A Guide to Auction Consignment Companies

A Guide to Auction Consignment Companies

You might be wondering - what is an auction consignment company?

An auction consignment company is a business established to help individuals, or other businesses, to sell items via auction. Auction consignment companies acts as a third party in the selling process, and therefore take a portion of the auction proceeds.

The role of an auction consignment company is to ensure the sale of goods at auction. Typically, these businesses will have a reputation that allows them to attract a wide range of buyers, increasing the chance of selling any items provided to them through consignment. This is why many individuals and businesses choose auction consignment companies, they provide a simple selling process and usually charge only a small commission on each item sold.

Technology has paved the way for different types of auctions. As well as physical, in-person auctions, there are now many opportunities to engage in digital auctions from the comfort of your own home. Whether you choose to consign your items to a physical or a digital auction company is your choice, there are advantages to both. For example, physical auctions allow buyers to see the items for auction in their physical state and better assess their quality, whereas digital auctions can attract more buyers due to the wider accessibility of them.

There are even options available to those who wish to conduct their own auctions. Paybee, an all-in-one fundraising platform, offers users the tools required to host in-person, hybrid, and digital auctions.

In the remainder of this article, we will continue to explore the world of auction consignment companies. We'll cover the auction consignment process, the benefits of using an auction consignment company and how to choose the right one for you, frequently asked questions, and more! By the end of this guide, you'll be able to engage with auction consignment companies with confidence, knowing that your items are in good hands.

Understanding the Auction Consignment Process

While the auction consignment process is easy to understand, there are some steps involved that might not be obvious to individuals without familiarity of the auction industry. Below is a step-by-step breakdown of the auction consignment process that'll take you all the way from choosing an auction consignment company to post-sale procedures:

  1. Choosing an Auction Consignment Company: Before deciding on an auction consignment company, it's important to conduct thorough research. Reputation and sales history will vary between auction houses. You may even have items that a certain auction consignment company specializes in. Once you have researched your options thoroughly, you can make an informed choice.
  2. Contact, Evaluation, and Appraisal: Having chosen an auction consignment company, you can contact them with details of the items that you wish to sell. The auction consignment company will evaluate and appraise your items prior to auction.
  3. Consignment Agreement: Following appraisal, the auction house will provide you with a consignment agreement. This document will outline the details of the consignment, including the auction house's commission rates and reserve prices.
  4. Organization of Items: Once you have agreed to the terms of the consignment agreement, your items will need to be organized. They'll have to be packaged and mailed to the auction house. Following the auction consignment company's receipt of your items, they will begin to photograph and catalog them. With your items organized, the marketing process can begin.
  5. Item Viewing: Through the marketing efforts of the auction consignment company, interest will grow in your items. Eventually, the auction house will allow potential buyers to view your items before they are made available via auction. This will help to garner further interest and increase the chances of your consigned items being sold.
  6. Time for Auction: At this point, most of the process has been completed. Your items have been appraised, mailed to the auction house, cataloged, shown to potential buyers, and now must be put up for auction. On the day of the auction, your items will be available to buyers and the bidding process will continue until your each of your items is sold to the highest bidder.
  7. Post-Sale Procedures: Following the conclusion of the auction, the auction consignment company will issue you a document. This document will contain relevant information, such as the final sale price of your items and the total commission owed to the auction consignment company. Typically, auction consignment companies will send you a payment for your sold items within a few days of the auction.
  8. Unsold Items: It's possible that some of your items won't sell at auction. This happens when no bids are placed on an item or the reserve price isn't met. When one, or more, of your items goes unsold, you have a few options. The item(s) can be reconsigned, returned to you, or the auction house can help to dispose of them through other means. If you choose the alternative method of disposal, the auction consignment company will likely donate your items to charity.

Benefits of Using Auction Consignment Companies

Now that you understand the process of using an auction consignment company, you might be wondering what the benefits are of doing so. There are many advantages to distributing items to an auction consignment company, the following are some examples:

  • Ease of Sale

Auction consignment companies make the selling process quick and efficient. They remove the aspects of selling that are time consuming, such as cataloging, marketing, negotiation, and distribution. Using an auction consignment company will save you, or your business, plenty of time that can be spent on more pressing matters.

  • Trustworthy Reputation

Auction houses have established reputations based on trust. They have made many sales and completed them with integrity. When compared to other sales platforms, like Facebook Marketplace and Craigslist, where two individuals conduct a transaction as strangers, auction consignment companies have the upper hand.

  • Base of Buyers

Auction houses have a base of buyers that frequent auctions looking for deals and specialist items. This means that when you consign your items, they are guaranteed to be placed in front of potential buyers. Other selling methods might not offer the same amount of exposure as an auction consignment company.

