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Buy outright or take on consignment?

Buying and consigning answer different questions. One asks what you can earn; the other asks what you can earn without spending anything. Enter the deal once to see the profit both ways, and what the outright purchase returns on the money it puts at risk.

How it works

  1. 1Enter the sale price and your buy priceWhat it should sell for, and what the owner would take to sell it to you outright.
  2. 2Enter the consignment termsYour commission, and who carries the selling costs.
  3. 3Compare profit and capitalOutright usually earns more in dollars; consignment earns it without tying up money.

Profit is only half the comparison

Buying outright almost always shows the bigger number, because you keep the spread instead of a commission. That number alone is a bad basis for the decision. The outright buy also puts your money at risk for the whole time the watch is unsold, and that money can only be in one watch at a time.

The figure that settles it is the return on the capital deployed. A smaller commission earned with none of your own money down can beat a larger profit that locks up your float for months — especially if you would have bought something else with it.

When each one is the right call

Outright tends to win where the spread is genuinely wide, the watch is liquid, and you have capital sitting idle. Consignment tends to win where the spread is thin, the piece is slow or unusual, or your money is already working. It also caps your downside: the risk of the market moving against the watch stays with the owner.

Whichever way you go, write it down. A consignment deal without a signed agreement is the most common source of disputes in this trade — the consignment agreement sets out who bears what, and taking a watch on consignment covers the practice.

Common questions

Why does the outright option get charged a holding cost?

Because it ties up your money for the time the watch is unsold, and that has a cost whether you financed it or not. Consignment does not, because the capital stays with the owner, which is the whole point of the comparison.

Who should pay the selling costs on a consignment?

It is negotiable, and the calculator shows both. If you carry them, your commission has to cover fees and shipping before it becomes profit. If the consignor carries them, their payout absorbs the cost instead.

What if the owner won't take my outright number?

Then the comparison has done its job: consignment is a way to do the deal at a price you couldn't justify owning. The question becomes whether the commission is worth the work, not whether the spread is worth the risk.

Does consignment carry no risk at all?

It carries different risk. You are responsible for a watch you don't own, which is why insurance and a written agreement matter more, not less. What you avoid is the market risk of owning it.

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