What are Consignment Shops?

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  • Written By: Deborah Ng
  • Edited By: Niki Foster
  • Last Modified Date: 18 October 2019
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Consignment shops are often confused with thrift stores because they both sell second-hand merchandise. While they do share this characteristic, there's also a major difference between them. With thrift shops, the merchandise is donated and 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 shop and the person who brings the items in to be sold.

Since thrift shop merchandise is donated, for the most part shoppers get what they pay for, and 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, the goods sell at a higher price than those found at thrift shops. Because the owners split their profits, they want to get the highest price possible in exchange for their items, so the used merchandise can't look second-hand.

In addition to clothing in poor condition, most consignment shops won't accept used items unless they recognize the name on the label. In many cases, they are not interested in carrying generic brands or clothes originally purchased at a discount store.


Many times, the profit split is either 50/50 or 60/40 between the seller and the store, with the higher percentage going to the consignment shop. Many people actually make a decent living selling their slightly used merchandise this way. Bargain hunters often love these shops as well because they know they're getting a good deal on some decent items since the goods are all previously owned. 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 to sell on consignment. Wedding gowns, tuxedos and prom dresses can all be found at these 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, the shop will be happy to sell the goods again after they've been used a second time, provided they're still in good condition.

People looking to buy nice clothes at a discount may want to start by looking in consignment shops. The clothes are in good condition, they're usually name brand, and shoppers can get them at a discount. With the money going to the store and the original owner, it's often a situation in which everyone wins.


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Post 4

I owned one of the biggest consignment locations in the US. We sold millions of items, and when we closed, I released the software for free, as an open source GPL3 project. The program prints bar code price labels for consigned items, has a fast cashier checkout screen, provides online sales reports for consignors, and does everything else we needed to operate.

Post 3

SauteePan- There is two kids’ consignment shops near my children’s school and they have the most adorable clothes. They usually only accept name brands like Gymboree, Polo, Hilfiger, Osk-Kosh, and Carters.

I think that opening a kid’s consignment store is a great idea because parents often buy more clothes than kids can wear. Also, they grow out of clothes so fast that some outfits barely get worn.

I have beautiful imported dresses from Spain that I got my daughter that she wore a handful of times. I just am attached to her dresses, but I know they would sell well at consignment shop.

Post 2

Anon7399- I did not know there was software specifically designed for consignment shops. I do know that many consignment shops sell many high end designer clothes.

These items offer the best value because they are generally in great condition and are often popular designer brands.

The cost is a fraction of the original price because the merchandise may be off a fashion season or two.

Most people don’t follow fashion so closely to know which item was from which season, so I think that you get a high quality designer item at a reasonable price and that is what is most important.

Post 1

Software can help manage your consignment shop. I use ConsignmentTill by RJFSOFT.

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