If you’re someone in the furniture industry, such as a furniture specialist considering selling furniture as a full or part time job, then you have likely considered consignment shops as an option for selling your purchased secondhand furniture.
The following guide will help you understand more about consignment retail shops, including the most notable pros and cons that you should keep in mind before choosing them.
What Are Consignment Shops?
Consignment shops are a unique type of secondhand shop. Consignment stores will allow you to submit furniture (or, depending on the niche of the shop, other items) to sell. If they agree to take on the item, they will do the hard work of selling it for you, and you will receive a certain percentage of the sale price.
For example: Let’s say a consignment shop agrees to purchase a secondhand antique table from you and sells it for $500 at a 70% consignment rate. This means that you will receive 70% of the sale price and the owner of the store will receive 30% of the sale price.
As a general rule of thumb, consignment shops are not looking for cheap, damaged or otherwise low-worth items. In order to make a profit, consignment store owners are typically looking for items that are guaranteed to make a good profit so that they can benefit from receiving their consignment percentage.
Additionally, most stores that work on consignment want your items to move quickly. Obviously, the more floor space they have, the larger their potential to make money. So, they will want to stock their stores with clean, attractive furniture.
In general, vintage, gently used items do very well at consignment-based stores. Specialty items, like very grand antiques, may take more time to sell.
In general, most mid-level shops like to stock clean, ready to use dinette and dining room sets, sofas and sectionals and accent furniture. Of course, many have high standards and require items show excellent, barely used condition.
What is the Difference between a Consignment Shop and a Thrift Store?
The primary difference between a consignment shop and a thrift store is how the stores source their items. A thrift store usually accepts items via donation. In other words, a thrift store receives merchandise for free.
On the other hand, a consignment shop pays out a percentage of the sale to each donor. Essentially, a consignment shop pays for their items in order to stock their shop. However, instead of buying inventory up front, this type of store only pays when the item sells. Therefore, these shops have taken out some of the financial risk of owning a store.
As a general rule, consignment stores tend to have nicer and better merchandise than a thrift store. Additionally, their prices tend to be higher to cover their cost of goods.
Additionally, thrift stores typically work as charity missions. Therefore, they offer tax-deductions instead of money to their donors. Typically, a percentage of their proceeds go to supporting some type of mission. The Salvation Army is a good example of a charity thrift store.
Meanwhile, most retail shops that take consignment are for-profit businesses. Indeed, many of these types of shops are family businesses or LLC’s.
Benefits of Using Consignment Stores to Sell
There are numerous benefits to using consignment retail shops to sell secondhand furniture. The following benefits are the most notable for those interested in using consignment shops as a way to make money.
The hard work is done for you.
The most significant benefit of utilizing consignment stores is having the hard work of making the sale taken care of for you. The shop will be the one to display and market the item to potential buyers. If they have a physical retail store, then they will be the ones to attract physical shoppers into the space; if they sell online, they will make and market the listing. They will handle the financial transaction, getting the item to the customer, and those other tasks which can take up a significant amount of time and money.
It can be somewhat passive income.
If you enjoy seeing the profit from selling secondhand items, you can use consignment shops as a form of somewhat passive income. All you need to do is source the items to the consignment store and let the shop take care of the rest.
If you learn how to play your cards right, you can streamline this process until it is fairly passive, particularly once you develop a keen eye for sourcing secondhand furniture that turns a tidy profit even minus consignment fees.
Disadvantages of Using Consignment Shops
Although consignment stores can be beneficial, there are some disadvantages to using consignment shops as well.
You won’t make as much as you would selling on your own.
Stores that work on consignment will take a percentage of your profits, so depending on the consignment fee, you could be missing out on a significant amount of money per sale.
Consignment stores won’t take all items.
There is also the risk of purchasing furniture secondhand with the intention of selling it to a consignment shop—only for the shop to reject the item. This means that purchases can be risky, especially if you are opting for secondhand items with a higher price.
Remember to do your due diligence on any consignment shop before you commit to working with them.
After all, if you intend to do regular business with any shop, you have to have complete trust. Make sure you understand all of the parameters. You will need to know the consignment shops fees, hours and policies on sales.
Additionally, you should also ask about damage or theft within the store.
Finally, there is always a risk that the items you choose to consign do not sell. In some cases, consignment stores work on a time-limited basis. If, after a certain period of time your merchandise does not sell, you may have to pick up the items.
Of course, in that case, you may have to incur fees and time to move your items.
Some consignment shops may claim your items after an additional period. So, you could risk in losing your merchandise.
Working with a Business to Sell your Furniture
If you have clean, name brand furniture, chances are you will do well in a consignment shop. Brands like Ethan Allen, Henredon and Drexel Heritage tend to sell well at Consignment shops.
However, you should know all of your options and limitations when it comes down to doing repeat business with any shop. A consignment retail shop may not give you top dollar for your vintage furniture. However, they do typically offer a great service if you have little interest or ability in selling the furniture.
So, consider your local consignment shop today.