Online Tool Store
· 4 min read
How to Work Out a Consignment Payout
Heshan Fernando
Co-founder & COO
The shop offers 60% to the consignor, which sounds generous compared with the 50% down the road.
Then the item sells in week nine at a 40% markdown, and 60% of the marked-down price is less than 50% of the original would have been.
The markdown schedule matters more than the split
Most consignment contracts include automatic markdowns — typically a reduction after 30 days, a larger one after 60, and either a final clearance or a return after 90.
A large share of consignment stock sells after at least one markdown. Which means the headline split is applied to a price lower than the one on the tag, and comparing two shops on split alone compares the wrong number.
| Shop | Split | Markdown | On a 180 item |
|---|---|---|---|
| A | 60% | 40% after 60 days | Sold at day 65: 65 |
| B | 50% | 20% after 60 days | Sold at day 65: 72 |
The shop offering less pays more, because its markdown is gentler. That comparison is invisible if you only ask about the percentage.
What else comes off
Entry or listing fees, charged per item whether or not it sells.
Cleaning or preparation charges, common for clothing and furniture.
Card processing, which some contracts pass through to the consignor.
Storage fees on items that do not sell within a period.
And the one that matters most: whether the split applies before or after these. A 60% split on the gross and a 60% split on the net after fees are different numbers, and the contract will say which without drawing attention to it.
Unsold items have a cost too
The contract will say what happens after the consignment period. Three common outcomes:
Returned to you, sometimes requiring collection within a window before they are disposed of.
Donated, automatically, if not collected.
Moved to clearance at a much lower price with the same split.
None of these are unreasonable and all of them are worth knowing before signing. An item worth keeping that gets donated because nobody read the collection window is a real and avoidable loss.
Consignment against selling it yourself
The honest comparison includes your time.
Consignment pays less per item and costs you a drop-off. The shop handles photography, listing, questions, payment and returns.
Selling directly keeps considerably more per item and costs photography, writing a description, answering messages, packing, posting, and dealing with anyone who changes their mind.
For a low-value item, direct selling frequently costs more in time than the extra money is worth. For a high-value item where the difference is substantial, it is usually worth doing yourself.
The other factor is reach. A consignment shop with the right customers for an unusual item may achieve a price you could not, which changes the arithmetic entirely.
Price it for the shop’s customers
The asking price is frequently set by the consignor and it should reflect the shop’s market rather than the original purchase price.
A shop’s regulars have an expectation of what things cost there. An item priced well above that sits, gets marked down, and eventually sells for less than a realistic initial price would have achieved — while occupying rail space for three months.
Shops usually have a view on this and it is worth asking for it. They see what sells and at what price, which is information the consignor does not have.
The common error is anchoring to what an item cost new. That figure is irrelevant to a second-hand buyer and it produces the slow markdown spiral that ends in a low payout.
Common mistakes to avoid
- Comparing shops on split percentage alone.
- Not reading the markdown schedule before signing.
- Missing whether fees come off before or after the split.
- Ignoring the collection window for unsold items.
- Valuing your own time at zero when comparing against direct selling.
How to do it with Consignment Payout Calculator
The Consignment Payout Calculator models the realistic outcome.
- Enter the asking price, the split and every fee.
- Model the marked-down scenario as well as the full-price one.
- Compare shops on the marked-down figure, which is what a lot of stock actually achieves.
- Compare the result against selling directly, including your own time.
Other pricing tools are in the tools directory.
Frequently asked questions
What split is typical?
It varies widely by category and location, commonly between 40% and 60% to the consignor. The markdown schedule usually matters more than a few points on the split.
Do fees come off before or after the split?
It depends on the contract, and the difference is real money. Read which figure the percentage applies to — the gross sale price or the net after fees.
Is consignment better than selling directly?
It trades money for time. Direct selling keeps more per item and costs photography, messaging and postage. Consignment is worth it when the shop reaches buyers you cannot.
Final thought
Ask about the markdown schedule before the split. It is the number that decides what you are actually paid, and it is the one nobody advertises.