What Is a Consignment Store?

This guide explores the consignment model in depth. We will cover how it works, its benefits for everyone involved, and the key differences between consignment, thrift, and resale. More importantly, we provide a comprehensive, step-by-step plan for starting your own consignment business, from your initial business plan to building a powerful online store.

Key Takeaways

• The Model: Consignment is a “win-win-win.” The store gets inventory for free, the consignor earns money on items they no longer need, and the customer gets unique, high-quality goods at a great price.
• Low-Cost Inventory: The primary financial benefit for a store owner is the low capital cost. You do not pay for your inventory until it sells, which dramatically reduces financial risk.
• Curation is Key: Unlike a thrift store, a consignment shop’s brand is built on curation. Your success depends on your ability to select high-quality, in-demand items that match your niche.
• Technology is Mandatory: Modern consignment businesses run on specialized software. You must have a system to track each item, its consignor, its price, and the payout.
• Online is Essential: A physical store is only half the business. A robust eCommerce website expands your customer base nationally and acts as a 24/7 digital showroom.
• The Digital Challenge: The biggest online challenge is managing unique inventory. Every item is a single SKU. This requires a platform that gives you total design control to make each product look professional, which is where tools like the Elementor WooCommerce Builder become critical.

What Exactly Is a Consignment Store?

At its core, consignment is an arrangement, not just a store. It is a business agreement where you, the consignee, agree to sell goods for the consignor, the owner. The consignor retains ownership of the items until they sell.

The Consignment Model Explained

The process is straightforward and follows a clear lifecycle:

1. Sourcing: A consignor brings their items (e.g., designer handbags, vintage furniture, children’s clothing) to your store.
2. Curation: You inspect the items for quality, authenticity, condition, and relevance to your store’s brand. You accept the items you believe you can sell and politely decline the rest.
3. The Agreement: You and the consignor sign a consignment agreement. This legal contract details the commission split, the pricing, and the consignment period (how long you will try to sell the item).
4. Pricing & Display: You price the item based on its condition, brand, and market demand. You then professionally photograph, tag, and display the item in your store and on your website.
5. The Sale: A customer purchases the item.
6. The Payout: After the sale, you split the revenue with the consignor according to the agreement. For example, on a $100 sale with a 60/40 split (60% to the store, 40% to the consignor), you keep $60 and pay the consignor $40.

How Consignment Stores Make Money

Your revenue comes directly from the commission split. This percentage is the most important number in your business.

• Commission Splits: The split varies by niche. A common split is 50/50 for standard apparel. For high-value luxury goods like designer bags or jewelry, the consignor often receives a higher percentage, perhaps 60% or even 70%, to attract those high-ticket items. A 60/40 split in favor of the store is also common for general goods.
• Additional Fees: Some stores charge nominal fees to consignors, such as a one-time account setup fee or a small item processing fee.
• Pricing Strategy: You make more money by being an expert pricer. Knowing the “sweet spot” that encourages a quick sale while maximizing value is a true skill. Price items too high, and they sit; price them too low, and you and your consignor miss out on revenue.

Consignment vs. Thrift vs. Resale vs. Pawn

These terms are often confused, but their business models are entirely different. The key differentiator is who owns the inventory.

Business Model	Who Owns the Inventory?	How Does the Store Get Items?
Consignment	The consignor (the original owner)	Consignors provide items and are paid after the item sells.
Thrift	The store (often a non-profit)	Items are received via donation. The store keeps 100% of the sale.
Resale / Buy-Outright	The store	The store buys items upfront from individuals for cash. They keep 100% of the sale.
Pawn	The store (temporarily)	Items are held as collateral for a loan. If the loan is not repaid, the store sells the item.

The Major Benefits of the Consignment Model

This model is popular because it creates a winning scenario for every person involved in the transaction.

Benefits for the Consignor (The Seller)

• Earn Money: They can monetize items they no longer use, turning closet clutter into cash.
• No Hassle: The store does all the work. The consignor just drops off the items. You handle the pricing, photography, marketing, and customer service.
• Expert Pricing: A good consignment store knows the market value of items, ensuring the consignor gets a fair price without doing the research themselves.
• Access to a Market: The store provides a physical and digital showroom, reaching a much larger audience than a consignor could through a private sale.

