What Is Consignment?Posted on 07-09-2021
What is Consignment?
Consignment is a business agreement in which the business agrees to pay the seller once the item(s) sells, typically taking a small fee as a result. Most commonly, the business will take a percentage of the sale once the item sells.
This isn’t always the case, however. For example, at GR Auto Gallery, we do not take a percentage of the total sale price. Instead, we have the seller determine their ideal sale price, then we sell for above that asking price, allowing us to make the difference.
Types of Consignment
There are many types of items that are commonly sold on consignment. Some of the most common products are clothes, sports gear, antiques, classic cars, and furniture. Businesses that sell clothes through consignment, will allow the seller to list as many items as they want, and then they would take a percentage of the total sale price. There are businesses that provide vendor space, meaning that the seller sets up their own booth to showcase their items. Other businesses will take the items from the seller and do their own marketing and other means to generate revenue.
As stated previously, when sales are made through a consignment business, that business typically will take a percentage of the total sale. On top of this percentage, some businesses will charge fees for the set-up and use of their platform.
The charges vary from industry to industry. For example, a clothing consignment store may have fewer charges per item, as they are focused on selling a higher quantity of inventory. An antique furniture seller may have higher charges per item due to the fact that their volume of sales is lower in quantity.
When it comes to selling a car on consignment, the process is unique from dealer to dealer. For the sake of this article, we will explain the process that we have. For vehicle owners that are located near one of our three locations in Grand Rapids, Detroit, or Traverse City, the first step is the transportation of the car to the nearest location.
Then one of our consignment managers goes around the vehicle with the owner to ensure we have the correct information about the car. This includes a basic safety check, a list of work done to the vehicle, and license plate removal. Once this is complete, our recommended sale price is determined based on the information that was gathered.
Vehicle consignment agreement
The agreement that the owner of a car would sign has several important aspects. The first being the right for the dealer to sell the vehicle in place of the owner. Without this element, no dealer would be able to authorize the sale on their own. Having this within the agreement drastically speeds up the entire process. The agreement also allows the dealer to change the price of the vehicle to entice a sale, as long as it does not result in the seller not getting their ideal net.
It also states that the seller can not come to the business and remove their vehicle whenever they choose. It must stay at the location for the duration of the contract, in our case being 90 days. The agreement additionally allows the business to make minor repairs to the vehicle, such as minor scratch repair, without the consent of the owner. This is to speed up the process involved with storing the car. The agreement is reviewed in full with the owner of the vehicle during the consigning process.
Classic car consignment fees and Exotic car consignment
The owner then pays the consignment fee, in our case being $295, and a detailing fee (if necessary) of $189. These fees are used to cover the costs associated with giving the vehicle a full detailing, the photography required for marketing and costs that are generated from listing the car on all of our partnered websites. At GR Auto Gallery, this is the only fee we charge, instead, we make our profit from the difference between the seller's ideal sale price and the actual net revenue that is generated. An example of this is: if a seller wants to make $50,000 from their car, and we sell it for $55,000, we get to keep the difference.
Sell A Car on Consignment
At GR Auto Gallery, we know firsthand how stressful and frustrating selling a vehicle online can be. That is why we have created the consignment program as a way to remove all of the worries. Selling a vehicle on consignment with us has never been easier!
If you are located near any of our physical locations, the first step would be to stop by with the vehicle so we can begin our questionnaire process. More information about this process can be read above in our previous sections. If you are from out of town and unable to travel to one of our locations, then we would help you coordinate with a shipper to get your vehicle in our store. Once it arrives, the process begins as normal!
How much does it cost to consign a car?
At GR Auto Gallery, we charge a fee of $295 to sell a vehicle through our consignment program. This fee covers the costs of photography, digital marketing, and internal processing that are required for each vehicle!
Used car consignment
The process for consigning a used vehicle is actually the same as any other car! As previously stated, either transport or ship the vehicle to one of our locations and we will begin the process from there!
Steps to selling a car
As with anything, we recommend the first step you take when looking to sell a car through our consignment program, is to give us a call or read online about what the process involves! We want to make sure you are comfortable during your entire time of working with us. From there, the next step would be bringing your car to us for inspection, detailing if necessary, and photography for our digital marketing efforts! Once all of these steps, including some paperwork, are complete, the car is listed online and the selling process begins!
Buying A Consignment Car
Buying a consigned vehicle is actually an incredibly easy process! At GR Auto Gallery, since we are the bridge between the buyer and seller, most of the headaches of buying a car online are completely eliminated. If you see a vehicle you like, the first step is to call our office and get in touch with one of our dedicated sales team members. They will provide you any additional information you may be looking for, as well as help with anything else you may need. From there, if you are interested in the vehicle, we help you transfer the funds to our business and then get you behind the wheel! Our job is to handle the necessary paperwork so that you don’t have to.