  • Reduced Risk Through Insurance

As part of the commission paid to an auction consignment company, they will typically offer insurance on your items. In the unfortunate event that an item of yours is damaged, lost, or stolen, its appraised value will be paid out in full. The insurance offered by auction consignment companies helps to reduce the seller's exposure to risk, resulting in a safer selling experience.

  • Higher Price Potential

Due to the competitive nature of an auction, where individuals compete against one another to become the highest bidder, item prices can quickly rise. Often, this will lead to bids exceeding the value of an item, meaning that the seller is able to make more from an item than if sold via an alternative channel.

  • Availability of Expertise

Auction consignment companies offer expertise in two regards. Firstly, they are experts in conducting auctions and attracting buyers, which increases the chances of a sale. Secondly, auction houses generally have in-house experts that will have an understanding of the items that you are consigning, which helps to assign a fair value to them.

  • Optimized Pricing

As mentioned in the last point, auction houses typically have in-house experts that will have a deep understanding of the items that you are selling. This knowledge allows auction consignment companies to assign a fair value to your items and results in optimized pricing. There are countless examples of individuals undervaluing their items and losing out on extra funds, which can be avoided through the use of an auction consignment company.

  • Marketing

As part of the commission paid to an auction consignment company, they will market your items to potential buyers. This begins before the auction takes place, meaning that there is a level of anticipation for your consigned items. If you have something for sale that is of particular significance, this marketing can lead to a bidding war, which will drive the price of your item up.

  • Professional Handling

Auction consignment companies have the resources available to professionally handle your items. They have the equipment to take high-quality photographs, a marketing team, cataloging capabilities, and established logistics. Consigning your items ensures that sales will be made professionally and efficiently, which can be difficult to achieve as an individual seller or via alternative channels of sale.

While there are many benefits to using an auction consignment company, it's important to remember the alternatives. Nonprofit organizations are recommended platforms like Paybee, which help to make the auction process simple through their digital tools. If you'd prefer to have more control over the sale of your items and avoid paying commission to an auction house, Paybee is the ideal all-in-one fundraising solution to achieve this.

How to Choose the Perfect Auction Consignment Company

It's important to be careful when choosing an auction consignment company, they aren't all equal in their offerings. Your choice should hinge on specifics, such as the types of items that you have for sale, the services offered by an auction consignment company, and the fees involved with the sale. Here is a short guide to choosing the perfect auction consignment company:

  • Credibility Check

You should be sure that your auction consignment company of choice is credible and trustworthy. Study their online presence, look for reviews, and search for feedback and references. If, after these checks, the auction consignment company appears legitimate, then it should be considered a credible choice.

  • Comparison of Fees

Each individual auction consignment company will have different fees associated with the sale of items. These fees might come in the form of a percentage of the total sale price or a flat rate. It's important to compare fees between different auction houses to find one that aligns with your expectations.

  • Item Specialization

When searching for an auction consignment company, account for the type of items that you are looking to sell. Certain auction houses will specialize in specific types of items. For example, if you have a collection of signed baseball jerseys to sell, you should seek an auction consignment company that specializes in the sale of sports memorabilia.

  • Industry Reputation

What is the reputation of your chosen auction consignment company in the auction industry? This is an important consideration to make when choosing an appropriate auction house. You should seek a well-known name that has a track record of success in the auction sphere. There is a greater risk associated with choosing auction houses that have a poor or unknown reputation.

  • Insurance Options

Read up on the insurance policy offered by your chosen auction consignment company. Many will guarantee the value of your items against loss, damage, or theft, and this service should be included in the commission agreement. Selecting an auction consignment company with a robust insurance policy can protect you against undesired losses.

  • Market Reach

Larger auction consignment companies tend to have access to a wider market. The more eyes you can get on your items during auction, the better. Be sure to choose an auction house that consistently draws in a large number of potential bidders. This will help to ensure that your items are sold at, or above, their market value.

  • References

Whether you are selling as an individual or a business, it's a fantastic idea to seek references. If you know other individuals or businesses that have sold with auction consignment companies in the past, they may be able to make a recommendation for you based on their experience.

  • Marketing Ability

Assess the ability of your options to market your items. Marketing is an important step in the process of an auction, it helps to create anticipation for your items and bring in potential buyers. An auction consignment company with a strong marketing team will increase the chances of a sale and offer the potential for your item to sell for more than its value via a bidding war.

Navigating the Legal Aspects of the Consignment Auction Business

The consignment auction industry is stringently regulated and has many associated laws. As an individual or business, it's crucial to adhere to these regulations in order to ensure a smooth auction experience.


Contracts are to be expected when using an auction consignment company. They are used to outline the terms and conditions associated with selling items via consignment auction. Be sure to read them carefully before signing, it's the responsibility of both parties to make sure that contracts are fair and clearly represent the prerequisites of the consignment agreement.