Benefits for the Consignee (The Store Owner)

• Zero-Cost Inventory: This is the single biggest advantage. You do not tie up capital in inventory. Your entire showroom is stocked for free. You only “buy” the item after you have already sold it.
• Higher Profit Margins: Because you have no upfront inventory cost, your gross margins on sold items are high.
• Curated & Unique Inventory: You have complete control over what you accept. This allows you to build a high-end, niche brand. Your inventory is constantly changing, which encourages repeat visits.
• Sustainable & In-Demand: The “re-commerce” or circular economy is booming. Consumers are actively seeking sustainable shopping options.
• Community Building: Your consignors are also your customers. You build a loyal community of people who both buy from and sell to you.

Benefits for the Shopper (The Customer)

• Amazing Value: Shoppers get high-quality, often designer, goods for a fraction of their original retail price.
• Sustainable Shopping: Customers can buy “new-to-them” items without the environmental impact of new manufacturing.
• The “Treasure Hunt”: The constantly changing inventory creates a fun, exciting discovery experience. You never know what you might find.
• Access to Sold-Out Items: Consignment is one of the only ways to find vintage, discontinued, or sold-out luxury items.

Popular Types of Consignment Stores

You can build a consignment business around almost any product category, but a few are proven winners. Success requires picking a niche you understand.

• Fashion and Apparel: This is the most popular category.
  • Luxury: High-end designer bags, shoes, and accessories (e.g., Chanel, Louis Vuitton, Gucci). Requires authentication expertise.
  • Vintage: Clothing from specific eras (e.g., 70s, 80s, Y2K).
  • Children’s: Fast-growing kids’ clothes and gear. Parents love this model.
  • Specialty: Bridal gowns, athletic wear, or maternity.
• Furniture and Home Decor: High demand but requires significant floor space. Items have a high-ticket value but a slower turnover.
• Sporting Goods: Bicycles, golf clubs, skis, and workout equipment.
• Antiques and Collectibles: Requires deep subject matter expertise for pricing and authentication.
• Niche Markets: Musical instruments, high-end electronics, books, or even craft supplies.

The Challenges and Realities of Running a Consignment Store

While the low-cost inventory is appealing, the consignment model has unique operational challenges.

Inventory Management

This is your biggest hurdle. You are not tracking 100 units of a single t-shirt. You are tracking 10,000 unique items, each tied to a different consignor, with a different price and a different consignment period.

• Tracking: You must have a system to know where every item is, who it belongs to, and when its contract expires.
• Payouts: You must meticulously track and pay your consignors. A single mistake can destroy a relationship.
• Unsold Items: You must have a strict policy for what happens to items that do not sell. Does the consignor pick them up, or do you donate them?

Building Consignor Relationships

Your consignors are your suppliers. Without them, you have no business.

• Steady Supply: You must constantly market to attract new consignors.
• Managing Expectations: You will have to reject items. You must do so politely. You will also have to justify your pricing. A clear, firm policy is your best tool.

Legal and Financials

• The Consignment Agreement: This is the most important document in your business. It must be drafted by a lawyer. It should clearly state:
  • The commission split.
  • The consignment period (e.g., 90 days).
  • The pricing and markdown policy (e.g., “Item may be discounted by 20% after 30 days”).
  • The policy for unsold items.
  • Your liability for theft, fire, or damage.
• Sales Tax: You are responsible for collecting and remitting sales tax on every sale, just like a traditional retailer.
• Insurance: You need business liability insurance to cover your store and the items you hold in trust.

How to Start a Consignment Store: A Step-by-Step Guide

This plan covers the essentials for launching your consignment business.

Step 1: Define Your Niche and Business Plan

• Choose Your Niche: What will you sell? Be specific. “Women’s designer activewear” is a niche. “Women’s clothes” is not. Your niche should be something you are passionate and knowledgeable about.
• Write Your Business Plan: This document is your roadmap. It must include:
  • Market Analysis: Who are your competitors? Who is your target customer?
  • Financial Projections: What are your startup costs (rent, software, insurance)? What is your expected revenue?
  • Consignor Agreement Draft: Define your terms from day one. What will your split be? What will your period be?

