The Rise of Consignment Shops

Valli Herman of the LA Times reports on the growth of interest in consignment shops. As the economy stalls, especially in California, bargain hunters for furniture and household items are out looking and spending. The supply appears to be plentifully as well, as sellers are looking to convert household items into cash. Valli mentions the monthly Mani's Sunset Estate Auction at Bonhams and refers to it as a high end consignment shop open once a month. Appraisers should not forget the consignment market place when looking for comps, as it is now becoming more attractive to both buyers and sellers.

Valli states No matter what you need or want -- vintage pianos, affordable baby furniture or midcentury collectibles -- it's a market that's thriving like few others.

She continues Though the term "consignment" often conjures images of resale shops selling women's clothing, it's an attractive option to sell big-ticket items such as furniture. The consignors own their property until it's sold, so the consignment store needn't tie up cash in inventory -- a plus for credit-strapped retailers finding it difficult to keep aisles stocked with merchandise. Sellers also retain their privacy, gain access to sophisticated shoppers and, if all goes well, earn higher profit than if they tried to unload the goods themselves.

The consignment procedure is similar whether you deal with an esteemed auctioneer or your corner resale store: You sign contracts that specify how buyer and seller will split the proceeds, how the final purchase price will be calculated and how unsold items will be handled.

The proceeds can be split any number of ways -- 50/50, 38/62, perhaps a sliding scale that changes according to the purchase price. Some consignment stores define the length of a contract and the conditions under which an item may be discounted.

To read the full LA Times article, click HERE.