The Importance of Clear Terms
A well-drafted consignment terms sheet is more than just a legal document; it is a communication tool. By setting clear expectations regarding payouts, markdown schedules, and item liability, you reduce disputes and build trust with your inventory partners.
Essential Clauses for Every Terms Sheet
- Consignment Period: Typically 60, 90, or 120 days.
- Commission Split: Who gets what? (e.g., 40% to Consignor, 60% to Store).
- Markdown Schedule: Automatic price drops to keep inventory moving.
- Authentication & Quality: The store's right to reject items or charge for cleaning.
- Unsold Items: Clear deadline for pickup before items become store property or are donated.
Consignor Payout & Markdown Simulator
Use this tool to visualize how markdowns affect both the store profit and the consignor payout over a 90-day period.
| Days Active | Discount | Sale Price | Consignor Gets | Store Gets |
|---|
*Standard 30/60/90 day markdown logic applied.
Establishing Your Markdown Policy
In the resale world, "freshness" is currency. A standard markdown schedule ensures that if an item doesn't sell at peak value, it eventually reaches a price point that triggers a purchase. This prevents "clogging" your racks with stagnant inventory.
Best Practice: The 90-Day Lifecycle
Most successful shops utilize a 3-tier system:
- Days 1-30: Full Price. Maximum profit for both parties.
- Days 31-60: 20% Discount. Attracts "watchers" waiting for a deal.
- Days 61-90: 50% Discount. Final attempt to recover costs before donation.
Liability and "At-Risk" Inventory
Your terms sheet must clearly state that items are left at the consignor's risk. While your shop takes every precaution, standard consignment agreements usually specify that the store is not responsible for damage due to fire, theft, or "shop-wear" (minor damage from being handled by customers).