Step 2: Handle the Legal and Financials

• Register Your Business: Choose a legal structure (Sole Proprietorship, LLC) and register your business name.
• Get Permits and Licenses: You will need a seller’s permit for sales tax, a business license, and potentially a “secondhand dealer” license, depending on your city.
• Open a Business Bank Account: Keep your personal and business finances separate.
• Hire a Lawyer: Have them review your lease and, most importantly, finalize your consignment agreement.

Step 3: Find Your Location (Brick-and-Mortar)

Your location is critical. You need good foot traffic but also a place that is easy for consignors to access (ideally with parking). The interior should match your brand. A luxury consignment shop should feel like a boutique, not a cluttered thrift store.

Step 4: Source Your Initial Inventory

You need to find your first consignors before you open.

• Network: Start with friends, family, and local community groups.
• Market: Run social media ads or local flyers announcing you are “Now Accepting Consignors.”
• Offer Incentives: Consider offering a slightly better split (e.g., 50/50 instead of 40/60) for your first 50 consignors.

Step 5: Invest in the Right Technology

You cannot run a modern consignment store on paper. It is impossible. You must invest in technology from day one.

• Consignment Management Software: This is non-negotiable. This software is your central brain. It:
  • Prints tags for each item with a unique ID and barcode.
  • Tracks the item and its consignor.
  • Manages consignor accounts and payouts.
  • Handles inventory aging and markdowns.
  • (Popular examples include SimpleConsign, ConsignPro, and Ricochet).
• Point of Sale (POS) System: This is your cash register. In most cases, your consignment software is your POS system. When you scan the barcode, it automatically credits the sale to the correct consignor’s account.

Taking Your Consignment Store Online: The Digital Showroom

A physical location is great, but it limits you to local customers. An online store opens you up to the entire world. This is where your business scales.

Why an Online Store is Essential for Consignment

• Expand Your Market: Sell to anyone, anywhere, 24/7.
• Showcase High-Value Items: Your website is the perfect place to feature a $5,000 handbag that might not have a local buyer.
• Build Your Brand: Your website is a digital flagship store that communicates your brand and curation standards.

Key Challenges of Selling Consignment Online

Selling unique, pre-owned items online has challenges that traditional eCommerce stores do not face.

1. The “One of One” Problem: Every item is a unique product. You are not selling 500 of the same blue widget. You are selling one specific item. When it sells, it’s gone.
2. Photography & Descriptions: You must professionally photograph and write a detailed, honest description for every single item. This is labor-intensive.
3. Inventory Sync: How do you stop someone from buying an item online that just sold in your physical store? Your software must sync your in-store and online inventory in real-time.

Choosing Your eCommerce Platform

You have three main paths for selling online.

1. The “All-in-One” SaaS Approach (e.g., Shopify, Wix)

These platforms are popular for a reason. They provide an easy-to-use builder, hosting, and payment processing in one package. They can handle basic eCommerce well. However, you pay monthly fees and often transaction fees on top of your payment processing. Their template-based systems can also make it difficult to create a truly unique, high-end feel.

2. The Marketplace Approach (e.g., eBay, Poshmark, The RealReal)

You can list your items on established marketplaces. This gives you instant access to a massive audience. The downside is high commission fees (Poshmark takes 20%, eBay takes ~13%) and a total lack of brand control. You are just a seller on their platform. This is a good way to liquidate items, but not to build a brand.

3. The Open-Source Powerhouse: WordPress + WooCommerce

WordPress is a free, open-source platform that powers over 43% of all websites. WooCommerce is the free eCommerce plugin for WordPress. This combination gives you:

• Total Control: You have 100% control over the design, functionality, and data.
• No Sales Commissions: You do not pay any platform fees or commissions on your sales (beyond your payment processor, like Stripe or PayPal).
• Unlimited Customization: You can build any kind of experience you want.

