What Is a Consignment Shop?

A consignment store is a type of resale shop that displays goods for a percentage of the sale price. In this retail model, people bring in items and get paid a certain amount after the merchandise sells. Consignment shops can sell clothing, home goods, art, furniture, and even books. However, apparel is the most popular category. 

This article covers the history of consignment shops and how they differ from thrift stores.

Where Does the Term "Consignment" Come From?

The word consign has evolved in meaning over the years, but it generally means to give something over and into the care of another person. There is some debate on exactly where the word originated; it could be derived from the French word consigner or the Latin consignare, which means to mark with a seal.

Both derivatives reflect what happens when gently-used clothing is consigned. A person will give an item to a third party to sell for them. Each store (or consignee) has their own set of procedures, but typically a store will hold the clothing for a pre-arranged number of days and give the owner of the item (or consignor) 40-60% of the sale.

Four decades ago, an item of clothing needed to be in good shape for it to be consigned. Being clean and in sufficient selling condition is an important part of this arrangement. Depending on the store and its clientele, the garment may need to be in fashion or a particular style.

While this type of operation is known mostly for resale, consignment also allows for any retail space to have inventory without taking on a great financial burden. This practice is also used in instances of smaller boutiques where vendors can sell their items on consignment.

The History of Consignment Shops

Before there were consignment shops, there were thrift stores. Before there were thrift stores, there was a market of push carts.

Thrifting has long carried a stigma in the United States, although this is changing today. According to historian Jennifer Le Zotte, who wrote a book on the realm of resale, this stigma was not just socio-economic prejudice, but ethnic as well.

The historic rendering of Le Zotte in From Goodwill to Grunge: A History of Secondhand Styles and Alternative Economies tells how the industrial revolution began to change the way clothing was made. Prices began to drop, making clothing more accessible. The unfortunate side effect was it also gave them the semblance of being disposable.

Jewish immigrants saw an opportunity and began selling used clothing from push carts. But anti-Semitism was high, and many viewed the clothing as unsanitary. Those that did buy clothing from push carts were seen as tasteless, low class, and impecunious. Satirical allegories were written in newspapers about the dangers of purchasing from these establishments.

In 1897, religious groups saw an opportunity to raise funds and began to jump on board, changing the narrative and the optics of the resale industry. People could now donate their clothing and feel like they were doing something good and charitable for society. The Christian ministry aspect gave resale legitimacy. Over the next few decades, the number of stores increased, and in the 1920s, Goodwill opened stores that offered a department-store quality.

It wasn't until the 1950s that consignment stores began to make an appearance. These catered to higher socio-economic clientele who enjoyed purchasing luxury garments at discounted prices. Today, there are more than 25,000 resale stores in the United States.

Consignment Stores vs. Thrift Stores

Though a type of secondhand store, consignment stores aren't the same as thrift stores. Thrift stores are donation-based, whereas consignment stores pay the owner for the items it sells.

There is also a difference in ownership of the item. In thrift stores, the owner gives up rights to the items—but when consigning, ownership of an article of clothing remains with the consignor. The consignee or store is simply offering up space or a platform from which to sell.

Another significant difference is that of the mission. Thrift stores are most often non-profit ventures. Goodwill and the Salvation Army are some of the most popular examples of this, with more than 4,600 stores between the two. They make up nearly a fifth of all resale enterprises.

Consignment stores, on the other hand, are nearly always for profit. Consigning clothing allows the consignor the convenience of earning money while still keeping their unwanted apparel out of the landfill. Consignees are able to only pay for items they sell and keep an inventory of products with little overhead for the goods themselves.

Consigning has the advantage of being a sustainable option while helping consignors earn extra cash. For shoppers, this is a method of purchasing newer, more trendy styles in a manner that doesn’t belie the need to shop in an ethical manner.