How to Consign Items at Auction: A Step-by-Step Seller's Guide
A seller's plain-English guide to consigning items at auction — valuations, contracts, reserves, fees, and what happens when the hammer falls.
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To consign items at auction you sign a consignment agreement with an auction house, hand over your property for valuation, photography and cataloguing, agree a reserve price and seller's commission (typically 10–25%), and receive payment 30–45 days after the sale settles. The house earns its commission only if the lot sells; if it doesn't, you collect the property back or accept an after-sale offer.
If you've inherited a collection, are downsizing, or have a single high-value object — a watch, a piece of art, a diamond ring, a piano — consigning to an auction house is usually the highest-yielding way to convert it to cash without doing the buyer-finding work yourself. This guide walks through the entire process from first phone call to final wire, with the contract terms that actually matter, the fees that surprise people, and what happens when a lot fails to sell.
What "consignment" means at auction
A consignment is a contract under which you (the consignor) transfer physical possession of property to an auction house so they can sell it on your behalf. You retain legal title until the moment of sale; the house acts as your agent, takes a commission from the proceeds, and remits the balance to you. You are not selling to the auction house — they are selling for you.
This matters because it shapes the economics. The house only gets paid if the lot sells, so they have a real incentive to estimate accurately, price the reserve sensibly, and market the lot to the right buyers. Their commission and your reserve are the two numbers that drive the entire negotiation.
Auction vs. dealer vs. private treaty
You have three realistic options for selling a high-value object:
Channel
Typical net yield
Speed
Effort
Best for
Auction consignment
70–90% of hammer
60–120 days
Low
Items with comp data and broad demand
Dealer outright sale
50–70% of retail
Days
Low
Speed, certainty, no exposure
Private treaty / broker
70–85% of negotiated price
30–180 days
Medium
Truly unique objects, discreet sales
Auction usually wins on net yield for objects where there is genuine competition between two or more bidders. It loses when the object is so niche there's only one realistic buyer — in that case a dealer or broker who already knows that buyer is faster.
Not every auction house can sell every object well. A small regional auctioneer is the wrong venue for a $300,000 Patek; a major international house is a poor fit for a single piece of estate furniture worth $4,000. The mismatch costs you money in two ways: weak buyer attendance, and a commission structure built around a different price point.
What to look for
Specialism that matches your object. A house that runs four watches sales a year will sell a Submariner better than a generalist who slots it into a "Decorative Arts" auction.
Past sale prices for comparable lots. Every credible house publishes results. Check what equivalent items have actually hammered at — not estimates, hammers — over the last 12–24 months.
Geographic buyer pool. Some categories sell better in specific cities — Asian art in Hong Kong, contemporary watches in Geneva, mid-century design in Copenhagen, Western Americana in Texas.
Reputation for paying consignors on time. Industry chatter and consignor reviews matter. A house that takes 90+ days to remit, or makes you chase, is a red flag.
How many houses to approach
For an object you think is worth more than about $25,000, get three competing offers. Send the same photos and provenance to three houses, ask each for their estimate range, proposed reserve, commission, and any fees. The differences will surprise you — estimates can vary by 50%+ on the same object, and commission rates flex more than published rate cards suggest.
Step 2 — Get a valuation
Before any contract gets signed, the house gives you an estimate — a low and high figure representing what they expect the object to sell for at hammer. This is not an appraisal for insurance or tax (those are different documents with different methodology); it's a sale-price prediction.
How specialists value a lot
A specialist looks at four things, in this order:
Auction comparables. What have similar objects sold for at auction in the last 1–3 years? This is what databases like Artnet, AskArt, Heritage's archive, and the houses' own sale histories exist for.
Condition. A clean, unrestored, original-paint, original-dial, all-paperwork example sells at the top of the range. Restoration, replaced parts, missing accessories all knock figures down.
Provenance. Documented ownership history — who has owned the piece, especially if there is a famous prior owner — creates a premium. A signed letter from the original artist, the maker's box and papers, an exhibition record, all matter.
Market timing. Some categories are hot (jewelry +68% online H1 2025; vintage Rolex sport models held strong through 2024–25); others are soft (brown furniture, mid-tier 19th-century academic painting). A specialist who knows the cycle will be honest about whether to sell now or hold.
The estimate range
A good estimate is realistic, not flattering. If a specialist gives you a number that's 30% above what comparable lots have actually fetched, they are either inexperienced or fishing for the consignment by overpromising. Either way it ends in disappointment when the lot bought-in (failed to sell) or sells at the low estimate.
A useful test: ask the specialist to email you the three comparable lot sales they used to triangulate the estimate. A confident specialist sends them within an hour. An evasive one stalls.
