Some stores sell amazing items (like a practically new Gucci bag next to a barely worn pair of Louboutins or a vintage Rolex) at a lower price than retail. Although the items might initially seem like knockoffs, they look legitimate and high-quality upon further inspection.
So, how do these shops get their inventory? The secret is they don’t. They are consignment stores, where businesses sell products they don’t own and make money (through a fee or commission) only when an item sells.
This model is great for everything, from furniture and antiques to art, baby gear, and collectibles. Consignment is a booming industry that allows retailers to make money without spending capital on inventory and allows buyers to purchase premium items at a fraction of the price.
And here’s an interesting fact: the second-hand market is exploding. By 2027, the U.S. resale market is expected to reach $70 billion, growing almost nine times faster than traditional retail.
So, what makes consignment stores so popular? Whether selling through consignment is your new business idea or you want to add it for extra revenue, this article will explain what you need to know about this strategy.
Table of Contents
What is a consignment store?
How consignment works (step-by-step)
What’s the catch?
What do consignment stores accept to sell?
1. Designer and luxury fashion
2. Furniture and home decor
3. Jewelry and watches
4. Art and collectibles
5. Baby and kids’ gear
What does “consignment only” mean?
Advantages of selling through consignment
Pros for sellers (consignors)
Pros for store owners (consignees)
Downsides of selling through consignment
Cons for consignors
Cons for consignees
Rounding up
What is a consignment store?
A consignment store is a shop that sells goods on behalf of another person (the consignor) and takes a percentage of the sale price when the item sells. Unlike traditional retail stores, which buy inventory upfront, consignment stores act as middlemen, displaying and marketing products without owning them.
How consignment works (step-by-step)
- The consignor (seller) brings their item to a consignment store.
- The store (consignee) lists, markets, and sells the item.
- When the item sells, the store takes a cut (usually 40% to 60%) and pays the seller the rest.
- If the item doesn’t sell within a set time, the consignor can pick it up or agree to a price drop.
Think of it like this: A person has a Chanel handbag they never use. Instead of going through the hassle of selling it themself, they take it to a luxury consignment boutique. The store will then display, advertise, and sell it for them, splitting the profit according to the agreement.
What’s the catch?
- Since stores do not purchase items like thrift shops, sellers are not paid until the consignment store sells the item.
- As mentioned earlier, the whole point of a consignment store is to sell and take a commission. However, some stores may ask for up to 60% of the sale.
- Consignment stores don’t accept all items. Usually, they pick inventory based on demand and condition.
Despite the commission, sellers love consignment because it eliminates the hassle of marketing, storage, and customer management, especially if they have no experience selling items. And it’s free for store owners—no upfront cost!
What do consignment stores accept to sell?
Not all stores take every kind of item—most specialize in a niche. Here are the most popular consignment categories:
1. Designer and luxury fashion
- High-end brands like Gucci, Prada, and Louis Vuitton.
- Shoes, handbags, and accessories are in excellent condition.
- Vintage fashion and rare pieces that hold resale value.
Example: A luxury consignment shop might sell a gently used Hermès Birkin bag for US $10,000—still pricey, but way less than its US $20,000 retail price.
2. Furniture and home decor
- Vintage and antique furniture that still has value.
- High-quality home decor, from rugs to statement lighting.
- Mid-century modern pieces (always in demand!).
Example: Someone moving cross-country doesn’t want to haul their expensive oak dining table, so they drop it at a furniture consignment store instead of selling it on Craigslist.
3. Jewelry and watches
- Gold, silver, and diamond jewelry (stores often prefer authenticated options).
- Luxury watches (Rolex, Omega, Cartier).
- Estate jewelry and collectibles.
Example: A Rolex owner wants to trade up to a newer model, so they sell their watch at a consignment jeweler instead of a pawn shop (where they’d get way less money).
4. Art and collectibles
- Original paintings and sculptures.
- Rare or first-edition books.
- Sports memorabilia and vintage vinyl.
Example: An artist consigns their paintings to a local gallery, which markets and sells the pieces for a commission.
5. Baby and kids’ gear
- Strollers, car seats, and cribs (all gently used).
- Designer kids’ clothes that babies outgrow fast.
- Toys and learning materials.
Example: A parent consigns a high-end Bugaboo stroller they no longer need, saving another parent hundreds of dollars compared to buying a new one.
Note: Other popular categories include athletic equipment and gear and musical instruments.
What does “consignment only” mean?
“Consignment only” is a special selling method where sellers keep ownership of their product until the store sells it. This approach is especially common in fashion, art, and antiques. After all, it helps sellers reach more customers without running a store, while consignees get to offer various products without buying them upfront.
Advantages of selling through consignment
Pros for sellers (consignors)
- No storefront needed: With this model, anyone can sell without creating listings on marketplaces or maintaining storefronts.
- No marketing hassle: Consignment stores will handle everything related to selling the product, including creating a marketing strategy. The shop does the selling for you.
- Despite the commission cut, consignment stores often offer better prices than pawn shops or resellers.
- Better logistics: Consignees will also take care of shipping and delivery. Some may even arrange to collect the item from the seller—no need to travel to the store.
Pros for store owners (consignees)
- No upfront inventory costs: Since they won’t invest in inventory, consignment stores often have better cash flow. Even if they don’t sell the item, stores will return it to the consignors without suffering a loss.
- Build a loyal customer base: Consignment gives businesses a reputation for sourcing in-demand items, which consumers love. Thus, this model is a great way to grow a motivated audience (online or offline).
Downsides of selling through consignment
Cons for consignors
- High commissions: Although it’s better than going through pawn shops or resellers, consignors still won’t earn as much as they would if they sold directly to buyers.
- Delayed payments: Most payment terms may include sellers waiting long for their money.
- Limited customer interaction: Businesses selling through consignments may miss out on collecting helpful customer insights or sales data.
Cons for consignees
- Risk of unsteady supply: A consignment store relies on sellers to make profits. Without consignors, there will be no sales or money.
- Tricky inventory management: Store owners need somewhere to store, organize, and secure valuable inventory. Since they don’t own the items, they’ll pay the costs if they go missing or are damaged while in their care.
Rounding up
Consignment is a win-win for both sellers and store owners. It’s a smart way to sell high-value items without running a store, a low-risk business model for shop owners who want inventory without the upfront cost, and a growing industry fueled by the secondhand shopping boom.
If you have designer goods, furniture, collectibles, or art, consignment is a great way to make money without the stress of selling directly. And if you’re an entrepreneur, now might be the perfect time to open a consignment store.
