If you’re paying every consignor the same commission rate, you’re leaving money on the table with your high-volume sellers and probably undercharging for the overhead that casual drop-offs create.
The standard 50/50 split works as a starting point. But once you’re managing 20 or more consignors, a one-size-fits-all rate stops making sense. Your best consignor — the one who drops off 40 items a month, sells fast, and never disputes a payout — is worth a better deal than the person who brings in three overpriced t-shirts twice a year and emails you weekly asking about them.
Here’s how to structure variable consignment commission rates, when to offer different terms, and how to manage it all without a sprawling spreadsheet.
Why One Rate Doesn’t Fit All
Consignment commission isn’t just about what’s fair — it’s about what drives behaviour.
High-volume consignors need a better rate to stay loyal. If you’re paying them 50% and a competitor offers 60%, they’ll move their inventory. The math for you still works — more items, faster turnover, lower handling cost per item — even at a higher consignor share.
Casual consignors (1–5 items per drop-off, infrequent) generate more overhead per item. Intake processing, tagging, photographing, and listing 3 items takes nearly as long as 30. A standard or slightly lower rate is justified.
Luxury consignors — the ones bringing in Hermès bags, Chanel jackets, and Rolex watches — expect premium terms. Items valued above $500 involve authentication, higher liability, and a longer sales cycle. Offering 65–70% to attract this inventory is standard in the Australian luxury consignment market.
New consignors benefit from an introductory arrangement — a structured trial period that demonstrates your sell-through rate and builds trust before they commit their best items.
Getting these tiers right means you keep your volume sellers, attract high-value luxury consignors, and don’t subsidise the occasional drop-off at the expense of your margins.
The 4 Commission Models
1. Percentage Split (Most Common)
The store takes a percentage; the consignor keeps the rest. In Australia, the standard split is 50/50, though luxury stores often run 60–70% to the consignor on high-value items.
Examples:
- Standard: 50% consignor / 50% store
- Volume seller: 60% consignor / 40% store
- Luxury / VIP: 70% consignor / 30% store
- Clearance / aged stock: 40% consignor / 60% store
The percentage model is transparent and scales naturally — the more an item sells for, the more both parties make.
2. Flat Fee
The store charges a fixed amount per item regardless of sale price. Works well for low-value goods where a percentage creates awkward fractions, or for charity and clearance items.
Examples:
- $10 flat per item (for items priced under $50)
- $20 flat per item (for standard intake)
The downside is that flat fees don’t scale — a $5 flat fee on a $200 sale isn’t worth it for the store; a $20 flat fee on a $25 item isn’t worth it for the consignor.
3. Tiered by Volume
Commission rates improve as consignors hit volume thresholds. Rewards loyalty and incentivises consignors to consolidate their inventory with you rather than spreading across multiple stores.
Example tier structure:
- 1–10 items/month: 50% to consignor
- 11–30 items/month: 55% to consignor
- 31+ items/month: 60% to consignor
This is the model large consignment operations use. Consignors understand they’re being rewarded for volume, which encourages them to bring more items.
4. Category-Based
Different item categories carry different margins, handling costs, and sell-through speeds — so different rates make sense.
Example:
- Handbags and accessories: 65% to consignor (fast-selling, high-value, less handling)
- Clothing: 50% to consignor (higher handling per unit, more size-dependent)
- Electronics: 55% to consignor (moderate turnover, some testing required)
- Furniture: 45% to consignor (heavy handling, slower turnover)
Category-based rates work well for stores with diverse inventory. They’re harder to communicate to consignors up front, so clear written agreements are essential.
The Spreadsheet Nightmare
Before software, variable commission rates were tracked in spreadsheets. The problems multiply quickly:
- Who gets what rate? Look up every consignor manually before calculating a payout
- Rate changes aren’t tracked — no audit trail if a consignor claims you changed their rate without notice
- Payout errors — applying the wrong rate to 30 items because the spreadsheet wasn’t updated
- “I thought my rate was 60%” — the most common dispute, and with no signed record, it’s your word against theirs
- Month-end is hours of work — calculating variable payouts across 20+ consignors takes a full afternoon
The more consignors you have, the more this problem compounds. And the more valuable your consignors are, the higher the cost of a payout dispute.
