Consignment

How Fashion Consignment Works

In a consignment model, the brand or designer delivers inventory to a retailer without receiving upfront payment. The retailer displays and sells the merchandise, remitting the agreed-upon percentage to the consignor after each sale. Unsold inventory is typically returned to the consignor after a predetermined period. This model is common in emerging designer boutiques, luxury resale, and artisanal markets.

Consignment vs. Wholesale

Unlike wholesale — where the retailer purchases inventory outright and assumes full risk — consignment shifts inventory risk to the brand. This makes it attractive for retailers exploring new brands but can strain cash flow for designers who bear production costs without guaranteed sales. The model favors established retailers with strong foot traffic and proven sales capabilities.

The Luxury Resale Revolution

Consignment has been transformed by luxury resale platforms like The RealReal, Vestiaire Collective, and Rebag. These digital marketplaces have made consignment accessible and mainstream, creating a secondary market that influences primary market pricing, brand perception, and sustainability narratives across the luxury fashion ecosystem.

OSF Perspective

OSF observes that consignment is experiencing a renaissance driven by the circular economy. What was once a pragmatic arrangement for emerging designers has become a sophisticated business model that connects sustainability values with luxury consumption — and smart brands are embracing rather than resisting this evolution.

Related Terms

Wholesale  |  Circular Fashion  |  Reverse Logistics  |  Sell-Through Rate

Notable Brands

The RealReal, Vestiaire Collective, Rebag