Auntie Kate The Resale Expert

I received this email from a concerned supplier this week:

What do you think of a consignment shop that was giving you 50% of the sale price and then all of a sudden, you go there and now they are only buying outright and giving you only 25 to 40% of the estimated sale price. Just wondering. I was consigning there but decided not to anymore. Would like to hear what you think of this.

How would you answer this consumer? Here’s what I said as representative of the 160+ Sponsor Shops of HowToConsign.com. See what you think.

I’d say that’s a great deal… if you understand it!

When you say you were getting 50% of the sale price… you were getting that only if the item sold.
And you were getting 50% of what the item sold for, which might be less than first established.
So you were sharing the risk of the item never selling (you get zero, of course) or of the item selling at a reduced price.

With buying outright, the shop assumes all the risk of the item not ever selling, or of having to reduce the price and their getting less than they evaluated your item at.

For example, let’s say you want to get rid of a coat. You take it to the shop, which evaluates/ estimates the coat is worth $50.
You consign it; it sells; you make $25.
Or maybe it never sells, you get nothing.
Or maybe the shop has to mark it down to $40 or $30… you get less, say $20 or $15… and only after it sells, of course, which might be weeks or even months later.

Take the same coat in and offer it for sale outright. The shopkeeper evaluates it at the same $50. You get $12.50- $20, cash in hand today. The shopkeeper assumes all risk of a markdown or it never selling… so, if the coat sells, eventually, for $30 and the shopkeeper invested her $20 in it, she’s made $10 and in the meanwhile, she’s used up space in her shop and not had the $20 she gave you, to invest in more merchandise to sell. But you have your money, without any worry on your part.

Some folks like cash in hand today, others don’t mind waiting and sharing the risk of whether and for how much it will sell. It’s a matter of preference. If you don’t care for the buy-outright way, you shouldn’t feel guilty about switching to another shop’s consignment services.

Many thanks for the excellent question, and congratulations on recycling your no-longer-loved possessions!

Would you have explained this differently?

Tell us how….