How TurnGoods Manages Variable Commission
TurnGoods stores the commission rate directly in each consignor’s profile. One field, one rate, applied automatically to every payout calculation for that consignor.
Setting a per-consignor rate:
- Open the consignor profile
- Set their commission percentage (or select flat fee / tiered)
- Save — all future payouts for that consignor use this rate automatically
What happens at payout time:
- Sales for the period are pulled for each consignor
- The correct commission rate is applied per consignor
- Net payout is calculated
- A payout report is generated with a full line-by-line breakdown
No manual lookups. No cross-referencing a spreadsheet. No maths. The correct rate is always applied.
Audit trail: Every rate change is logged with a timestamp. If a consignor questions their rate, you can show them exactly when it was set and what it was changed from.
Real-time fee calculator: Consignors can see exactly what they’ll earn before they drop off an item — enter a proposed sale price, their rate is applied, they see their net. Removes the “I didn’t know I’d only get $X” friction.
Per-consignor commission overrides are available on the TurnGoods Scale plan ($299/mo). The Growth plan supports a single store-wide rate for all consignors.
Best Practices for Setting Commission Rates
Start with a clear default. Set a store-wide standard rate (most AU stores start at 50/50) that applies to all new consignors unless overridden. This is your baseline; exceptions are the per-consignor overrides.
Create named tiers, not ad hoc rates. Rather than setting custom rates for each consignor individually, define named tiers — Standard, Silver, Gold, Luxury — with clear criteria. It’s easier to communicate and easier to defend.
Review rates quarterly, not reactively. Don’t wait for a consignor to ask for a better rate — proactively review high-volume consignors every quarter. Showing them a rate upgrade before they ask builds loyalty.
Communicate rate changes with advance notice. Give consignors at least 30 days’ notice of any rate change. Document it in writing. A consignor who feels blindsided by a lower rate will leave and post about it.
Put variable rates in the consignment agreement. If a consignor has a rate different from your standard, the agreement should reflect this explicitly. TurnGoods generates the agreement with their specific rate already populated — no separate paperwork needed.
Don’t discount aggressively to acquire new consignors. Offering a 70% intro rate to every new consignor trains them to expect it. Better to offer a performance review after 3 months (“if you hit X items, we move you to Gold rate”) so the better rate is earned.
A Practical Example
Rebecca runs a consignment boutique in Melbourne. She has three types of consignors:
- Casual drop-offs (most consignors): 1–5 items per quarter, varied condition. Standard rate: 50/50.
- Power sellers (6 consignors): Drop off 20–50 items per month, fast-selling items in good condition. Rate: 60% to consignor.
- Luxury consignors (2 consignors): Designer handbags, jewellery, watches valued $500–$3,000+. Rate: 70% to consignor.
Without TurnGoods, Rebecca’s month-end process: open spreadsheet, look up each consignor’s rate, manually calculate payouts for 40+ active consignors, double-check maths, prepare statements. Takes 3–4 hours.
With TurnGoods: open payout report, review auto-calculated payouts for each consignor at their stored rate, approve, export statements. 20 minutes.
The payout accuracy is also higher — no copy-paste errors, no applying the wrong rate to the wrong consignor.
Setting Competitive Commission Rates in Australia
For reference, current market rates across the Australian consignment sector:
Standard fashion/clothing consignment: 50% to consignor is the AU norm. Some stores do 55–60% to attract better inventory.
Luxury handbags and accessories: 60–70% to consignor is expected for authentic designer goods. EMIER, for example, starts at 10% to the store (90% to consignor) for very high-value items.
Furniture and homewares consignment: 40–50% to consignor is typical given the higher handling and storage overhead.
Charity consignment: Often 50–70% to the owner, with the remainder to charity — different model but similar structure.
If you’re offering lower than market rates and struggling to attract good consignors, the commission structure is the first thing to review. Better inventory at slightly lower margins beats poor inventory at higher margins every time.
Next Steps
If you’re currently using a single rate for all consignors and considering moving to variable commission, the process is:
- Audit your current consignors — identify who your high-volume and high-value consignors are
- Design your tier structure (2–4 tiers is usually enough)
- Update your consignment agreement template to accommodate variable rates
- Communicate the tier criteria to all consignors so they understand how rates are set