Updated September 2026 · 6 min read
Short answer: Wholesale means a store buys your products upfront at a discount, so you get paid whether they sell or not. Consignment means the store only pays you after an item sells, usually with a bigger share of the price going to you, but you carry the risk and wait longer for cash.
If you make or sell products and you’re weighing consignment vs wholesale, the right choice depends on your cash flow, your product, and how much you trust the store. Many small brands use both: consignment to get into a shop, and wholesale once the product has proven it sells.
This guide explains how each model works, runs the numbers side by side, and gives you a checklist for either kind of deal.
How does wholesale work?
With wholesale, a retailer places an order, pays you (upfront or on payment terms), and owns the goods. The store sets the retail price, handles the display, and takes the risk if the items don’t sell.
Wholesale prices are often around half of the suggested retail price, though this varies by industry. If your product retails for $40, a store might pay about $20. Our guide on how to sell your products wholesale to stores walks through finding and pitching those accounts.
Pros and cons of wholesale
- Pro: You get paid for the full order, even if some items never sell.
- Pro: Orders are larger and easier to plan production around.
- Pro: Less paperwork after the sale. No monthly sales reports to chase.
- Con: You earn less per unit.
- Con: Stores are pickier, since they’re spending their own money.
- Con: If you offer payment terms, you may wait 30 days or more. See how to set wholesale payment terms.
How does consignment work?
With consignment, you place products in a store, but you still own them. When an item sells, the store keeps a percentage and pays you the rest, often monthly. Unsold items come back to you after an agreed period.
Splits vary, but many consignment deals give the maker 50% to 70% of the retail price. A 60/40 split (60% to you) is a common starting point.
Pros and cons of consignment
- Pro: Easier to get into a shop, since the store takes little risk.
- Pro: You often earn more per item sold.
- Pro: Good for testing new products or one-of-a-kind pieces.
- Con: You’re paid only when items sell, which slows cash flow.
- Con: You carry the risk of damage, theft, and unsold stock.
- Con: More admin: inventory lists, sales reports, pickups, and follow-ups.
What products work best on consignment?
Consignment tends to fit products that are hard for a store to judge before seeing them sell. Think original art, handmade jewelry, higher-priced home goods, and seasonal or limited runs. It works less well for low-priced items, because the admin time per sale adds up fast. If an item retails for $8, tracking and reporting each sale may not be worth it for you or the store.
Consignment vs wholesale: side-by-side comparison
| Factor | Wholesale | Consignment |
|---|---|---|
| Who owns the goods | The store, once it buys | You, until the item sells |
| When you get paid | Upfront or on terms (for example, net 30) | After each item sells, often monthly |
| Typical share of retail price | Often about 50% | Often 50% to 70% |
| Risk of unsold stock | Store’s | Yours |
| Risk of damage or theft | Store’s | Usually yours, unless the contract says otherwise |
| Who sets the retail price | Usually the store (you may suggest one) | Usually agreed together |
| Paperwork | Invoice and purchase order | Contract, inventory list, sales reports |
| Best for | Proven, repeatable products | New, high-priced, or one-of-a-kind items |
Which pays more? Run the numbers
Consignment looks better per item, but only if enough items sell. Here’s a simple way to compare.
Break-even sell-through = wholesale price ÷ your consignment payout per item
Example: Your candle retails for $40. Wholesale price: $20. Consignment split: 60% to you, so $24 per sale. You place 24 candles either way.
Wholesale: 24 × $20 = $480, paid for the whole order.
Consignment: $20 ÷ $24 = 0.83, so you need to sell 83% (20 of 24 candles) to match wholesale. If 15 sell, you earn 15 × $24 = $360 and get 9 back.
If you expect high sell-through and you have the cash to wait, consignment can pay more. If sell-through is uncertain or you need cash now, wholesale usually wins. Don’t forget the value of your returned stock, and the cost of any items that come back damaged.
50%
Common wholesale price as a share of retail (varies by industry)
60/40
Common starting consignment split in the maker’s favor
83%
Sell-through needed to match wholesale in our example
How do you choose between consignment and wholesale?
At a glance: Choosing your model
1
Check your cash. If you need money to fund the next batch, lean toward wholesale.
2
Look at your product. One-of-a-kind or high-priced items often fit consignment.
3
Vet the store. Only consign with shops you trust to track and pay reliably.
4
Review after 90 days. Move strong consignment sellers to wholesale orders.
A common path is to start with consignment in a new shop, prove the product sells, then ask the owner to switch to wholesale for reorders. Having a clear wholesale price list ready makes that conversation easy.
What should a consignment agreement include?
Always get consignment terms in writing, even with a friendly local shop. This is general information, not legal advice. Have a lawyer review any agreement you’re unsure about.
Checklist: Consignment agreement terms
- ✅ The split (percentage to you and to the store)
- ✅ Retail price for each item and who can change it or run discounts
- ✅ How often you’re paid and how sales are reported
- ✅ How long items stay before you pick them up or they’re returned
- ✅ Who pays if items are damaged, lost, or stolen
- ✅ Whether the store insures consigned goods
- ✅ An itemized inventory list signed by both sides
- ✅ What happens to your goods if the store closes or changes owners
Protecting your goods if a store closes
This one matters more than most people realize. Under the Uniform Commercial Code (the set of business laws most states have adopted), consigned goods held by a store can, in some cases, be claimed by the store’s creditors if the store fails. Some consignors protect themselves by filing a UCC financing statement with the state. The rules are technical, so ask a business attorney if you’re consigning a lot of inventory with one store.
Taxes and bookkeeping
Consigned items stay in your inventory until they sell, so track them carefully. The store usually handles sales tax on the retail sale, but rules vary by state. Check with your state tax department or an accountant.
FAQ
Is consignment or wholesale better for handmade products?
Consignment is often easier for new makers or one-of-a-kind pieces. Wholesale is usually better once you can make the same product consistently and want steady orders.
What is a typical consignment split vs a wholesale discount?
Consignment often pays the maker 50% to 70% of retail after the sale. Wholesale often pays around 50% of retail upfront. Both vary by store and industry.
Can I do consignment and wholesale with the same store?
Yes. Some shops buy proven items wholesale and take new items on consignment as a trial. Just keep separate records for each.
How do I get paid on consignment?
Most stores pay monthly with a sales report. Your agreement should set the pay date and how you can check inventory.
Bottom line
In the consignment vs wholesale decision, wholesale gives you guaranteed cash and less work, while consignment can pay more per item but puts the risk on you. Use consignment to test new products or hard-to-place items, and move to wholesale once they sell. Whichever you pick, get the terms in writing.
Wholesale Handbook 
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