What is a tiered consignor split?
A tiered consignor split is a consignor split structure where the percentage a consignor earns changes based on the sale price of an item.
Instead of a single flat rate across all inventory, the split changes at defined price thresholds rewarding consignors with a higher cut on more valuable items.
How does a tiered consignor split work?
The store sets price brackets in advance. When an item sells, the consignor earns the percentage that corresponds to that item's sale price after discounts.
Sale Price | Consignor Earns | Store Earns |
|---|---|---|
$0–$25 | 40% | 60% |
$26–$75 | 50% | 50% |
$76+ | 60% | 40% |
The brackets and percentages are entirely up to the store. Some shops use two tiers; some use four or more. What matters is that the thresholds are clearly defined and disclosed in the consignor agreement before anything goes on the floor.
Why use a tiered consignor split?
The main appeal is that it attracts better inventory. Consignors bringing in higher-value items — designer pieces, quality furniture, collectibles — are often more selective about where they consign. Offering a better rate on those items makes your store more competitive for that inventory without giving away margin on everyday, low-ticket goods.
It also aligns incentives: consignors are more motivated to bring in higher-ticket items when they know they'll be put in a better earning bracket.
Common tiered consignor split mistakes
Making the tiers too complicated — more than three or four brackets creates confusion at intake and at payout.
Setting thresholds that don't match your inventory — if most of what you sell falls in the bottom tier, the structure isn't doing much. Calibrate brackets to reflect your actual price distribution.
Not putting it in writing — a tiered structure has more moving parts than a flat split, which means more room for disputes. Every tier needs to be spelled out in your consignor agreement, not explained verbally at drop-off.