What is the Difference between Thrift and Consignment Stores?
We clean out the house or buy new furniture and then we go donate our gently used items to a thrift store. But what if we know these items have a resell value that we would like to make a profit on? This is where knowing the difference between thrift and consignment stores will come in handy!
Currently 20% of Americans shop at secondhand stores and this is rising every year. The majority of purchases are for clothing, electronics, books, and furniture. If more people started utilizing the industry, we could not only help the environment, but we can also save a lot of money, and make some money off of our no longer needed items.
65% of resale shoppers said that they spend the savings of buying used on experiences for their families! That means there is a lot of people out there that have learned to pay less for some items, in order to splurge on items that line up more with their family values. To find out more about spending on family values, check out this article on “Value Based spending & Changing your Money Mindset“.
How do thrift stores work?
Currently there are over 25,000 resales shops in the US, but not all resale shops are the same. The most common resale shop is the Thrift Store, and what makes them unique is that they don’t pay for their inventory.
Thrift stores usually receive all their items through donations and drop offs by regular people like you and me. Places like Goodwill rely on people cleaning out their house and dropping off unwanted items in order to have things to sell at a discounted price.
Lots of thrift stores are also run by charities and churches, that take the profits from the store to be able to continue their mission. For example, in my area there are thrift stores that support women and children in domestic violence situations, and there are also church stores that support the homeless.
Even Goodwill uses some of their profits to assist people in finding jobs and offering employment training programs. Goodwill is a for profit company, so they don’t put all their profits towards the community like churches and charities do.
When you donate items at a thrift store, you usually are just getting a receipt in return for your items. These receipts can be used to offset your tax return. For tips and tricks for shopping at thrift stores, check out this article, “Are Thrift Stores worth it?”
How do consignment shops work?
Consignment shops look very similar to thrift stores but they operate differently. At a consignment store, a person will bring in items for the shop to sell for them and they make money in exchange for their items. Some will pay you upfront for your items and then resell them, or they work out a sales agreement for a set amount of time.
For example, I can take a china cabinet in good shape to a consignment store and have them sell it for me, and then I get 40-60% of the profit of the sale. If the china cabinet did not sell within a certain amount of time, then I will take it back and pay no fees.
Each consignment store will set their own rates and percentages of sale for items that they sell on your behalf. Some consignment stores only sell clothing, only sell furniture, or specialize in antiques. Typically, consignment stores will sell higher priced items than what is normally seen in a thrift store.
Some consignment stores will also sell donations at no profit to the person doing the donating, so you will have to check with your local stores to see how each store is managed.
Are consignment shops worth it?
Consignment stores can be a great money-making opportunity if you are wanting to sell your items but not have to handle the transactions yourself. You are supplying the items for the store to sell, and in exchange the store handles the customer service and marketing of your items. When you item is sold, then you make money, and the store also makes money.
If you don’t have the time or patience to have a yard sale, sell online, or live in a space that is not in a high traffic area, then selling at a consignment shop may be worth it! Consignment shops are also a good option if you are moving, have a family member that passed away, or are unsure what the value of your items are worth.
Most consignment shops will advise you what the going price should be for your items because they already know what their customers like and pay for similar items. This information can be very valuable because in order for the store to make the most commission they will want your item to sell for a very generous price.
Tip for Selling on Consignment
Here are some helpful tips to making the most money by selling on consignment and keeping yourself organized too!
- Make a List – go through all of your items and make a list of what you would like to sell first. If you have more than one of an item, put them together into a category. (For example: 3 dressers, 4 lamps, 2 nightstands, etc.) If you can take a picture of the items and have them available on your phone.
- Go visit the store with your list – Before loading up all your items and taking them to the store, go visit a few stores. During your visit, ask about commission rates and time frames. Remember each store is different, so they will each have a different pay out plan. Also find out about the length of time that your items can be available for sale. Some places will only allow a few weeks, and others will allow months to sell items, but this will depend on the amount of space available at the store.
- Discuss the items you have for sale – By showing the staff at the consignment store your list and pictures, they may be able to rule out some items that won’t sell well at their store. This will keep you from loading up items and then having to bring a bunch back.
- Make an appointment – if you find a store or a few stores to take all of your stuff to sell, them make appointments to drop off your items. By scheduling a specific day or time slot, you are much more likely to follow through with taking your items to the store, and the store will be ready to assist you with the unloading of your items.
- Get copies of All Paperwork – Before leaving your items at the store, you should have copies of a Sales Agreement with commission payouts and also the time frame that your items will be at the store. If you leave the store without this information, you may not get paid the same terms that you agreed upon. Some store also have a clause that says any items left past a certain time frame become property of the store, so make sure you know when your agreement is due to expire.
Making Extra Money off of Unused Items
If you have items that you no longer use or need, then you have the perfect opportunity to make some extra money. If the items are low end or have a low value then you may want to have a yard sale or donate them to a thrift store.
If your items can potentially be sold for more than $50, you may want to sell them yourself online or use a consignment store to sell the items on your behalf. Consignment stores usually take half of the profit of a sold item, but they are providing the location, the buyers, and the customer service.
If you don’t have the time, patience, or knowledge to sell the items yourself, using a consignment store can help you make money and get the items out of your house. I typically like to try selling an item first on the Facebook marketplace, and if I am not able to sell it myself, then I will go check out some consignment stores in my area.
