Consignment is a "pay when it sells" arrangement: a shop or gallery takes your work, displays it, and pays you only after a piece actually sells, keeping an agreed cut of the retail price. That cut varies widely by venue type and region — craft shops, fine-art galleries, and consignment clothing stores all differ — so treat any "typical" split as a starting point and read the consignment agreement. You keep ownership of unsold work and can usually recall it. It differs from wholesale, where the buyer purchases your goods outright up front and resells them.
The tradeoff is cash flow versus risk. Consignment gets your work in front of customers without the shop fronting any money, but you carry the inventory risk and wait for payment — sometimes on a monthly cycle, sometimes longer. Wholesale pays you sooner and transfers the risk, usually at a deeper discount.
Consignment complicates inventory because goods physically leave your location while still belonging to you. Tracking consigned stock as your inventory held at another location keeps your valuation and your reconciliation honest until each piece sells or returns.
Related terms
Wholesale
Selling your products in bulk to a retailer at a discounted price so they can resell them at full retail — distinct from selling direct to the end customer.
Pricing Tier
A named pricing configuration (like retail, wholesale, or market) that applies a markup or adjustment formula to calculate prices. Useful for selling at different price points.
Inventory Valuation
The total monetary value of all inventory currently in stock, calculated based on purchase costs. A key report for understanding the assets held in your business.
Transfer
The movement of inventory from one location to another within your business. Creates records at both the source and destination locations.