Consignment stores work in many ways.
For those outdated items like sports, you’ve tried, and decided not your thing, to maternity clothes you know you won’t ever need again. There are consignment stores for just about anything as long as they are in good condition.
First, you need to learn how it all works. It can be a bit complicated to figure out what you will actually net, and many consignment stores are different.
Consignment stores typically work in two ways: upfront payments or share of the profit. There are pros and cons to each method and not every consignment store offers both options.
When you’re offered an upfront payment, a store employee will look at the items you want to sell, to see what would be able to be resold in the shop. Usually, there is a set price for each item, like $10 for a pair of shoes or $5 for a shirt. Once all the items have been selected for consignment, the remainder can be taken home or donated to charity. Then, the prices of all the clothes and goods are added up, and you’re offered an amount in cash or in-store credit on the spot.
The store credit amount is usually higher because it entices you to keep the money in-house. But if your bank account is low, it might be a good idea to accept the cash. Keep in mind that you don’t have to take the offer – if you feel that it’s too low, you can respectfully decline and head somewhere else.
Sharing the Profit
If your consignment store operates by profit sharing, you won’t see any money until it sells. Instead, you’re assigned an account number and all of the items that are salable are tagged with that number. The consignment store will price all your items according to what they feel is a fair price. Your items then are put on the racks or shelves to sell.
As the items are sold in the shop, you and the store split the profits at a rate agreed upon beforehand. You then collect your earnings in cash.
Pros and Cons
There are definitely pros and cons to each. When you receive an upfront payment, you get your money immediately; however, you might not receive the best price. The person buying your items offers a price significantly lower than what the items will sell for in the store – that’s how the shop makes a profit. Still, it’s instant, and probably best if you need money now.
Profit-sharing can help you get a better price, but the problem is that you can’t guarantee that all of your items will sell right away – or at all. The money will come in, it’s just slow.
Think consignment selling sounds perfect for your closets filled with old and outdated clothes and accessories? It may be, but here are some tips to help you decide.
- Find a Specialty Store. You’ll make more money if you choose a store that matches what you are selling. For instance, a sports equipment store will pay more for your used football pads than a general consignment shop.
- Know What Sells. Consignment shops specifically look for stuff that sells quickly and easily. A great pair of designer jeans sell fast. A formal dress in a shop specializing in sporting goods not so much.
- Clean Your Items. You’ll get more money for each of your items if they’re in good shape and freshly washed and ironed. Remember to donate or toss stained clothes,
- Read the Contract. If you decide to sell using the profit-sharing method, you’ll receive a contract. The contract gives you information about the percentage for sharing, how the items are priced, how long your items will sit on store shelves, and when you can arrive to collect your money.
- Don’t Always Go for Instant Money. Sometimes a consignment store will split up the way that you sell your items. If you want instant money for an old shirt you don’t care about, take the cash. But if a store owner offers you a small amount for designer shoes, ask to go a profit-sharing route and you’ll probably have a big payday if you wait.
Have you used consignment stores for selling or buying? What tips can you offer for others to have a successful experience? We would love to hear from you.