Consignment shops typically take around 40% of the selling price of an item, with the remaining 60% going to the product owner or maker.
Understanding Consignment Shop Percentages
When you consign items to a shop, you're entering into an agreement where the shop sells your goods on your behalf and takes a percentage of the sale price as their commission. While the exact rates can vary significantly depending on the shop, the type of product, and the market, an industry average indicates that the split often favors the product owner.
On average, the industry standard suggests a division where:
- The product owner/maker (consignor) receives approximately 60% of the sale price.
- The shop owner receives approximately 40% of the sale price.
This average provides a general benchmark, but it's crucial to understand that consignment agreements are not one-size-fits-all.
Typical Consignment Split Example
To illustrate the common division of earnings in a consignment arrangement, consider the following breakdown:
| Party | Typical Percentage of Sale Price | Role |
|---|---|---|
| Product Owner | 60% | Provides the items to be sold |
| Consignment Shop | 40% | Sells the items, handles marketing, etc. |
Factors Influencing Consignment Rates
Several factors can cause consignment percentages to deviate from the average:
- Type of Item: High-value or luxury goods might command a different split compared to general merchandise. Unique, rare, or highly sought-after items might give the consignor more leverage.
- Shop's Overhead: Shops with higher operating costs (prime location, extensive marketing, specialized staff) might seek a larger percentage.
- Item Demand & Uniqueness: Items in high demand or those that are unique may allow the consignor to negotiate a better percentage.
- Consignment Agreement Terms: Each shop has its own standard contract, which outlines the percentage, payout schedule, duration of consignment, and terms for unsold items.
- Relationship with the Shop: Long-term consignors with a history of providing quality, sellable items might be able to negotiate more favorable terms over time.
Negotiating Consignment Terms
It's possible for consignors to negotiate more favorable terms than the standard average. Here are some tips:
- Research: Understand the typical rates for similar items in other local consignment shops.
- Quality of Items: Present high-quality, desirable items that are likely to sell quickly. Shops are more willing to offer better terms for goods that require less effort to sell and generate faster revenue.
- Volume: If you plan to consign a large volume of items, you might have more leverage to negotiate a slightly better percentage.
- Exclusivity: If you're offering exclusive access to unique items or a significant portion of your inventory, this can be a strong negotiation point.
- Be Prepared to Discuss: Don't hesitate to discuss the commission rates with the shop owner. A clear, professional conversation can often lead to a mutually beneficial agreement.
Understanding these dynamics can help both consignors and shop owners establish fair and sustainable partnerships.
