Glossary of Consignment and Retail Terms

The Essential Consignment & Retail Glossary

Account: A record in your software or notebook for each consignor (or customer), tracking inventory, sales, and payouts.
Barcode: A unique printed code used to tag and scan items for pricing and tracking in your retail or consignment software.
Buy Outright: When the store purchases items directly from a seller, instead of selling via consignment.
Category: Inventory grouping such as women's clothing, shoes, home décor, or kids’ toys; crucial for organizing shop displays and reporting.
Commission: The shop’s percentage of each consignment sale. (e.g., 40% commission: consignor keeps 60%).
Consignment: An arrangement where the store sells items for someone else and pays them a percentage of the sale after the item sells.
Consignor: The person or business submitting goods for sale on consignment.
Consignment Agreement: A legally binding document outlining split, term, and return/donation policies between your shop and consignor.
Drop Off: The act of delivering items for intake/consideration at your shop. Often refers to scheduled intake sessions.
End-of-Day (EOD): The daily process of closing the register, counting cash, and recording final sales and transactions.
Full Inventory: A comprehensive list of all items currently for sale, including details like price, consignor, and inventory/sale status.
Hold: Setting aside an item for a specific customer, often for a limited time, before purchase.
Intake: The process of receiving, assessing, tagging, and recording new inventory from consignors or sellers into your system.
Markdown: A price reduction, often on unsold or seasonal items, as part of sales/promotions or to speed up turnover.
Payout: Payment (cash, check, e-payment, or credit) to consignors for items that have sold.
Point-of-Sale (POS): Your cash register system; may refer to hardware or software handling sales, receipts, and more.
Return (to Consignor): Unsold items that are picked up by the consignor after the agreed selling period ends.
Sales Tax: Government tax you collect on sales, and remit periodically. Rates and requirements vary by state/local rules.
Split: The percentage breakdown (e.g., 60/40) between consignor and shop for every sale.
Store Credit: Payment in credit (instead of cash) to a consignor or customer, usually applied to future purchases.
Term (Consignment Term): The length (days/weeks/months) items will be offered for sale before returning or donating unsold goods.
Turnover: The rate at which inventory is sold and replaced; a key business health metric.
Void: The cancellation of a sale or transaction, typically in software or at the POS.
Write-off: Unsold or lost inventory formally removed from records, often donated or discarded.

Why Understanding Shop Lingo Matters

Boosts your confidence talking with suppliers, customers, and staff.
Helps avoid costly mistakes in contracts, inventory, and payouts.
Makes sales and marketing communication smoother and more professional.

FAQ: Consignment and Retail Terms

Do terms like 'payout' and 'split' have the same meaning in every shop?

They’re similar, but always read each shop’s agreement. 'Payout' always means the money you pay a consignor, and 'split' is the shop/consignor share, but amounts/rules vary.

Is a consignment agreement required by law?

Some states require written agreements, and it’s always smart to have one for clarity and protection, even if not strictly legally required.

What does 'turnover' mean for my business health?

Turnover measures how quickly items sell and get replaced. Higher turnover usually means more profit and fresher inventory for customers.

What's an 'outright' vs. 'consignment' purchase?

'Outright' means you buy goods from the seller upfront; 'consignment' means you pay the consignor only when their item sells.

Quick Reference

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Add new words as you grow in the industry
Always clarify unfamiliar terms in any document or meeting

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