Step 3 — Negotiate the contract
The consignment agreement is the document everything else flows from. It runs typically 4–10 pages. Read all of it. The terms that materially affect your payout are:
Seller's commission
The percentage the house deducts from the hammer price before paying you. Industry norms in 2026:
Lot value
Boutique / regional
Mid-market
Major international
Under $25k
15–25%
12–20%
12–20%
$25k–$250k
10–18%
8–15%
5–12%
$250k–$1M
5–12%
3–10%
0–8%
Above $1M
0–8%
0–5%
0% (often 0% with seller's premium share)
Above ~$1M the major houses routinely waive seller's commission entirely and sometimes pay you a share of the buyer's premium ("enhanced hammer"). This is negotiable. Always ask.
Reserve price
The confidential minimum at which the house may sell your lot. If bidding doesn't reach the reserve, the lot is "bought in" and remains yours. Reserves are typically set at or below the low estimate, never above it, and are confidential — bidders are not told the figure.
A reserve set too high protects you from a bad sale but raises the no-sale risk. A reserve set too low (or no reserve at all — an "absolute" sale) maximises sale probability but exposes you to a weak room. Most specialists recommend setting the reserve at 70–80% of the low estimate, which gives the lot room to find natural opening bids while still protecting the floor.
Other fees you'll be quoted
Insurance / loss recovery fee — usually 0.5–2% of the low estimate, covering the lot while in the house's care.
Photography / cataloguing fee — sometimes a flat $50–500 per lot, sometimes waived for valuable consignments.
Marketing contribution — for higher-value objects, the house may ask for a 1–3% contribution toward catalogue inclusion, online featuring, and PR.
Withdrawal fee — if you pull the lot after the catalogue is printed, expect a 5–15% of low-estimate penalty.
Storage — usually free for 90 days, then $5–50/month.
Shipping / collection — quoted separately.
The fees that look small can quietly absorb 3–5% of your gross. Negotiate them line by line; many are waivable on competitive consignments.
Payment timing
Most contracts say you'll be paid 30, 35, or 45 days after the sale. The actual date depends on the buyer paying — if a buyer defaults or pays late, the house can delay your payment. Ask about the policy on buyer non-payment. Better houses pay you on day 35 regardless and then chase the buyer themselves; weaker ones wait for the cash before remitting.
Other contract terms to read carefully
Authenticity warranty. What happens if the buyer claims the object is not authentic post-sale? Most contracts pass that risk back to you.
Catalogue description. The house drafts the description, but you have the right to review it. Errors here are your problem at law in most jurisdictions.
Lien. The house typically has a lien on the property until paid, and on other property of yours they hold.
Exclusivity. You agree not to offer the lot for sale elsewhere during the consignment period.
Step 4 — Photography, cataloguing, and the run-up
Once the contract is signed, the house takes possession of the property and the work begins on their side. For each lot they will:
Photograph it professionally — for high-value items, often a dedicated studio session with multiple angles, condition macros, and provenance documents.
Slot it into a specific sale and order. Lot order matters: lots placed in the first 20 of a sale tend to outperform; lots after lot 200 tend to underperform.
Reach out to known collectors of that category before the sale.
Your job in this period is to provide everything that supports the description: receipts, original boxes, certificates, provenance documents, exhibition records. The richer the file, the higher the realised price.
How long does this take?
From signing to sale day, expect 60 to 120 days for a major scheduled sale (most houses run quarterly category sales). Online-only timed sales are faster — 14 to 30 days from consignment to sale close.
Step 5 — Sale day and after
On the day of the sale, you can attend in person, watch online, or do nothing. Most consignors watch online. Lots run typically every 30–60 seconds in a live sale, so your specific lot will pass quickly.
What happens if the lot sells
The auctioneer's hammer falls. The lot is now sold to the highest bidder above the reserve. The house collects the buyer's premium and the hammer price from the buyer over the next 14–30 days, then settles with you on day 30, 35, or 45 depending on contract.
You receive a statement showing:
Hammer price
Less seller's commission
Less any agreed fees (insurance, photography, marketing)
Plus any agreed share of buyer's premium (rare, top-of-market only)
Equals net proceeds wired or cheque-issued to you
What happens if the lot doesn't sell
If bidding doesn't reach the reserve, the auctioneer "passes" the lot. Depending on the contract, a few things can happen next:
After-sale offer. The house often holds the lot for 30–60 days post-sale and entertains offers from underbidders. Many bought-in lots sell within this window at or near the reserve, with full commission applying as if it had sold in the room.
Re-offer in a later sale. Sometimes the house will re-catalogue the lot in a future sale, often at a lower estimate. Some contracts auto-roll; some require you to consent.
Return. You collect the lot back. There may be photography fees and minor charges payable; typically the insurance and marketing costs were absorbed up front so you don't get hit again.
A useful protection to negotiate up front: a no-sale fee cap (e.g., "if the lot fails to sell, fees do not exceed $X"). Some houses charge a flat percentage of low estimate for bought-in lots; many will waive that on competitive consignments.
