Should a Jewelry Store Consider Consigning Jewelry?

Consignment arrangements have gained popularity across various industries as a means of mutually benefiting both sellers and retailers. When it comes to the jewelry sector, the decision to consign jewelry is a nuanced one, with potential advantages and challenges to consider. In this article, we’ll delve into the factors jewelry store owners should contemplate when deciding whether to embrace consignment as a part of their business strategy.


Pros of Consigning Jewelry

1. Diverse Inventory: Consigning jewelry allows a store to diversify its inventory without investing upfront in purchasing the items. This diversity can attract a broader range of customers, catering to varying tastes and preferences.

2. Reduced Financial Risk: By not purchasing the consigned pieces upfront, the jewelry store minimizes its financial risk. This can be particularly beneficial for small businesses with limited capital or those looking to experiment with new styles.

3. Attracting Unique Pieces: Consignment can bring in unique and rare pieces that might not otherwise be available in the store’s regular inventory. This exclusivity can attract collectors and enthusiasts seeking one-of-a-kind items.

4. Expanded Customer Base: Consigning jewelry from local artisans or emerging designers can attract their existing customer base to the store, introducing a new demographic to the business.

5. Boosted Cash Flow: Since payment to consignors typically occurs after the jewelry is sold, consignment can help improve cash flow by allowing the store to sell items before having to pay for them.

Cons of Consigning Jewelry

1. Inventory Management Complexity: Managing both owned and consigned inventory can be challenging. Tracking consigned pieces, ensuring their security, and coordinating with multiple consignors require careful organization. An inventory management system built for jewelry, like Clarity, can help keep track of consignment pieces to make sure things don’t get mixed up.

2. Reduced Profit Margins: The consignment model often involves sharing a portion of the sales proceeds with the consignor. This can reduce the store’s profit margins compared to selling items from its own inventory.

3. Risk of Unsold Inventory: If consigned jewelry doesn’t sell within a certain timeframe, it might need to be returned to the consignor, leading to potential disappointment and extra administrative work.

4. Quality Control Challenges: Maintaining quality standards for consigned jewelry can be difficult, as the store might not have direct control over the manufacturing or sourcing processes.

5. Legal and Contractual Considerations: Consignment agreements necessitate careful legal documentation and clear terms to protect both the store and the consignor.

Key Considerations for Jewelry Store Owners

1. Business Strategy: Consigning jewelry should align with the overall business strategy. Is the goal to offer a wider variety of options, attract specific clientele, or experiment with new designs?

2. Customer Base: Understanding your customer base is vital. Will consigned pieces resonate with your existing clientele, or will they attract a new segment of customers?

3. Profit Margins: Evaluate the potential profit margins and compare them to the benefits of a diverse inventory and reduced financial risk.

4. Consignment Terms: Carefully craft consignment agreements that outline terms, responsibilities, commission rates, return policies, and timeframes.

5. Inventory Management Systems: Ensure your inventory management systems are capable of handling both owned and consigned inventory effectively. Clarity handles this with ease.


The decision to consign jewelry is not one to be taken lightly. While it offers advantages such as diversification, reduced financial risk, and access to unique pieces, it also presents challenges like inventory management complexity and potential profit margin reduction. Jewelry store owners must carefully assess their business goals, customer base, and willingness to navigate the intricacies of consignment agreements. When executed thoughtfully and strategically, consigning jewelry can be a valuable addition to a jewelry store’s business model.

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