How consignor contracts, splits and periods work
A consignor record holds the split, the consignment period and any markdown schedule. Those terms attach to each item at intake, so what a consignor is owed never depends on what their terms happen to be today.
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The three terms that matter
- The split — what percentage of the sale price the consignor receives.
- The period — how long you hold the item before it expires out of consignment.
- The markdown schedule — whether, and by how much, the price drops as the item ages.
Almost every consignment dispute traces back to one of these three being unclear, undocumented, or changed after the fact. Getting them explicit is worth more than any software feature.
Choosing a split
| Split (store/consignor) | Typically used for |
|---|---|
| 50/50 | General apparel and household goods; the most common default |
| 60/40 | Stores doing significant work — photography, online listing, shipping |
| 40/60 | High-value designer or specialist pieces where the consignor has leverage |
| 70/30 | Low-value fast-turn stock where handling cost dominates |
The right number is a function of what you actually do. A store that photographs, describes, crosslists, ships and handles returns is doing far more work than a store that hangs an item on a rack, and the split should reflect that. Charging a 50/50 split while doing online fulfilment is a common way to be busy and unprofitable.
Periods and expiry
A consignment period gives both sides certainty. Without one, a consignor can ask for an item back at any point and you can hold inventory indefinitely, and neither is a good operating model.
SECND surfaces items that have reached expiry so you can act on them rather than discover them a year later. What happens at expiry should be in the contract, and there are only really three options.
- 1
Convert to store-owned
The item becomes yours to sell or discount freely. The cleanest option, and it needs to be stated in the contract up front.
- 2
Return to the consignor
You notify them and they have a defined window to collect. Set that window, or you will store other people's things forever.
- 3
Donate
Common for items nobody collects. Only defensible if the contract says so explicitly.
Markdown schedules
A markdown schedule — for example 20% off after 30 days, 40% after 60 — is what keeps a consignment floor moving. Agreeing it in advance means a markdown is not a conversation each time, and the consignor is not surprised by a lower payout.
What belongs in the written contract
- The split, and whether it applies to gross or net of marketplace fees.
- The consignment period and exactly what happens at expiry.
- The markdown schedule, if any.
- Whether items may be listed online, and on which channels.
- Payout timing and method.
- Liability for loss or damage while the item is in your care.
- The pickup window and what happens to uncollected items.
Frequently asked questions
Can different consignors have different splits?
Yes, and most stores end up with a default plus a handful of negotiated exceptions. The split lives on the consignor and can be overridden per item for one-off arrangements.
What happens if I change a consignor's split?
It applies to items received from that point onward. Items already in your shop keep the terms they came in under, which is both fairer and much easier to defend.
Should consignment periods differ by category?
Often yes. Seasonal apparel has a natural window; furniture and collectibles may justify longer. What matters is that the period is set deliberately rather than defaulting to whatever the software shipped with.
Is a signed contract really necessary?
Yes. It is the document that resolves every disagreement about expiry, damage and payouts, and it costs you nothing to have one. Consignment without written terms works fine right up until it does not.
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