Tax considerations
Selling at auction generates taxable income or capital gain in almost every jurisdiction. Two specifics most consignors miss:
United States
The auction house issues a Form 1099-K to the IRS for proceeds above the threshold (currently $5,000 for 2024–25, dropping to $600 for tax year 2026 unless legislated otherwise). Even below the threshold, the gain is taxable — the form's absence doesn't make it tax-free.
Most consigned objects are "collectibles" for capital gains purposes and taxed at a maximum federal rate of 28% on long-term gain, plus state tax. This is higher than the standard 20% LTCG cap.
Establish your cost basis before the sale. Inherited objects use the fair market value at date of death (stepped-up basis). Purchased objects use what you paid plus any improvements.
Sales tax is the buyer's problem, not yours, at consignment.
United Kingdom
Personal-use chattel sales over £6,000 trigger Capital Gains Tax on the gain, currently at 18% (basic-rate) or 24% (higher-rate) for 2026.
The annual CGT allowance is £3,000 for 2025/26, so plan disposals across tax years if you have multiple items.
VAT is normally the buyer's problem on the premium; some lots may be VAT-margin scheme.
Other jurisdictions
If you're in Hong Kong, Singapore, the UAE, Australia, or Canada, the tax treatment differs materially. Talk to a tax adviser before consigning anything over six figures.
How-to steps
How to consign items at auction
Step 01
Identify the right house
Match the object to a house with proven results in that category. Get three competing valuation offers for any lot you believe is worth more than $25,000.
Step 02
Request written estimates
Submit photos, dimensions, provenance, and condition notes to each shortlisted house. Ask them to email you the comparable lot sales they used to triangulate their estimate.
Step 03
Negotiate commission and reserve
Push commission down for higher-value lots; on six- and seven-figure consignments, expect 0–8%. Set the reserve at 70–80% of the low estimate to balance protection against no-sale risk.
Step 04
Read the consignment agreement
Check authenticity warranty, catalogue description rights, payment timing, withdrawal fees, no-sale fees, lien terms, and storage/insurance line items. Do not sign without these clear.
Step 05
Hand over property and supporting documents
Provide receipts, certificates, original packaging, exhibition records, provenance — everything strengthens the catalogue entry and the realised price.
Step 06
Approve the catalogue entry
Read the description carefully before publication. You bear the legal risk of inaccuracies. Correct attributions, dimensions, and provenance details.
Step 07
Watch the sale
Attend in person or watch online. Note the actual hammer, the underbidder profile, and any post-hammer activity in case of after-sale interest.
Step 08
Collect settlement or pursue after-sale options
Sold: receive the wire 30–45 days post-sale. Bought-in: instruct the house to either re-offer in a later sale, attempt an after-sale negotiation with the underbidder, or return the property.
Step 09
Report the income to your tax authority
File the gain on your annual tax return. In the US, expect a 1099-K from the house. In the UK, calculate CGT on chattel sales above £6,000. Use stepped-up basis for inherited items.
Common questions
Most of the cost is the seller's commission (5–25% depending on lot value and house tier), plus 0.5–2% insurance, plus possible photography, marketing contribution, and withdrawal fees. Net of all fees, expect to receive 70–90% of the hammer price for typical consignments. On lots above $1M with a major house, you may receive 100% of hammer plus a share of the buyer's premium.
Most houses pay 30–45 days after the sale, contingent on the buyer paying. If the buyer defaults, payment can be delayed further. Ask about the house's policy on buyer non-payment before signing.
The lot is 'bought in' and remains yours. The house typically holds it for 30–60 days to negotiate an after-sale offer with underbidders, after which you can authorise a re-offer in a later sale or collect it back. Some contracts charge a small bought-in fee — negotiate this out where you can.
Yes — the reserve is your decision, but it must be at or below the low estimate (the house won't accept a reserve above their published estimate range). Specialists usually recommend 70–80% of the low estimate to balance protection against no-sale risk.
For objects with active competing bidders, auction nets more — typically 70–90% of hammer versus 50–70% of retail at a dealer. For unique objects with one realistic buyer, a dealer or broker who already knows that buyer is often faster and equivalent in net. Get both quotes before deciding.
Yes in almost every jurisdiction. In the US, gains on collectibles held over a year are taxed at up to 28% federal plus state. In the UK, chattel sales over £6,000 trigger Capital Gains Tax. The auction house issues an information return (US 1099-K) to the tax authority above certain thresholds.
Not for the auction house — they will give you a free estimate. But if the lot is part of an estate, a divorce, or an insurance claim, a separate written appraisal from a credentialed appraiser (USPAP-compliant in the US, RICS in the UK) creates a defensible value record before the sale.
If you're an auction house looking for tools to manage consignors at scale — pipeline tracking, contract templates, online consignor portals, and post-sale settlement automation — see our Operations playbooks and contact us to walk through how Auction Rabbit handles the consignor side end-to-end.