A consignment contract is likely to reference the following terms:

  • Commission and Fees: The associated commission and fees of selling items via consignment. This is the portion of the final sale price that will be owed to the auction house.
  • Insurance Coverage: Details of the insurance coverage provided to protect your items against loss, damage, or theft.
  • Reserve Price: Items are often given a reserve price, which is a minimum value that the auction house would like to meet before the item can be sold.

Before agreeing to the terms of a consignment agreement, read it carefully and ensure that it aligns with your preferences. As mentioned earlier, contracts are in place to protect the auction consignment company and the seller, meaning that you have a duty to scrutinize them.

Consumer Law

Consumer law is enacted by the Consumer Protection and Antitrust Unit, an organization that aims to minimize fraud, deception, misrepresentation, and dishonesty regarding the sale or advertisement of goods and services. Since auction consignment involves the sale of goods, consumer law must be adhered to. Therefore, individuals and businesses engaging in auction consignment must be sure to provide accurate details and descriptions of all the items that they wish to consign. Auction consignment companies have the responsibility of marketing your items truthfully. When both parties follow consumer law, the auction consignment process is hiccup free.

Common Legal Pitfalls

In the realm of consignment auctions, there are two common legal pitfalls: payment resolution and ownership of consigned items. Here's how to avoid these legal pitfalls:

  1. Payment Resolution

This pitfall involves missing the deadline, outlined in the consignment agreement, for payment resolution. To avoid this, you should read the contract carefully and make note of the payment resolution deadline. Make sure to issue the payment before this date.

  1. Ownership of Consigned Items

You must be able to prove ownership of consigned items. If not, the auction house may choose to refuse your consignment in order to avoid breaking laws regarding the sale of stolen goods. When consigning items, especially those of significance or great value, be sure to provide proof of ownership. This can be achieved by issuing titles, receipts, bank statements, and online registrations.


Q: What are the typical fees associated with using an auction consignment company?

A: Auction consignment companies typically receive a portion of the total sale of your items as a fee. Depending on the auction house that you select, it may be a percentage of the total sale or a flat rate determined prior to the auction. It's important to assess fees beforehand and thoroughly compare your options to find the most cost-effective choice.

Q: Can I withdraw my items from consignment if I change my mind before the auction?

A: Yes, generally you will be able to withdraw your items from consignment if you wish. However, this is likely to be accompanied by a withdrawal fee. Information relating to the withdrawal fee will be outlined in the consignment agreement.

Q: What happens if my consigned items do not sell at the auction?

A: Typically, you'll have three options if your consigned items don't sell. Option one is to have your consigned items returned, option two is to reconsign your items for a future auction, and option three is to have the auction consignment company dispose of your consigned items through an alternative channel. Usually, when option three is taken, the auction house will donate your unsold items to charity.

Q: What are the best practices for packaging and shipping items to an auction consignment company?

A: Consigned items should be packaged securely and shipped using a timely method. If your items are of high value or fragile, it's a good idea to insure your package. Bubble wrap can be used to protect items during transit and be sure to double-check the auction house address to ensure that the package is heading to the right place.


To conclude, we'll summarize the key points discussed in this article:

  • Auction Consignment Process: The auction consignment process begins with the selection of an auction consignment company. Once chosen, you'll sign a consignment agreement and send your items for appraisal. Next comes auction day, during which your items will be sold to the highest bidder. Following the auction, you'll have to settle payments and make decisions on items that didn't sell.
  • Benefits of Auction Consignment: There are many benefits to using an auction consignment company including ease of sale, higher price potential, professional handling, expertise, and much more!
  • Choosing the Perfect Auction Consignment Company: Selecting an auction consignment company is a process that should be approached with care. Consider aspects such as credibility, fees, insurance options, reputation, and market reach. Be sure to compare your options against one another to make a choice that aligns with your preferences.
  • Legal Considerations: It's crucial to adhere to laws regarding auction consignment. Ensure that contracts are thoroughly checked, be mindful of consumer law, and avoid payment resolution and item ownership pitfalls.

The future of consignment auctions is strongly influenced by technology. As time goes by, digital, and hybrid, auctions are becoming more and more popular. The advantages of incorporating tech into the consignment auction landscape are huge! A pioneer of this technological revolution is Paybee, an all-in-one fundraising platform that offers seamless auction capabilities. Paybee is an excellent option for individuals and businesses that would like to cut out the middle man while receiving a helping hand with the auction process.

Now that you have a comprehensive understanding of auction consignment companies and their role in the world of auctions, you can approach the topic with self-assurance. Always consider your options when choosing an auction house and remember to adhere to legal guidelines. Good luck!

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Benjamin Mcquaid

Hello! I am Benjamin, a freelance writer from the United Kingdom. I have had a passion for writing since my highschool days and love to research and produce content on any topic. For enquiries, contact me via email: benjaminmcquaid5@gmail.com.

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