Selling old or unwanted clothes at a consignment store can be a fantastic way to earn some extra cash. But picking a consignment store to work with can be a bit daunting. Here are a few tips, based on personal experience, of what to look for in a consignment store.
1. Payout ratio
Perhaps the most important factor is the payout ratio. I mean, you're consigning your clothes to make a little money, right? Look for a store that offers at least a 40–60% payout, meaning you make 40% of the profit earned from selling your item. Do NOT work with a store that offers to pay you upfront, before your items are even placed on the floor. Stores that work in this manner often pay you much less upfront, as they are taking the risk that your item will not sell, and are hedging their bet by paying you a smaller amount of the potential profit.
2. Store regulations
Look for a store that has rules and regulations that are agreeable to follow. While this may come down to personal preference, make sure to read the consignment contract before signing to make sure you know what you’re agreeing to. For instance, some consignment stores do not allow consigners to pick up unsold merchandise. Personally, I like to pick up any of my clothing that does not sell and either re-evaluate if I want to keep it or donate it to a thrift store or family in need.
Take a look around a consignment store and make sure they are selling merchandise comparable to what you are bringing in, at a price you think is fair. Some consignment stores value quantity over quality and look to move merchandise at a fast pace at lower prices. This can be an ideal store to take older, inexpensive clothing to—however, if you are looking to sell things purchased within a year or two or of high quality, look for a store that specializes in selling this type of merchandise. This is especially important when you are considering selling a designer piece. Ask the sales representative for an estimate of what they would price an item in question. If you think it’s fair, go ahead; otherwise, consider taking the piece to a different store. It is also good to ask what a store's sale policy is. Sometimes you could agree to sell an item at a certain price, only to find out they put it on sale, lowering the end sale price. This is especially important if you plan to consign designer merchandise.
The consignment business model is based in large part on trust, and transparency is a major factor in creating that trust. I once worked with a consignment store that sent an email each time one of your items sold, detailing how much it sold for, how much of that profit was your share, and a running total of how much you had earned. While this case is exceedingly rare, it represents the information you should be able to ask for from any consignment store you work with.
5. Money collection
It is very important that you fully understand each consignment store's process for collecting your profits. Do they expect you to pick up cash or a check within a certain number of days? Will they mail you a check if you don’t come into the store? Is there a benchmark to reach before being able to collect? Make sure you know the answer to all of these questions. Because you are doing this to earn some cash, you don't want a misunderstanding to reduce the amount you may earn. Ideally, you should be able to come in whenever you want to collect your earnings. Some consignment stores will even automatically send you a check if you haven't been in within a certain period of time.
6. How to spend your earned funds
One final, and fun tip. I like to designate all the money I earn from consigning items to a specific fund. I often use my earned money to buy new clothes, or put it toward a fun trip. You could also put the money toward a home update, a fun night out, or even just to help with everyday expenses.
However you choose to spend your additional funds, I'm sure you'll become just as addicted as I am. Plus, it makes cleaning out your closet a lot more fun!