Resale vs Consignment: What's the Difference?

Resale and consignment are often used interchangeably, but they describe different things. Resale is the broad category of selling previously owned goods. Consignment is one specific way to do it, where the seller never takes ownership of the item and instead sells it on the owner's behalf for a fee.

In a straight resale model, a business buys inventory outright and resells it for a margin, carrying the risk that it may not sell. In consignment, the operator holds the item but the owner keeps the risk until it sells, and the operator earns only a commission. The difference decides who is exposed if goods sit unsold.

Most large fashion resale platforms sit somewhere between the two. Peer-to-peer marketplaces are pure resale infrastructure that never touch the goods. Managed resale operators run consignment at scale. Some blend both to balance supply quality against capital risk.

For anyone evaluating a resale business, the question is who owns the inventory and who carries the risk of it not selling. That single answer explains most of the differences in margin, scale, and capital needs.