Consignment shops are often confused with thrift shops because they both sell second-hand merchandise. While this may well be the case, there's also a major difference. With thrift shops, the merchandise is donated. All the profits end up going back into to the thrift shops or are donated to charity. People who donate the merchandise receive nothing in return except good karma and sometimes a tax deduction. When goods are sold on consignment, on the other hand, the profits are split between the consignment shops and the people who bring the items in to be sold.

Since thrift shop merchandise is donated, for the most part you get what you pay for. Clothes might be stained, ripped or generally worn. Most consignment shops won't accept any merchandise unless it looks as if it's new. For this reason, goods in consignment shops sell at a higher price than goods found at thrift shops. Because the owners of consignment shops have to split their profits, they want to get the highest price possible in exchange for their goods. It's for this reason that their second-hand merchandise can't look second-hand.

In addition to clothing in poor condition, most consignment shops won't accept used goods unless they recognize the name on the label. In many cases, they can't use a generic brand. Clothes originally purchased at a discount mart are not good candidates for consignment shops.

Many times, the profit split is either 50/50 or 60/40, with the higher percentage going to the consignment shops. Many people actually make a decent living selling their slightly used merchandise in consignment shops. Bargain hunters love consignment shops as well. Because the goods are all previously owned, they know they're getting a good deal on some decent gear. Consignment shops in upscale locations have been known to carry designer wear at a fraction of its original cost.

Items that are worn only once are perfect for consignment shops. Wedding gowns, tuxedos and prom dresses can all be found at consignment stores. This is perfect for the bride on a budget or anyone one else who doesn't want to spend a fortune on formal wear. The best part is, consignment shops will be happy to sell the goods again after they've been used a second time, provided they're still in good condition.

If you're looking to buy nice clothes at a discount, you can't go wrong with consignment shops. The clothes are in good condition, they're usually name brand, and you can get them at a discount. Consignment shops are a situation in which everyone wins.