It also brings in inventory you’d never find on your own.
The tradeoff: admin work. More tracking. Slower payouts. And sometimes owners want “what they paid” for an item, which is not how reality works. As a rule of thumb, buy outright for fast, cheap flips (that old lamp you grabbed for $3). Use consignment for higher-value goods, bulk estates, or items where condition risk is high and you don’t want to eat a loss.
How the money actually flows
Most consignment deals use a split. Common ranges are 50/50 to 70/30 depending on sale price and category. You can also add fees for cleaning, authentication, or bulky storage.
Here’s a sample breakdown. Say a jacket sells for $200. Marketplace fees and payment processing come out first. Shipping label cost is next (if you’re covering it). Let’s say fees total $26 and the label was $12. Net is $162. On a 60/40 split (you/owner), you keep $97.20 and pay the consignor $64.80. If you charged a $10 cleaning fee, that usually comes out before the split—if your contract says so.
Payout timing matters. Pay after the platform’s return window closes and the buyer hasn’t opened a claim. Many shops pay consignors twice a month or monthly. Keep a minimum payout threshold so you’re not sending $4 payouts and chasing taxes on crumbs.
Checklist: running a clean consignment from intake to payout
Qualify the consignor. Ask for photos upfront and decline low-value or restricted items.
Quote your split by price tier and category. Add any fees (cleaning, authentication, storage) in writing.
Sign a simple agreement. Include term length, markdown schedule, returns policy, and payout timing.
Assign a consignor ID. Tag every item with SKU + consignor code before it touches a shelf.
Intake items with photos and condition notes. Record flaws, measurements, and any serial numbers.
Price it and set a markdown plan. Example: list at $250, auto drop to $225 in 30 days, $200 in 60 days.
List to your chosen channels. Keep titles clean, disclose flaws, and match your photos to condition notes.
Handle offers with rules. For example: auto-accept 15% off after 30 days, otherwise ask the owner only if below the floor.
Ship, confirm delivery, and wait out claims/returns. Document everything.
Pay out with a statement showing sale price, fees, split, and any charges. Archive the signed receipt.
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How a pro runs this with ResaleOS:
Create a consignor profile and set split tiers once.
Scan intake; items auto-tag with consignor ID and SKU.
Drop photos; AI drafts titles, descriptions, and categories fast.
Track sales by consignor and generate payout statements in a click.
Print labels and keep return windows tied to each sale.
Key terms to put in your consignment agreement
Term length and end game. Set how long you’ll try to sell (e.g., 90 days). Say what happens after: markdowns, donation, or return to owner (who pays return shipping).
Pricing authority. You set list price and offer rules. Put a floor if they insist. Add an automatic markdown schedule so you’re not chasing approvals.
Fees and deductions. Spell out what you can deduct before the split: cleaning, authentication, storage, platform underpaid postage adjustments, chargebacks, and return shipping.
Returns and claims. Payouts happen only after the return window passes. If a refund hits after payout, state how you’ll claw back funds (credit against the next payout or invoice).
Liability and insurance. Who’s responsible if something is lost or damaged while in your care or in transit to the buyer? If you carry insurance, note limits. Require the owner to warrant items aren’t counterfeit or stolen.
Payment schedule and thresholds. Example: payouts on the 1st and 15th for delivered, cleared orders; $50 minimum payout.
Photography rights. You own your photos and can reuse the content in future listings and marketing.
Non-obvious mistakes that hurt your margins
Paying before the return window closes. One INR or SNAD and you’re eating the whole refund.
Letting owners set fantasy prices. Without a markdown plan, the item sits and you do free storage.
No consignor ID on SKUs. Mixing owned and consigned inventory ruins bookkeeping and taxes.
Unclear shipping-claim rules. If the carrier loses it, who takes the hit? Put it in writing.
Taking low-value, high-touch items. A $20 tee with five messages and two returns is a net loss on consignment.
Forgetting proof of ownership on luxury. No ID and no receipts is how stolen goods land in your lap.
No expiration date. If the contract never ends, you’re running a storage unit, not a store.
Consignment is great when you want bigger inventory and less cash risk, as long as your terms and tracking are tight. If you’re ready to run it like a business—clean intake, clear splits, fast listings, and painless payouts—build your workflow once in ResaleOS and stop fighting spreadsheets so you can focus on sourcing the next great haul.
