How to Start a Consignment Business in Australia

Last updated: June 2026

Consignment is the smartest way to start a resale business in Australia because you don’t buy stock — you sell other people’s items and take a cut. No upfront inventory costs, no cash tied up in products, and your profit margins (40–60% per sale) compete with traditional retail without the risk. Whether you’re setting up a physical storefront in your local shopping strip, running an eBay store from home, or operating entirely online across multiple marketplaces, the structure is the same: consignor brings items → you list and sell → you split the proceeds.

This guide walks through every step — the legal setup, finding consignors, choosing software, setting commission rates, and complying with ATO requirements.

Step 1: Decide Your Niche and Business Model

Before you register anything, decide what you’ll sell and where. The most profitable Australian consignment businesses focus on a specific category:

Your first decision: physical store, online-only, or hybrid. Online-only keeps overhead low (no rent, no shopfitting) but requires more marketing effort. A physical storefront drives walk-in consignor traffic but adds $1,500–$5,000/month in rent and fit-out costs.

The hybrid model — small showroom with online listings — is increasingly the sweet spot for Australian consignment businesses.

Step 2: Register Your Business and Get Compliant

ABN and Business Name

Register for an Australian Business Number (ABN) through the Australian Business Register website. This is free and takes 15 minutes if you’re a sole trader. If you want a specific business name, register it through the Australian Securities and Investments Commission (ASIC) for $39 for one year or $99 for three years.

GST Registration

You must register for GST if your annual turnover is $75,000 or more. Many consignment stores register voluntarily because it lets you claim GST back on business purchases (rent, software subscriptions, shelving, marketing). The GST treatment on consignment sales works like this:

• The full sale price includes GST (if you’re registered)
• The consignor’s payout is GST-exclusive (they’re not your employee)
• Your commission is effectively your margin after remitting GST on the full sale

This is where consignment software with BAS reporting saves hours of manual work — the tax treatment of consignment sales isn’t intuitive.

TPAR (Taxable Payments Annual Report)

This is the one most new consignment businesses miss. If you pay consignors more than $10,000 in a financial year — and with even 50 items/month at a 50% split, you’ll easily cross that threshold — you need to lodge a TPAR each year by 28 August.

The TPAR reports all payments to individual consignors to the ATO. It doesn’t change your tax liability, but failing to lodge carries penalties. TurnGoods generates TPAR-ready reports automatically from your consignor payment data.

Insurance

At minimum: public liability insurance ($20–50 million coverage is standard for retail). If you’re selling electronics or baby equipment, consider product liability insurance. Most policies run $600–$1,800/year depending on your niche and turnover.

Step 3: Set Your Commission Rates

The standard Australian consignment commission is 50/50 — you keep 50% of the sale price and the consignor gets 50%. But one rate doesn’t fit all scenarios.

Tiered Commission by Item Value

This tiered structure incentivises consignors to bring higher-value items while protecting your margin on cheap, slow-moving goods.

Tiered Commission by Volume

Your best consignors — the ones dropping off 30+ items per month — deserve a better rate:

• Standard: 50/50 split on everything
• Preferred (10+ items/month): 55% consignor, 45% store
• VIP (30+ items/month): 60% consignor, 40% store

The TurnGoods per-consignor commission system handles these tiers automatically, applying the right split per item based on consignor profile.

Markdown Schedules

Include a markdown schedule in your consignment agreement so there’s no confusion:

• Day 1–30: Full price (as agreed)
• Day 31–60: 20% off
• Day 61–90: 40% off
• Day 90+: Consignor can either reduce price further or pick up unsold items

Most consignment agreements run 90 days with automatic markdowns at 30-day intervals. Clear markdown policies prevent the “why hasn’t my item sold yet?” conversations.

Step 4: Create Your Consignment Agreement

Every consignor must sign a written agreement before you take their items. A good agreement covers:

• Commission split — exact percentage or dollar amount
• Contract period — typically 90 days
• Markdown schedule — automatic price reductions
• Pickup policy — what happens to unsold items after the contract period
• Loss/damage policy — who bears the risk (standard: store insures while on premises)
• Payout terms — how and when consignors are paid (weekly, fortnightly, or monthly)
• Authentication requirements — for luxury items
• Excluded items — what you won’t accept

The ATO recognises consignment agreements as a bailee-bailor relationship, not employer-employee. Your agreement should clearly state the consignor is an independent supplier, not an employee, to avoid payroll tax complications.

