How Does Consignment Work? A Beginner-Friendly Guide

I’ll never forget the first time I walked into a consignment shop with a bag of barely-used clothes, hoping to make a few bucks. I had no idea how it worked or what to expect. Would they buy everything on the spot? Would I get paid immediately? Spoiler alert: it’s not quite like a regular resale. But once I understood the process, I realized consignment is actually a smart, low-risk way to sell stuff you no longer need.

So, if you’ve ever wondered, how does consignment work? — I’ve got you covered. I’ll walk you through everything I’ve learned, the good and the not-so-good, and how you can make the most out of your consignment experience.

What Is Consignment?

Consignment is a type of resale agreement where you (the consignor) provide items to a shop or platform (the consignee) to sell on your behalf. You don’t get paid upfront. Instead, the shop sells your item, takes a percentage as commission, and gives you the rest once the item sells.

It’s different from a traditional thrift store or pawn shop where they buy items outright. With consignment, you keep ownership until the item sells.

Think of it as renting shelf space — the shop displays your item, markets it to their customers, and takes care of the transaction. If it sells, great. If it doesn’t, the item is either returned to you or donated, depending on the agreement.

Popular Products in the Consignment World

When people think of consignment, they often picture racks of secondhand clothes — and while that’s definitely a big part of it, the world of consignment is way more diverse (and profitable!) than many realize. After trying my hand at a few categories and browsing through some successful shops, I’ve seen that certain products consistently stand out in the consignment space.

Here are some of the most in-demand and high-performing consignment products you’ll find both in local boutiques and online platforms:

1. Designer and Name-Brand Apparel

Luxury fashion items are some of the hottest sellers on consignment. Think brands like Gucci, Prada, Lululemon, or even Anthropologie. These pieces hold their value and appeal to shoppers who want quality without the full retail price.

From personal experience, my old Michael Kors coat sold faster on consignment than anything I listed myself. People trust the curated selection and are willing to spend more for authenticated, well-maintained pieces.

2. Shoes and Handbags

High-quality footwear and handbags — especially those from designer labels — are always in demand. Leather boots, barely-worn sneakers, vintage Coach bags, and structured totes sell incredibly well in the secondhand market.

Bonus tip: original boxes, dust bags, or receipts can increase value and buyer trust.

3. Jewelry and Accessories

Accessories are small but mighty in the consignment world. Fine jewelry, vintage brooches, belts, scarves, and even designer sunglasses move quickly, especially when photographed well and displayed properly.

Shoppers often see these as affordable luxury add-ons to complete a look.

4. Home Decor and Furniture

Yes — you can consign more than just what’s in your closet! Furniture, mirrors, artwork, and decor pieces (especially mid-century modern or boho styles) are rising stars in consignment shops.

Local stores usually handle these larger items, but some online platforms now offer shipping for home goods too.

5. Kids' Clothing and Baby Gear

Children grow so fast, and many parents turn to consignment for affordable, high-quality items. Gently used baby clothes, strollers, books, toys, and gear like high chairs or baby carriers are always welcome at kids' consignment stores.

In fact, I once traded in a barely-used stroller for store credit and left with a full bag of clothes for my toddler. Total win.

6. Sports and Outdoor Gear

From snowboards to yoga mats to gently worn hiking boots — seasonal and specialty gear performs well on consignment. People love scoring deals on expensive gear, especially when trying out a new hobby.

Just make sure the items are clean, functional, and safe.

7. Electronics and Tech Accessories

Some higher-end consignment shops (especially online) also accept gadgets — think tablets, smartwatches, and headphones. These items need to be current models in good condition and factory reset before submission.

It’s not as common as clothing or furniture, but for the right shop and right audience, tech can be a valuable category.

8. Wedding Dresses and Formalwear

These are often worn once and then stored for years — which is why bridal consignment shops exist! Designer gowns, bridesmaid dresses, tuxedos, and prom dresses are frequently sought after at a fraction of retail prices.

How Does Consignment Work? Step-by-Step Breakdown

Step 1 – Choosing Items to Sell

Start by going through your stuff — gently worn clothes, furniture, art, accessories, even designer shoes. Ask yourself: Would someone else pay for this? Items should be in excellent condition, clean, and preferably current in style or brand.

I’ve had the most success with seasonal clothes (like winter coats in fall) and high-end pieces. Fast fashion items didn’t sell well — and some stores won’t even take them.

Step 2 – Finding a Consignment Shop

Next, you’ll want to find a local consignment shop or an online consignment platform. Local boutiques often specialize in certain items — women’s fashion, vintage decor, kids’ clothes — so match your items to the right shop.

A tip: read their reviews, check their Instagram, and pop in beforehand. You'll get a feel for their vibe and customer base. If your clothes scream "boho" but the store is more "preppy chic," your pieces might just sit there gathering dust.

Step 3 – Signing a Consignment Agreement

This part is crucial. The consignment agreement is a simple contract that outlines:

• The items you’re leaving
  
• The price range or markdown schedule
  
• The commission percentage
  
• How long the shop will keep your items
  
• What happens if something doesn’t sell
  

In my local shop, they keep items for 60 days and take 40% commission. If it doesn’t sell by then, I can pick it up or let them donate it. Make sure to ask these questions upfront — no one wants surprises.

