Consignment Stores Vs. Resale Stores: What's The Difference?
It's impossible to escape the conscious movement in today's world. Spanning daily habits to how we consume goods and services, people are increasingly embracing living more sustainably and mindfully. Most often, concern for the environment is at the helm of such choices, according to research cited by Green Queen. The resale market, which was slated to reach up to $40 billion in 2022 alone, is only expected to grow in the coming years, with projections of used clothing occupying a whopping 27% of our wardrobes in 2023.
As GMI European marketing director Ralph Risk explained, the second-hand market is ubiquitous due to people's desire to live more economically and also because commercial shopping platforms like eBay and Amazon have made it more viable (via Marketing Week). Regardless of whether you're into second-hand stores, there have definitely been times when you've gone through your clothing and wondered if there was a place for some of those nearly-new items that could also give you something back in return.
That's where consignment stores and resale stores come in. They may sound similar, but a deeper look at both will help you decide which route to take in the future.
What exactly are consignment stores?
Recently, consignment stores have seen a significant rise in popularity, especially since the pandemic, according to Shopify. The concept of consignment basically refers to a form of transaction where a consignor (ideally you) works with a consignee (a store) to sell second-hand goods such as clothing, furniture, art, jewelry, etc.
The store handles the sale of the items on your behalf, per Restyle, and you will receive anywhere between 40% to 60% of the asking price, as the Duluth News Tribune confirms. Crucially, you'll only get a return on your goods if they sell. There are usually pre-arranged terms between the consignor and consignee about things like profit sharing and the number of days the shop will have the item on its shelves.
For instance, the consignment store Fine Clothing offers a period of 180 days, while Restyle only offers 60. The word "consign" means "to send," per Key Differences. As a result, consignment and thrifting have similar origins, as noted by Tree Hugger, with the key difference being that the latter stores aren't typically run for profit.
A closer look at resale stores
Although the concept of selling second-hand items in a sustainable cycle that offers goods for a lesser price than brand-new items remains the same with resale stores, there are marked differences between consignment and resale establishments. You may know about clothing brands you should and shouldn't look for while thrifting but the concept itself is also different since, per Chron, resale is profit-oriented just like consignment stores.
With a resale store, you will sell the items beforehand — and receive cash, or store credit in some cases like with Restyle — from them at the beginning of the transaction itself. However, what you receive will likely be much less than with a consignment because the shop is assuming the total risk and responsibility of clearing your goods off their shelves.
With resale stores, you relinquish possession and ownership of the items at the point when you receive money from the store, as Key Differences points out. The profit or risk of the sale lies with the store thereafter. They usually price the product based on its quality and demand in the market, according to Clothes Mentor.
Which is the better option?
The question of which type of store — consignment or resale — is better for you really depends on your goal when it comes to getting rid of unwanted stuff. If you're looking to get paid for your clothing, or other belongings, at the very beginning of the transaction, then resale stores might be your best bet, per Fine Clothing, especially since you don't have to sit around and wait until the store sells your items.
Of course, the major downside with resale is that the price you get for your clothing is going to be significantly less, as Restyle warns. With a consignment store, you, as the consignor, could have some control over the price point of your items as well, according to Clothes Mentor. However, with both types of stores, there are quality checks and requirements you must meet in order to be able to enter into the transaction in the first place (via Fine Clothing).
If the stores don't find your items to be of a high enough standard, or if they're unable to sell them within the stipulated time period (in the case of consignment), they may return them to you at your cost. Alternatively, you'd have to sell them off at a cheaper price or even donate the items to charity. Either way, it's a risk, so it's really all about weighing up the potential payouts when it comes down to it.