Step 5: Find Consignors

Consignors are your inventory. They’re also the hardest part of starting. Here’s where to find them:

Free channels

• Facebook community groups — join local “buy nothing”, “selling”, and community groups. Post about your consignment service and what you accept
• Gumtree — post a “Looking for items to sell on consignment” ad in your local area
• Word of mouth — tell every friend, family member, and acquaintance. Offer a referral bonus (one month at 60/40 split) for every consignor they bring in
• Local noticeboards — cafes, libraries, community centres. Physical flyers still work for reaching older consignors with wardrobes to clear

Paid channels

• Facebook targeted ads — target your suburb + 5km radius, women 25–65 interested in fashion. Budget $5–$10/day. Track consignor acquisition cost
• Google Local Services ads — if you have a physical store, these show above search results for “consignment store [suburb]”
• Partnerships with estate cleaners — estate clearers have massive volumes of items to move. Offer them a referral fee
• Instagram — post your best-selling items. Consignors approach stores that look busy

Pro tip

The consignor pipeline is always the bottleneck in the first 6 months. Spend 30 minutes every day on consignor outreach for the first year. Once you have 20–30 active consignors, the word-of-mouth pipeline usually sustains itself.

Step 6: Choose Consignment Software

Spreadsheets break at around 100 items. Once you’re past the hobby stage — and if you’re reading this guide, you’re planning a real business — you need software. Here’s what to look for:

TurnGoods is built specifically for Australian consignment stores. It handles everything above, including AUD pricing, GST and BAS compliance, eBay and Trade Me NZ direct listing, consignor self-service portal, and TPAR-ready annual reports. Every new consignment store in Australia should be using purpose-built software rather than trying to make US-centric tools work.

Alternative tooling

• SimpleConsign — US-based, good consignment core but no cross-listing or AU tax compliance, $159–$359 USD/month
• Spreadsheets + POS — works at ~50 items, becomes unmanageable past 100. You’ll waste 5–8 hours/week on admin
• Square + manual tracking — payment processing is easy, consignment tracking requires manual record-keeping

Step 7: Set Up Your Operations

Physical store essentials

• Shelving and display racks — budget $500–$3,000 depending on space
• Mannequins and hangers — $100–$500
• POS terminal / tablet — $300–$1,000 (software covers POS)
• Barcode printer and scanner — $200–$400
• Lighting — good lighting sells items. Budget $300–$1,000
• Security cameras — $200–$600

Online store essentials

• Good lighting setup for photos — $50–$200 (ring light + backdrop)
• Scale for shipping — $30
• Poly mailers and boxes — $50–$100/month for small operations
• Printer for shipping labels — $100–$300

Photo standards

Items with 3+ good photos sell 40% faster than single-photo listings. Your photo setup doesn’t need to be expensive — natural window light, a plain white or neutral background, and consistent framing make a massive difference. For luxury items, photo quality signals trustworthiness.

Step 8: List and Sell

Where to list

Your choice of sales channels depends on your niche:

Cross-listing strategy

List items on 2–3 platforms to maximise exposure. Use a cross-listing tool that auto-delists the moment an item sells on any platform — otherwise you risk selling the same item twice and having to apologise to a buyer. TurnGoods handles cross-listing with auto-delist.

Pricing strategy

Price 15–20% higher than your target net to account for marketplace fees, markdowns, and negotiation room. Use eBay sold data to price competitively — items priced at market rate sell 2–3x faster than overpriced ones. TurnGoods’ AI pricing feature analyses sold comparables and suggests optimal prices automatically.

Step 9: Understand the Tax Side

GST on consignment sales

This is the most commonly misunderstood part of running a consignment business:

• You charge GST on the full sale price of each item (if you’re GST-registered)
• The consignor’s payout is GST-exclusive — you don’t withhold and remit GST on their portion
• Your BAS reports the full sale as GST-inclusive income
• You claim the consignor payout as a GST-exclusive expense

TurnGoods generates BAS-ready GST reports that handle this correctly with ATO field mappings (G1, G3, 1A, 1B).

Record keeping

Keep records for 5 years (ATO requirement):

• Consignment agreements (signed copies)
• Item intake records with photos
• Sales receipts
• Consignor payout records
• Monthly/quarterly BAS reports
• TPAR records

Deductions you can claim

• Rent (or home office percentage if working from home)
• Software subscriptions (consignment software, accounting, design tools)
• Marketing and advertising
• Packaging and shipping supplies
• Insurance premiums
• Bank fees and merchant processing fees
• Stationery and office supplies
• Training and professional development

Step 10: Scale the Business

Once you have consistent consignor flow and 200+ items turning over monthly:

1. Hire help — a part-time intake assistant saves 10–15 hours/week
2. Expand to multiple marketplaces — add Trade Me NZ or Depop if you’re only on eBay
3. Add consignor remarketing — automatically reach out to consignors whose items sold 3+ months ago with new inventory requests. TurnGoods automates this
4. Introduce tiers — VIP consignor tier for 30+ items/month with better splits
5. Optimise categories — use profit-by-category reports to double down on your highest-margin niches
6. Consider a second location — only when the first store is at capacity and you have reliable staff

The difference between a surviving consignment business and a thriving one is often operational efficiency: software that replaces manual work, systems that handle repeat tasks without thinking, and clear communication with consignors that eliminates confusion.

FAQ

This content is for informational purposes only and does not constitute legal or financial advice. Consult a registered tax agent or business advisor for advice specific to your situation. Fee rates and regulations mentioned apply as of June 2026.