Running a consignment store on Shopify means selling goods you do not own and paying the supplier after they sell. Practically, that comes down to four things: a vendor record with real payment details, products attributed to the right vendor, a commission agreement that says what it applies to, and a payout run on a published schedule. This covers the order to do them in and the decisions that are annoying to change later.
Before the store: the agreement
The paperwork is not the interesting part, and skipping it is what produces the arguments. Four things belong in writing before you take a single item.
- The commission rate, and what it applies to. "60% of the discounted item price, excluding shipping and tax" is a sentence. "60/40 split" is not.
- Who bears discounts. If you run a store-wide sale, does the vendor share it? Both answers are fine. Silence is not.
- The payout schedule. Frequency, arrears, minimum threshold. Published, so nobody has to ask.
- What happens to unsold stock. Returned after how long, at whose cost, and who bears loss or damage while you hold it.
The last one is the one people forget, and it is the one that gets emotional. An item sitting unsold for eight months is occupying space you could be earning from, and a vendor who has forgotten they left it with you will be surprised by a collection request.
Structuring vendors
Shopify gives you a vendor field on the product. That is your hook, and it is free text, which means it drifts — "Jane Ceramics" and "Jane's Ceramics" become two vendors in any report that groups by it.
Two decisions to make now:
Is the vendor field the record, or a pointer to one? A display name is fine on the storefront. A payout needs a legal entity, bank details, a VAT number if applicable, and an address. Keep the real record somewhere it belongs and treat the Shopify field as a key.
One vendor per product. Always, in practice. An item supplied by two people is two SKUs. Splitting one product's revenue creates reconciliation work at every stage and rarely matches what the agreement says.
Then remove the commonest error at the source: products saved without a vendor. They sell, and they earn nobody anything until a vendor notices a missing sale. Automatic product-to-vendor linking handles this by rule rather than by discipline.
Getting stock in
Consignment intake is a real operational step and most stores underestimate it.
Each item needs: a SKU that you control, a vendor, an agreed price, the intake date, and a photograph. The intake date matters more than it looks — it drives the unsold-stock clause, and without it the eight-month conversation has no evidence.
Two practical notes:
- Do not let vendors set prices directly. They will price optimistically, and you carry the cost of unsold stock in floor space. Agree prices at intake.
- Photograph at intake, not later. Consignment items are often one of a kind, and a photo taken after it sells is no photo at all.
If you accept a wide range of one-off items, this is where most of your labour goes. Systems help with the payouts, not with the photography.
Pricing, discounts and who pays for them
Discounting consigned goods is different from discounting your own, because you are giving away someone else's margin as well as your own.
Three workable approaches:
- Vendor absorbs proportionally. Commission applies to the discounted price. Simple, and vendors should know before the first sale.
- Store absorbs. Commission applies to the original price. Clean for vendors, expensive for you, and it makes store-wide sales painful.
- Exclude consigned goods from promotions. Avoids the question, complicates merchandising.
Most stores end up on the first, with a clause saying discounts beyond some threshold need the vendor's agreement. That protects a maker from waking up to find their work in a 50% clearance.
The payout run
Three variables, and they interact more than they look like they do.
Frequency. Monthly suits most consignment stores — enough volume to be worth processing, and it matches how small vendors think about income.
Arrears. How long after the period closes you pay. This is your returns buffer, and skipping it is what produces the clawback conversation described in refunds break vendor payouts. Thirty days is common because it matches most returns windows.
Threshold. A £4 balance should not trigger a transfer. Carry it forward — and say so, or the missing payment looks like an error.
Publish all three. "Monthly, 30 days in arrears, £25 minimum" answers most of what a vendor would otherwise email about, and vendor questions are the real cost of running consignment at scale.
Unsold stock, and the conversation nobody schedules
Consignment accumulates. Items that have not sold occupy space you could be earning from, and every one of them belongs to somebody who has stopped thinking about it.
The clause that prevents this is short: after N days, unsold items are returned to the vendor at their cost, or the price is reduced by agreement, or ownership transfers to the store. Ninety or one hundred and twenty days are common. Which of the three applies should be the vendor's choice, made at intake rather than negotiated later.
Two things make it workable:
- The intake date on every item. Without it the clause is unenforceable, because nobody can say how long anything has been there.
- A reminder before the deadline, not after. A vendor contacted at day 75 about items approaching day 90 has time to decide. One contacted at day 95 feels ambushed.
A markdown schedule is the gentler version — automatic price reductions at 60 and 90 days, agreed up front, so slow stock clears without anyone having a conversation about it. It works well for standardised goods and badly for one-off pieces where the maker has a price in mind.
Statements and access
A payout without a statement is a number in a bank account the vendor has to take on trust.
A statement needs line-level orders, the rate applied to each, refunds as their own lines referencing the original order, the period covered, and any carried balance. Get that right and most support questions stop, because the answer is already in front of them.
A portal goes further by answering the question vendors actually ask, which is about this month rather than last. It also removes the temptation to hand out Shopify admin access — which is how vendors end up seeing each other's numbers and your customer data. Giving vendors their own portal covers how to scope one.
What to get right in the first month
- Agreement signed, with the commission base and the unsold-stock clause in it.
- Vendor records created with real payment identities.
- Automatic vendor linking on, so no product can be orphaned.
- Commission rules set — flat percentage unless something genuinely differs.
- Schedule published to vendors.
- One period run in parallel with a spreadsheet, and the two reconciled before trusting either.
That last step is worth the effort. It catches the things nobody anticipates — an unassigned product, an order split across two vendors, a rate that was changed mid-month — while the volume is still small enough to check by hand.
Payvenda covers five vendors and twenty synced orders a month on the free plan, which is enough to run that parallel period properly.
Where to go next
Start with the agreement and the vendor records; everything downstream depends on both. The mechanics of commission are in tracking vendor commission accurately, and the full picture — cadence, statements, reporting — in the consignment and vendor payouts guide.
