Some shops will never buy your stock. Not because they dislike it, but because their entire business is built on taking goods in, displaying them and paying the maker after a sale. Galleries, artisan collectives, craft co-operatives, vintage and resale boutiques, and a lot of small-town gift shops work this way by default.
If those shops are in your category, the choice is not really consignment or wholesale. It is which accounts you allow to be consignment, on what terms, and what has to happen before you insist on a bought order instead. The straight comparison of the two models is in wholesale vs consignment; this is the shop-by-shop version.
Which shops work this way, and why
Four kinds of retailer ask for consignment, and their reasons are different enough that your answer should be too.
Galleries and craft collectives. The model is native to the trade: artists supply work, the gallery takes a share on sale, and nobody expects an outright purchase. A brand selling ceramics, prints, jewellery or anything treated as a made object will meet this everywhere, and refusing it removes the channel entirely.
Artisan co-operatives and maker-run shops. Often the shop is staffed by the makers themselves. The split funds the rent. Some also charge a small monthly shelf fee, which is a different arrangement again.
Vintage, resale and secondhand boutiques. Their whole inventory system is consignment, and adding a new brand to it is one line in the software they already run.
Ordinary small gift shops with no cash. This is the group to be careful with. They are asking for consignment because the opening order frightens them, not because their model requires it, and they are the accounts where an unsold case sits for a year.
What the split actually looks like
In a bought wholesale order, the shop pays you about half the retail price and keeps the rest. In consignment, the shop keeps a share only when an item sells, and because they are carrying no inventory risk, their share is usually smaller.
Common splits sit between sixty and seventy percent to the maker. Take a print that retails at forty-five dollars. On a sixty-forty split you receive twenty-seven dollars when it sells, against the twenty-two fifty you would have received on a wholesale order. On a seventy-thirty split you receive thirty-one fifty.
| Wholesale order | Consignment | |
|---|---|---|
| Who owns the stock | The shop, at invoice | You, until it sells |
| You are paid | On terms, whether or not it sells | After the sale, on a cycle |
| Your share | About half of retail | Usually the larger share |
| Who chooses hard | The buyer | Nobody |
That last row is the real cost. A buyer who has spent their own money picks carefully, puts the product where people see it and talks about it. A shop with nothing at stake will happily take twenty items and leave them in the back corner, because the only person losing anything is you.
The terms to insist on before saying yes
Consignment is not a worse deal, it is an unwritten one, and that is what hurts brands. Write it down and most of the risk goes away.
- The split, and whether it is calculated on the retail price before or after sales tax
- The retail price, set by you, not adjustable by the shop without asking
- A dated inventory list signed at drop-off, item by item with a code
- A payment cycle with a date: the fifteenth of the following month, not "when we do the accounts"
- A statement with each payment saying which items sold and what remains
- A term, typically three or six months, after which unsold stock comes back or is bought
- Who carries the loss on breakage, theft and fire, and whether the shop's insurance covers goods held for others
- Who pays the freight, both ways
Put those eight lines on one page and ask for a signature. A serious shop will sign it without blinking, because it is how they already work. A shop that resists is telling you something useful. If you already publish trade terms, this page is a variant of them rather than a new document, and it should read consistently with your wholesale terms.
How to run a consignment account well
Treat it as your shelf in someone else's shop, because that is exactly what it is.
Send a small, tight selection rather than everything. Twelve items you believe in beat thirty that hedge. Price them, tag them with your own codes, and include a card with the maker story, because in this channel the story is doing the selling while you are not there.
Visit or check in monthly. Ask what has sold, swap out what has not, and rotate rather than restock. Stale consignment stock is the single biggest reason these accounts die, and the shop will never initiate the conversation.
Count everything, twice. Keep your own inventory record of what is out on consignment, per shop, per item. A brand with six consignment accounts and no record has no idea what it owns.
And watch placement, since there is no invoice creating an incentive. If your work is behind a pillar, ask for the table by the till and offer to supply a stand that makes it easy. The general point about earning position applies here with more force, not less, and it is covered in retail placement.
When to convert an account to a bought order
The moment to ask is when the numbers do the arguing for you. A shop that has sold through three batches on consignment has proven the product moves in their store. At that point, offer a wholesale price that is slightly better for them than the effective margin they have been earning, in exchange for buying the stock outright.
Frame it as an upgrade rather than a withdrawal. They get a better unit economics on something already proven, a deeper range, and priority on new releases. You get paid on delivery rather than on a sale that may never happen.
Some will say no, and if the shop is a gallery or a co-operative, that no is structural rather than negotiable, so keep them on consignment and be glad of the placement. The shops that should convert are the ordinary gift shops that were only ever avoiding an opening order. If they will not convert after a good run, the account is probably capped at whatever it is doing now.
Cash flow, and how much of it to allow
Consignment ties up stock and delays cash, so cap it. A workable rule for a small brand is that no more than a fixed slice of finished stock sits on consignment at any time, and no single shop holds more than you could afford to lose.
The tax and bookkeeping side matters too. Goods on consignment are still your inventory until they sell, so they stay on your books, and the payment you receive later is a sale at that point, usually against a self-billed statement or your own invoice raised on the statement. Keep the paperwork tidy from the first account; retrofitting it across six shops is miserable. If you are already issuing documents for bought orders, the format carries over from your wholesale invoice.
To work out which shops near you buy outright and which run on consignment before you spend a month finding out one at a time, paste your product link into WholesalePilot and look at the preview of stockists in your category.
Questions brands ask about consignment shops
Is consignment ever better than wholesale? For high-price, slow-selling, handmade items, yes. A five-hundred-dollar piece that sells twice a year is a hard buy for any shop, and consignment is what gets it on the wall at all.
What split should a new brand accept? Start at seventy to you and expect to land at sixty-five. Below sixty, the shop is being paid like a wholesale buyer without taking any of the risk.
How long should stock stay out? Three months, then a conversation. Six months is the outer limit before an item is dead rather than waiting.
Can a brand run both models in the same town? Yes, and most do. Just keep the retail price identical in both, or the shop that paid for its stock will notice.