Step 4 – Pricing and Display

The shop typically sets the price — although some let you suggest one. Don’t take it personally if they price your $100 jeans at $30. They know what sells and at what price. Remember, they’re trying to move inventory.

Also, be aware of markdown policies. Some stores automatically reduce the price after 30 days to move inventory faster. If you're not okay with that, ask for a no-markdown agreement or set a minimum price.

Step 5 – Payment and Unsold Items

Once your item sells, the shop will issue payment — often monthly or biweekly. Payment may come via direct deposit, store credit, or check. I once got paid in cash, but that’s rare now.

If the item doesn’t sell? You either pick it up (if you want it back) or the store donates it. Just be clear on what happens after the consignment period ends — every shop handles this differently.

Pros and Cons of Selling on Consignment

Like anything, consignment has its ups and downs. Here’s what I’ve personally experienced:

Pros

• Low effort: You don’t have to market or deal with buyers.
• Better payout than donations: You make money on items that might otherwise sit unused.
• Eco-friendly: Keeps quality items out of landfills and gives them new life.
  
  

Cons

• Takes time to sell: Not everything moves quickly. I had a coat sit for two months before it finally sold.
• Commission cuts into your profit: Shops often take 40–60%.
• No guarantees: If your item doesn’t sell, you earn nothing.
  
  

Still, for me, the tradeoff has been worth it — especially for higher-ticket items.

How Do Consignment Shops Make Money?

The business model is simple: they keep a commission from each sale. Common splits are 60/40 or 50/50, with the shop taking the higher percentage. They make money by curating inventory, styling displays, attracting customers, and managing transactions.

Some shops also charge:

• A processing fee
  
• A listing fee (for online platforms)
  
• Or keep a larger cut for store credit vs. cash payouts
  
  

Make sure you know the commission structure before you consign — it’s your money, after all.

Also Read: Digital Dropshipping — The Smart Way to Sell Online Without Inventory

What Should Be Included in a Consignment Agreement?

Here’s what a clear agreement should cover:

• A detailed item list
• Condition of items accepted (no rips, stains, missing parts)
• Commission percentage
• Pricing terms (who sets the price, markdown policies)
• Consignment period (usually 30–90 days)
• Payout terms (when and how you get paid)
• Return/donation policy for unsold items
  
  

Real-World Consignment Success Stories

It’s one thing to read about how consignment can work — but it really hits differently when you hear about people who’ve actually done it. When I started exploring consignment as a side hustle, I found a ton of inspiration in the stories of real entrepreneurs who turned secondhand selling into a seriously profitable business.

Here are a few of my favorite real-world consignment success stories that prove this model isn’t just practical — it can be powerful too.

1. LePrix: Curated Luxury That Scaled Big

LePrix started with a mission to make luxury fashion more accessible and sustainable. What began as a local designer consignment shop evolved into a massive online marketplace for pre-owned luxury fashion, connecting high-end boutiques with global buyers.

They didn’t hold inventory themselves. Instead, they partnered with a network of brick-and-mortar consignment stores, acting as a digital layer that helped these shops expand online. That model of selling on consignment without owning stock gave LePrix the flexibility to grow without the usual overhead headaches.

The takeaway? You don’t need to own all the goods to build a serious business around them.

2. Common Sort: A Local Favorite in Toronto

Common Sort is one of those cool, community-focused consignment stores that customers rave about. Based in Toronto, they built their reputation by offering a stylish, sustainable alternative to fast fashion, with everything from trendy streetwear to vintage denim.

Their model focuses on consignment plus trade — you can get paid in cash or store credit, which keeps customers coming back. They've grown to three physical locations, and their success proves that when you combine smart buying, curated inventory, and a strong brand vibe, consignment can thrive even in a competitive retail space.

What stood out to me most was their emphasis on inclusivity and affordability. They built something with heart — and customers responded.

3. The RealReal: Luxury Resale, Reimagined

You’ve probably heard of The RealReal, and for good reason. They’ve redefined how consignment works in the luxury space. Starting as a one-woman operation out of her home, founder Julie Wainwright turned The RealReal into a publicly traded company.

They focus on authenticated luxury — think Chanel bags, Rolex watches, and designer clothing. What makes their model work so well is the trust factor. Customers know they're getting the real deal, and sellers know their items are in good hands.

They handle everything: pickup, photography, pricing, and shipping. It’s a full-service consignment experience — and it works at scale. Their success shows that transparency, tech, and trust can take an age-old concept and make it thrive in the digital age.

4. Beacon’s Closet: Sustainable Fashion Pioneer

If you’re ever in Brooklyn, Beacon’s Closet is a must-visit. It’s an iconic resale store that started way back in 1997 and has grown into a staple of NYC fashion culture. Their consignment model is simple: they accept on-trend, seasonal clothing and offer cash or credit on the spot.

What’s brilliant is their hybrid of consignment and buy-sell-trade, which keeps things moving quickly while staying curated. They’ve managed to stay relevant for over two decades by keeping one foot in sustainability and the other in what’s stylish right now.

