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.