The challenge? Historically, WordPress required technical skill or coding to make it look professional. This is no longer the case.

Building Your Website with WordPress and Elementor

This combination provides the “best of both worlds” that consignment stores need: the total power and freedom of WordPress, combined with the ease of a visual, drag-and-drop builder.

Elementor is a visual website builder platform for WordPress. It allows you to design your entire website without writing a single line of code.

Why This Combo is Ideal for Consignment

Your biggest online challenge is making your “one-of-one” items look stunning and professional. You are not just selling a product; you are selling trust and quality.

• The Elementor WooCommerce Builder: This is the game-changer. Standard WooCommerce templates are generic. The WooCommerce Builder (part of Elementor Pro) lets you visually design every single part of your shop. You can create a custom, pixel-perfect template for your product pages, your shop archive, and your checkout process. This allows you to build a site that looks as high-end as the luxury items you sell.
• Pixel-Perfect Design: You can create dynamic landing pages, showcase “new arrivals” in beautiful carousels, and build a brand that feels 100% unique.
• Integrated Ecosystem: A professional website needs more than just a builder. The Elementor platform extends to include a full solution. For example, Elementor Hosting provides a managed, secure, and high-performance foundation that is perfectly optimized for your builder. It bundles the Pro builder, premium support, and hosting into one unified package. This gives you that “SaaS-like” simplicity and a single point of contact if anything goes wrong.

Watch: How to Create a Pro WooCommerce Website https://www.youtube.com/watch?v=sK7KajMZcmA

Using Elementor AI to Accelerate Content

Remember that labor-intensive challenge of writing descriptions for hundreds of unique items? This is where technology provides a massive boost.

Elementor AI is integrated directly into the text editor. You can input a few keywords (e.g., “Vintage 1980s leather bomber jacket, good condition, minor wear on cuff”) and ask the AI to generate a compelling, professional, and SEO-friendly product description in seconds. This can cut your “time-to-live” for new products by more than half.

Marketing Your Consignment Store (Online and Off)

You have a beautiful store and great inventory. Now you need customers and more consignors.

1. Build Your Brand Identity

Your brand is your curation. Are you the go-to for minimalist, modern home goods? Or are you the expert in edgy, vintage streetwear? Every item you accept, your logo, your store’s smell, and your website’s font should reinforce this brand.

2. Local SEO and Google Business Profile

For a physical store, this is your most important marketing tool.

• Claim Your Profile: Claim your free Google Business Profile.
• Fill It Out: Add photos, your hours, your website, and your phone number.
• Get Reviews: Encourage your happy shoppers and consignors to leave Google reviews.

3. Social Media Marketing (Show, Don’t Tell)

Consignment is visual. Instagram, Pinterest, and TikTok are your best platforms.

• Daily “New Arrivals”: Post stories or reels of the best items that came in that day. This creates urgency and encourages daily follows.
• Behind the Scenes: Show your curation process. Explain why you accepted a piece or how to style it.
• Consignor Spotlights: Feature one of your top consignors (with their permission).

4. Email Marketing

Your email list is one of your most valuable assets.

• For Shoppers: Create a VIP list for shoppers. Send them a “first look” at new arrivals before they hit the floor.
• For Consignors: Use email to send payout notifications, reminders about what you are currently accepting (“Now accepting fall sweaters!”), and thank-you notes.
• Reliability is Key: Your WordPress site must send reliable emails for password resets, order confirmations, and consignor notifications. The default WordPress email function often fails or goes to spam. A dedicated solution like Site Mailer by Elementor solves this by routing all your site’s emails through a trusted service, ensuring high deliverability.

The Future of Consignment

The consignment industry is not just growing; it is exploding. This “re-commerce” trend is built on powerful consumer values.

• Sustainability as a Core Value: Modern consumers, especially Millennials and Gen Z, are deeply concerned about the environmental impact of fast fashion and disposable goods. Consignment is the ultimate sustainable shopping model.
• The Rise of “Re-commerce”: The secondhand market is projected to grow 11 times faster than traditional retail. Consumers are proud to shop pre-owned.
• The Importance of Accessibility: As your store moves online, it is your responsibility to ensure everyone can use it. Web accessibility means designing your site so that people with disabilities can navigate and shop. This is not just a good idea; it is a legal imperative in many regions. Tools like Ally by Elementor can scan your site, identify accessibility issues, and help you fix them.

