To sell products on consignment, you choose stores that suit your product, agree on price and commission, put a simple agreement in writing, and deliver goods with a note listing quantities. Then you count stock on a regular schedule and collect payment for what sold. Getting onto a shelf is usually the easy part. Keeping clean records afterwards is where most suppliers struggle.
If the basics are new to you, start with what is consignment selling. This guide covers the practical side.
1. Choose the right stores
Not every store fits your product. Before you approach one, check:
- Whether its customers match the people who would buy your product.
- Whether it already sells similar items, and at what price.
- How it displays and looks after what it carries.
- Whether it already works with other consignment suppliers.
Start with two or three stores. It is easier to look after a few points of sale properly than to spread yourself across ten.
2. Prepare your products and prices
Before the meeting, have these ready:
- Labelled products with a visible price or a clear price list.
- Packaging that survives handling in a store.
- One retail price, the same in every location.
- Your cost per unit, so you know how far your share can drop.
Knowing your margin before you negotiate keeps you from accepting a commission that loses you money.
3. Talk about commission and margin
This is the most awkward conversation, so have it early. Ask what percentage the store keeps and what price it is calculated on. Ask who pays for display materials or packaging, if there are any such costs.
For example: if your jar retails at 10 and the store keeps 30%, you receive 7 for each unit sold. Run this with your real numbers before you say yes.
4. Put the agreement in writing
It does not have to be long, but it has to be clear. In general terms, it should cover:
- Names and contact details of both parties.
- The product list and retail prices.
- The store’s commission or margin.
- How often stock is counted and who does it.
- Payment deadline and method after each count.
- What happens to damaged, expired or lost goods.
- How unsold goods are collected or returned.
- How and with what notice either side can end the arrangement.
If the goods are valuable, have a lawyer review the agreement. This is general information, not legal advice.
5. Deliver with a delivery note
Each time you leave stock, hand over a note with the date, products, quantities and prices. Ask someone at the store to sign or confirm it.
That note is your starting point. Every later count is compared against it. Keep a copy, and never hand over goods on a verbal understanding.
6. Decide how often to count
Counting is what turns a delivery into a sale. Delivered minus what remains equals sold.
- Count on a fixed schedule: weekly, every two weeks or monthly.
- Pick a predictable day so the store does not forget.
- Record each count with the date and who did it.
If months pass without a count, differences pile up and nobody remembers what happened. More on this in tracking consignment stock.
7. Settle up and get paid
After each count, work out what sold and what you are owed. Send a simple statement: what was delivered, what sold, what remains, what was returned, and the amount due.
Agree the payment deadline and method at the start. When the store pays, record the date and amount. A payment without a record is a future argument.
8. Handle unsold and damaged items
Settle these points before you deliver:
- Whether unsold goods stay, are collected, or are swapped for other products.
- Who covers items broken in the store and who covers items that arrive damaged.
- What happens to expired or out-of-season goods.
- When you restock: at a minimum level, on a calendar, or on request.
Fewer surprises come up when it is all written down and both sides read it the same way.
How to pitch the store
Many store owners meet suppliers every day, so keep it short. Bring a sample, your price list, the commission you propose and an idea of how many units you would leave the first time. Explain how counting will work and when you would be paid.
An organized pitch tells the owner you will be an easy supplier to deal with. Offer something concrete too: restocking on time, collecting what does not sell, or helping with the display.
How much to leave the first time
Start modestly with the amount you expect to sell in one counting cycle. For example, if you think a store sells about 10 units a month, leave 15 or 20. If everything sells quickly, restock. If not, you risked little and learned something.
Leaving a lot at once puts more of your goods out of sight and creates more differences at the first count.
Mistakes to avoid
- Delivering without a signed note.
- Counting only when something looks off.
- Accepting a commission without doing your own math.
- Leaving too much stock at once in a new store.
- Not recording payments and returns.
- Keeping everything in memory or scattered messages.
For the record-keeping side, see also consignment inventory management.
Frequently asked questions
How do I get my products into stores on consignment?
Pitch the store with your product list, retail prices and proposed commission, agree on terms in writing, and deliver with a signed note. Then count regularly and collect what sold.
What is a fair consignment commission?
It varies by product, volume and store, and it is negotiated. Work out your own cost and margin first so you know your limit.
How often should I count consigned stock?
On a fixed schedule both sides can keep. Many suppliers count weekly or monthly, depending on how fast the product sells.
What if an item is damaged in the store?
The agreement should say who bears the cost. If it does not, settle it before the next delivery.
Less paperwork, more clarity
With COMPA, suppliers register each delivery to each store, stores report counts through a simple link without creating an account, and the platform reconciles what was delivered, sold and returned, produces account statements, and records payments and replenishment. You can also look at the modules or contact us.