How to

How to Build a Consignor Referral Program

Jon Staab

Nov 10, 2022

Who do you think are the most important people you work with?

Your employees are certainly high on the list, and any business partners are a given. But at the end of the day, the most crucial people you interact with on a daily basis are your consignors.

After all, they provide you with inventory and act as spokespeople for the store. Without them, you wouldn't be able to scale your business up, attract customers, or make money. So if you want to grow your business as much as possible, you have to expand your consignors' ranks.

And the most effective way to do that is through a consignor referral program.

What should your program include?

A consignor referral program is a system where businesses offer incentives to their consignors for referring new customers. When consignors feel that they are being rewarded for their referrals, they are more likely to do more business with your store and refer more new consignors.

Building a referral program isn't as simple as asking your current consignors to tell their friends about your store, though. So here, we're going to walk you through the steps involved in creating your own program that's both effective and sustainable in the long term.

Program requirements

The first order of business is to set a few requirements for consignors to participate in your program. They need to bring in a certain amount of items to consign on a regular basis---10 items a month is a good standard. This ensures that they're active and engaged with the store themselves. Letting unengaged consignors participate will affect the performance of your program, so it's best to keep them out in the first place. You should also require that consignors make a certain number of successful referrals in order to receive a commission, such as 5 per commission payout. Finally, consignors must agree that they won't be compensated until the referrals become consignors themselves.

Tracking referrals

For your program to be successful, you need to be able to track who is making referrals, how many referrals they are making, and whether or not those referrals are resulting in new customers. Without this information, you'll just be guessing and hoping for the best.

Start by setting up a referral form consignors can use when they want to make a referral. It can be either a physical form or a website form, but however you choose to set it up, it should include fields for the consignor's name and contact information, the name of the person being referred, and the date of the referral.

Setting up a website referral form will make it easier for you to collect and organize new referrals.

Next, assign a unique referral code to each of your current consignors and make sure they know what it is. When they make a referral, they'll need to pass the code along to the referred person, who will then share the code with you when they get in touch about becoming a consignor themselves. You'll use this code to verify that the original consignor made that particular referral so you can give them credit for it.

An easy way to utilize referral codes is through referral cards. Referral cards can be given to consignors after they sign up for the program and should include all of the necessary information, such as how much commission the consignor will earn, what the requirements are for participation, and the consignors' unique referral number. Consignment stores can also include other information, such as contact information or social media handles.

After that, you'll need to set up a system for recording all referral information. This will allow you to calculate consignors' commission payments and identify top performers. The simplest method is to use a spreadsheet, which can be effective for small businesses with limited numbers of consignors. However, for larger businesses, a more sophisticated software system may be necessary.

If you use a spreadsheet, include the following columns for each referral:

  • Consignor name

  • Consignor code

  • Consignor contact information

  • Date of referral

  • Name of person referred

  • Status of referral (new, in progress, won, or lost)

  • Additional notes

Be sure to update the spreadsheet on a regular basis, such as once a week or once a month, to make sure that you have accurate information at all times.

If you want to automate the process a bit more, Airtable is a great option. To use Airtable, you'll need to create a custom form that includes fields for all the above information (except "Additional notes"). This form would include fields for the consignor's name, contact information, date of referral, name of person referred, status of referral, and notes.

Once a consignor has filled out the form, you can update the "status of referral" field in Airtable as needed. You can even generate reports based on the field "Consignor name" to find out how many referrals each consignor has made and how many of each consignor's referrals became new consignors themselves.

To keep consignors updated on the status of their referrals, the simplest solution is to send out a regular monthly email to each consignor notifying them about their referrals and how much commission they've earned to-date.

Motivating consignors

Once the tracking system for your program is set up, the next step is to decide how you'll compensate consignors for each of their referrals.

The most common incentive is a monetary commission, where consignors earn a commission for each referral that results in a new consignor. A standard commission rate is 10-20% of the total first-time value of each successful referral. For example, if a consignor refers a friend who signs up for the store's consignment program and brings in $100 worth of items to consign, the referring consignor would earn a commission of $10-$20. The exact amount of commission paid out will vary from store to store.

Monetary incentives are highly effective at motivating referrals.

Non-monetary incentives, such as prizes or other recognition, are also great options. Prizes in particular are common in the industry. For example, you could offer a $100 gift card to the consignor who makes the most referrals in a month. You can also offer recognition, such as listing the names of consignors who make the most referrals on the store's website or social media pages.

Another non-commission incentive is early access to sales or new arrivals. This type of incentive is especially motivating for consignors who are avid shoppers themselves. Finally, you can offer a discount on consignment fees for consignors. This would save consignors money on the fees they pay to consign items at the store. You can even set this up as a tiered system, where consignors who make more referrals receive a bigger discount on their fees.


If you don't have a consignor referral program set up yet, you should make it a priority to build one over the next few weeks. The sooner the program is set up, the sooner you can start adding to your consignor base.

Start by outlining the most important consignor-facing details of your program:

  • Participation requirements

  • Incentives

  • Communication methods

After that, decide how you want to track all referral information and build out your system. Even if you eventually use Airtable or another software platform, it's worth starting small with a limited-participation program tracked in a spreadsheet---you gotta walk before you can run, right?

Then, start promoting your program to your target consignors. Put a sign up at your item drop-off counter, post on your social media pages, and send out an email. As the trial program picks up momentum, make adjustments as needed so your fully-fledged program runs as smoothly as possible.

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