What Is A Fair Consignment Percentage?

Consignment or consignor percentage is the ratio of the share of sales disbursed to consignors to sales proceeds. The word 'percent' means 'portion per one hundred'. If the consignor receives $60 of a $100 sale, the consignment percentage is $60/$100 = .6 or 60%.

A consignee may have a general publicly-stated minimum percentage for all consignors and might pay out more (to friends, relatives, etc), or increase the split for high-end items, collectibles and the like.

The rate is commonly agreed to upon consignment of inventory and is often stated in written consignment agreements (signed by consignors and consignees).

Scroll down to see common percentages for various types of merchandise.

What Determines A Fair Consignment Percentage?

A 'fair' commission (paid to the store) is subjective and may depend upon:

The bottom line is how much consignors are receiving for their sold merchandise. If they aren't satisfied with the amounts, they'll stop participating, or worse, spread the word about their discontent.

Typical Consignment Rates

Calculate A Fair Consignment Percentage

The 'percentage' is calculated by dividing the payout by the amount of the sale. On a $100 sale with a 40% consignor share, the payout should be $40, so 40/100 = .4 or 40%. When the share is less than expected, just inquire as to why. The division may be less because other fees may have been applicable. Fees cannot be assessed if they were not disclosed prior to placing items on consignment and should be spelled out in a consignment agreement with signatures of both parties. Continuing with the benefit of doubt, sometimes mistakes are made and simply addressing them may resolve them.

A software vendor in Miami, FL actually rigged his software to hide the actual sale price so consignment shops could literally lie about the sale price and pay consignors less. He publicly encourages users of his software to employ the tactic to 'increase store profits'. (The software name is similar to 'Consignpo'.) This can be detected by having someone purchase something that you have on consignment. See if the sales price matches the shop's representation of the selling price.

Consignment Percentage and Store Profit Margin

Store 'profit' is far from the share of sales proceeds that shops take in. Typically from the store's take expenses are deducted like rent, help, utilities, advertising, insurance, supplies and fees.

It is becoming increasingly more accepted if not expected to have credit-card charges either deducted from sales proceeds prior to splitting the remainder, or passing fees on to consignors (only for credit-card transactions).

Consignment Percentage For Retail

Consignment and 'retail' are generally mutually exclusive. 'Consignment' refers to adding others' items to inventory for resale with payment made when items sell. Retail refers to purchasing products from suppliers, wholesalers, designers and manufacturers for resale where payment is made when inventory is delivered, which is not to say that retailers won't also place inventory at outlets on consignment.

Average Consignment Percentage Rates For Clothing

The average rate based upon the 20 years of observation across thousands of consignment store selling all type of clothing ranges from 20% on high-end clothing to 80% for run-of-the-mill used children's clothing of which there is plenty. There isn't an 'average percentage' that can be applied across the board for any and all clothing consignment shops. Consignors with high-end designer bags, shoe and threads expect more and should get more because for the store, a lower percentage of a high-priced item begets more than 70% of a baby bib. To know an average for the type of inventory in your shop, send some emails to other similar shops. Make some phone calls. In your area, learn what the competition is offering and better by enough to attract business.

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