5. eBay Consignment

eBay consignment is exactly what it sounds like: you provide your item to someone else — often a professional eBay seller — and they sell it on your behalf. Once the item sells, they take a commission and send you the rest of the earnings.

This service is typically used for higher-value items like:

• Designer handbags and clothing
  
• Electronics
  
• Collectibles (vintage toys, sports cards, coins)
  
• Watches, fine jewelry, and limited-edition items
  
  

You might find individual sellers or eBay consignment shops (sometimes called Trading Assistants) that specialize in certain product categories and already have a trusted buyer base.

Who Should Consider Consignment?

Honestly, consignment isn’t just for trendy minimalists or fashion bloggers cleaning out their closets — it’s a practical option for a lot of people in different stages of life. If you’ve got quality items you no longer need but don’t want the hassle of listing them, meeting buyers, or haggling on price, consignment might be your perfect middle ground.

Here are a few types of people who can truly benefit from selling on consignment:

1. Busy Professionals with Little Time to Sell

Let’s face it — between work, family, and trying to squeeze in a social life, listing and selling items online can be time-consuming. If you’ve got designer clothes, shoes, or accessories gathering dust in your closet, a consignment shop can do all the work for you. They price, display, promote, and sell — and you just wait for the payout.

2. Declutterers and Downsizers

If you’re in the middle of a Marie Kondo-style clear-out or downsizing to a smaller space, consignment gives your items a second life and puts money back in your pocket. It’s a smart way to part with furniture, fashion, or home decor without feeling wasteful.

3. Parents of Growing Kids

Anyone with kids knows how fast they grow out of clothes, toys, and gear. Instead of letting those things pile up in storage, consigning gently-used baby and children’s items is a great way to earn back some of that investment — and help another family save in the process.

4. Fashion Lovers and Label Collectors

If you love shopping high-end or trendy pieces but often move on quickly to the next thing (no judgment — same!), consignment lets you refresh your wardrobe while recouping some of the cost. Many shops also offer store credit, so you can sell your old style to fund your new one.

5. Eco-Conscious Shoppers and Sellers

Reselling is one of the most sustainable things you can do in fashion and retail. If you care about reducing waste, extending product life cycles, and supporting the circular economy, consignment is a more planet-friendly way to shop and sell.

6. Entrepreneurs and Side Hustlers

Some people actually build businesses around consignment — either by flipping items from thrift stores or running full-on consignment boutiques. If you’re entrepreneurial and have an eye for resale value, consignment can be more than a one-time purge — it can be a profitable side hustle or career path.

Consignment vs. Selling Outright: What’s the Difference?

I remember standing in a secondhand store, holding a jacket I hadn’t worn in years, trying to decide: Should I sell it outright or leave it on consignment? Both sounded fine at the time — I just wanted it gone — but the difference between the two approaches is actually pretty significant once you understand how each one works.

Let me walk you through it.

Selling Outright: Instant but Less

When you sell an item outright, you hand it over to a store or reseller and walk away with cash (or sometimes store credit) immediately. It's quick, no strings attached.

• You get paid on the spot
  
• The shop now owns the item
  
• You have no control over resale price
  
• You usually earn less than you would on consignment
  
  

This model works well when you want fast cash or when you’re dealing with items of uncertain resale value. I’ve sold books and small appliances this way just to clear space — it wasn’t a windfall, but it was easy.

Consignment: Delayed but Potentially More Profitable

With consignment, you retain ownership of the item until it sells. The shop acts as your agent, displaying and promoting the product. If and when it sells, you get a percentage of the final sale price, and the shop takes a commission for their role.

• You get paid only if the item sells
  
• You keep partial control (especially in pricing discussions)
  
• You often earn more, especially on high-value or in-demand items
  
• You might have to wait weeks or months for the sale

FAQs About How Consignment Works

How long do items stay in a consignment store?

Typically 30 to 90 days, depending on the shop's policy. After that, items may be marked down, returned, or donated.

Do I need an appointment to consign items?

Some shops require appointments, others take walk-ins. It’s best to call ahead or check their website before showing up.

What happens to my item if it doesn’t sell?

Most shops will either return it to you or donate it. Your agreement should clearly outline what happens post-consignment period.

How much do consignment shops typically take?

Most take between 40%–60% of the sale price. High-end or specialty stores may take more due to marketing and overhead.

Can I negotiate the selling price of my item?

Sometimes. Some shops allow pricing input, especially for high-ticket items. But most prefer to set prices based on market trends and customer behavior.

Final Thoughts: Is Consignment Right for You?

So, how does consignment work? In short: it’s a partnership. You bring the items, the shop brings the audience, and together you split the profit.

It’s not a get-rich-quick scheme, but it is a smart, low-effort way to give your things a second life and earn extra cash while you're at it.

I’ve used consignment to offload designer jeans, handmade pottery, and even vintage lamps. Some sold fast. Some didn’t. But the process has always felt easy, fair, and surprisingly satisfying.

If you’ve got something great sitting in your closet, why not give it a shot?