Do terms like 'payout' and 'split' have the same meaning in every shop?

The concepts are the same, but the specific rules (like the percentage split) and timing vary by store. Always refer to the individual shop's Consignment Agreement.

What's an 'outright' vs. 'consignment' purchase?

'Outright' means the shop buys the goods upfront; 'consignment' means the shop pays the seller only after the item is sold to a third party.

Glossary of Consignment and Retail Terms

Q: Is a consignment agreement required by law?

Many states require written agreements for consignment. Regardless of the law, it is essential for clarity and protection for both the shop and the consignor.

Q: What does 'turnover' mean for my business health?

Turnover measures how quickly items sell and get replaced. Higher turnover usually means more profit and fresher inventory for your customers.

New to consignment or resale? This glossary covers the must-know words, acronyms, and expressions you’ll hear every day as a shop owner.

The Essential Consignment & Retail Glossary

Account: A record in your software for each consignor (or customer), tracking inventory, sales, and payouts.
Barcode: A unique printed code used to tag and scan items for pricing and tracking in your retail or consignment software.
Buy Outright: When the store purchases items directly from a seller for cash or credit, instead of selling via consignment.
Category: Inventory grouping such as women's clothing, shoes, or home décor; crucial for organizing displays and reporting.
Commission: The shop’s percentage of each consignment sale (e.g., 40% commission: consignor keeps 60%).
Consignment: An arrangement where the store sells items for someone else and pays them a percentage after the item sells.
Consignment Agreement: A document outlining the split, term, and return/donation policies between your shop and the consignor.
Intake: The process of receiving, assessing, tagging, and recording new inventory into your system.
Markdown: A price reduction, often on unsold or seasonal items, to speed up inventory turnover.
Payout: Payment (cash, check, or credit) to consignors for items that have successfully sold.
Point-of-Sale (POS): The software and hardware system used to process sales, receipts, and track daily totals.
Split: The percentage breakdown (e.g., 60/40) between the consignor and the shop for every sale.
Turnover: The rate at which inventory is sold and replaced; a key indicator of business health.

Frequently Asked Questions

Do terms like 'payout' and 'split' mean the same thing in every shop?

The concepts are the same, but the specifics vary. 'Payout' is the act of paying the consignor, and 'split' is the percentage share. However, every shop sets its own percentages and payment schedules (e.g., monthly vs. on-demand).

Is a consignment agreement required by law?

Many states require written contracts for consignment transactions. Even if not strictly required, a written agreement protects your business from disputes regarding lost items or payment terms.

What does 'turnover' mean for my business health?

Inventory turnover tells you how quickly your items are selling. High turnover means you have fresh stock and consistent cash flow; low turnover may suggest your pricing is too high or your items aren't meeting customer demand.

What's the difference between 'outright' and 'consignment'?

'Outright' means you buy the item from the seller immediately. 'Consignment' means you take the item into stock but only pay the seller once a customer buys it.

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