How consignor payouts work
Every sale of a consigned item posts a ledger entry at the split that was attached to that item when it came in. Balances accumulate per consignor, payout runs settle them for a period, and each consignor gets a statement that reconciles line by line.
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The ledger is the whole idea
Consignment accounting goes wrong in spreadsheets because the spreadsheet is a summary rather than a record. Somebody types a total, and when a consignor questions it three weeks later there is no way to reconstruct how it was reached.
A ledger inverts that. Each sale creates an entry: which item, which sale, what price it actually sold for, what split applied, what the consignor is owed. The balance is derived from the entries rather than typed. That means every number is explainable, which is what makes a disagreement a five-minute conversation instead of an argument.
The split is stamped at intake
This is the detail that prevents the most common consignment dispute. The split is attached to the item when it is received, not looked up at the moment of sale.
So if you renegotiate a consignor's terms in March, items they dropped off in January still pay out at January's terms. That is both fairer and easier to defend than a system where changing a rate silently rewrites what you owe on inventory already in your shop.
What affects the payout amount
| Event | Effect on the consignor's entry |
|---|---|
| Sold at tag price | Split applied to the tag price |
| Sold with a discount | Split applied to the actual sale price, not the tag price |
| Sold online with marketplace fees | Fees handled per your agreement; the ledger records the basis used |
| Returned by the buyer | The entry is reversed so a returned sale is not paid out |
| Item marked down after a period | Split applies to the marked-down price at the time of sale |
The discount case is where spreadsheets most often produce the wrong number, because the tag price is what got written down and the sale price is what actually happened.
Running a payout
- 1
Choose the period
Monthly is typical. The period defines which ledger entries are included.
- 2
Review balances
Each consignor's total for the period, with entries visible underneath rather than rolled into a single figure.
- 3
Apply any adjustments
Fees, holds, or corrections. Adjustments are entries too, so they are explainable later.
- 4
Pay and record
Record how each consignor was paid. The balance clears and the entries are marked settled.
- 5
Send statements
Each consignor receives a statement covering the items that sold, what they sold for, and what they are owed.
Consignor visibility
Consignors can see their own items, what has sold, and their current balance. For most consignment stores this is the single largest reduction in office workload from switching systems — the recurring phone call asking whether anything sold this week simply stops.
Frequently asked questions
How are marketplace fees handled on a consigned item?
That depends on your consignor agreement, which is why the ledger records the basis used. Some stores split gross and absorb the fees; some split net of fees. Whichever you choose, be explicit about it in the contract — this is the single most common source of consignor disputes on online sales.
What happens to a payout if the buyer returns the item?
The ledger entry is reversed. If the payout has already been made, the reversal shows as a negative entry against the consignor's next period rather than being quietly ignored.
Can I pay consignors in store credit?
Record the payout method that matches your arrangement. What the ledger guarantees is that the amount owed is correct and traceable; how you settle it is your store's policy.
Can consignors have different periods?
Payout runs are per period, and you choose the period. Most stores standardise on one cycle because varying it per consignor multiplies the admin without much benefit.
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