Watch: Introducing Ally, the New Web Accessibility Plugin by Elementor https://www.youtube.com/watch?v=-2ig5D348vo

Expert Tips for Success

As a web development and digital marketing expert, I’ve seen countless consignment businesses struggle with the jump from a physical store to a digital one. The key is to treat your website as your second, and potentially largest, storefront. Invest in a platform that gives you total design control, like Elementor’s WooCommerce Builder, to make your unique products shine. Your online brand integrity is just as important as your in-store curation. — Itamar Haim

Here are a few more tips from seasoned consignment professionals:

• Be Picky, Be Kind: Be extremely selective about the items you accept. Your brand is your curation. But be kind and polite when you reject items. That person may have something perfect for you next season.
• Master Your Software: Your consignment software is the heart of your operation. Spend the time to learn every feature. It will save you hundreds of hours in the long run.
• Focus on Photography: For your online store, photography is everything. A $500 item can look like a $5 item with bad lighting. Invest in a good camera, a simple light kit, and a mannequin or clean flat-lay background.

Final Thoughts

A consignment store is a dynamic and rewarding business model. It taps into the growing consumer demand for sustainability, value, and unique-to-them items. While it requires meticulous organization and strong people skills, the low-cost inventory model provides a financial upside that traditional retail cannot match.

By building a strong brand through expert curation, investing in the right technology, and expanding your reach with a professional online store, you can build a highly profitable business that serves your community and supports a more sustainable future for retail.

Frequently Asked Questions (FAQs)

1. What is the most common consignment split? The most common split is 50/50. However, for high-value items ($1,000+), it is common for the consignor to receive a larger share, such as 60% or 70%, to attract that luxury inventory.

2. What happens if my item doesn’t sell? This is defined in your consignment agreement. Typically, after a set period (e.g., 90 days), the consignor must pick up their unsold items. If they fail to pick them up by a certain deadline, the items become the property of the store to be donated or liquidated.

3. Can I start a consignment store with no money? You can start with low money, but not no money. While your inventory is free, you still have startup costs: business registration, a lawyer to draft your contract, your first month’s rent and security deposit, store fixtures, and your software subscription. An online-only store has much lower startup costs.

4. What software is best for a consignment store? The best software is one that combines consignor management, inventory tracking, and a POS system. Popular options include SimpleConsign, ConsignPro, and Ricochet. Many of these also integrate with online sales channels.

5. How do I price items for consignment? Pricing is an art. A good rule of thumb is to price items at 25-40% of their original retail price. The final price depends on the brand, condition, and current demand. Check eBay’s “sold” listings to see what items are actually selling for.

6. Is consignment profitable? Yes, it can be very profitable. Because your inventory cost is zero, your gross profit margin on sales is high (it is your commission split). Your success depends on your ability to drive sales volume and manage your operating costs, like rent and payroll.

7. What items sell best on consignment? This depends on your niche, but generally, the best sellers are “in-season” and “in-style.” For fashion, designer handbags, “like-new” shoes, and quality outerwear are top performers. For furniture, mid-century modern and other timeless styles are always in demand.

8. What is the difference between consignment and a thrift store? A thrift store gets its inventory via donation. They keep 100% of the sale, which often goes to charity. A consignment store sells items on behalf of an owner and pays them a percentage after it sells. This results in higher-quality, curated inventory at a consignment store.

9. Do I need a contract to consign my items? Yes. You should never consign or accept items without a signed legal agreement. This contract protects both you and the store by clearly defining the commission, the time period, and the policies for loss, theft, or damage.

10. How do I build an online consignment store? The most scalable way is with WordPress + WooCommerce. This gives you full control and avoids high platform commissions. Because all your items are unique, you should use a design tool like the Elementor WooCommerce Builder to create a professional product template that you can reuse for every item, making them all look branded and high-quality.