Insights / Decommissioning / Walnut Creek
RESEAT / Insights / Decommissioning

Buyback, consignment, or brokerage: how a furniture deal is actually structured

Two offers on the same inventory can differ by a factor of three and both be honest. The structure is doing the work, not the price.

Decommissioning
In short

Used office furniture is sold out of an office three ways. A buyback is an outright purchase at a discount, where the buyer carries all resale risk and you get certainty and a lower number. Consignment pays you a share when each piece sells, so you carry the timing risk and keep more of the upside. Brokerage places the inventory with end buyers for a fee, which generally produces the highest gross on a matched lot but takes the longest. Which one is right depends almost entirely on how much time you have before the space has to be empty.

You send the same inventory to three people. One offers a cheque this week. One offers seventy percent of whatever it sells for. One offers to place it and take a fee. The numbers are not close to each other.

All three can be fair. They are pricing different amounts of risk, and the risk being priced is almost entirely about time. Once that is visible the comparison becomes straightforward.

The three structures

Which one fits your timeline

Time to lease endUsually the right structureWhy
90 days or moreBrokerage, or consignmentEnough runway to reach end buyers, who pay the most
60 daysMixed. Broker the A-grade, buyback the restThe good inventory can still find a buyer; the rest needs certainty
30 daysBuybackYou are buying certainty, and that is a legitimate thing to buy
Under 30 daysBuyback on what moves, donation and recycling on the restThe resale window has closed and the priority is diversion, not recovery

That table is the whole reason a decommission should start ninety days out rather than thirty. The furniture does not change. The structure available to you does, and each step down the table costs recovery. The full sequence is in the 90 day Bay Area decommissioning checklist.

How to read an offer

  1. Find out who holds title and when This is the difference between the three structures and it should be stated in one sentence. If it is not stated, that is the first question.
  2. Ask what happens to unsold inventory, and when On a consignment this is the whole deal. A share of sales with no end date means you may still own a warehouse of panels in March.
  3. Separate the recovery from the removal cost A single net number hides which half is being negotiated. Price the removal as its own line and the recovery as its own line. The same rule applies to a bid, and it is covered in writing a decommission scope of work.
  4. Ask who pays for the pieces that do not sell Somebody moves, stores, and eventually disposes of them. Tipping fees are charged by weight and systems furniture is heavy. Know whose line that is.
  5. Ask for the category breakdown An offer that values task seating, height-adjustable bases, systems furniture and casegoods as one blended number is not an offer you can evaluate or hold anyone to.

What raises the number, in every structure

The inventory decides more than the negotiation does. Three things move it, and all three are within your control if you start early enough.

The satellite office version

A small Walnut Creek or 680 corridor office closing or downsizing has a different problem from a 200,000 square foot floorplate. The lot is too small to attract a dedicated buyer on its own, which pushes it toward buyback by default and at a poor number. The move that works is consolidating it with other inventory so it reaches a buyer as part of something bigger. Response in Walnut Creek is 48 hours rather than the 24 most core Bay Area markets get, so start the conversation a little earlier there.

Have an inventory and a date? Send both through the decommission intake and we will come back with what each structure produces, rather than one number with no structure attached. Selling your office furniture covers what specific categories are worth.

Questions we get asked

A buyback is an outright purchase at a discount to expected resale value, so you get certainty and a firm date while the buyer carries the risk of it not selling. Consignment leaves title with you and pays a defined share as pieces sell, which produces a higher gross but leaves the timing risk with you.

Brokerage to end buyers generally produces the highest gross on a matched lot, because an end buyer pays more than a reseller does. It also takes the longest, which is why it is only available to you if you start ninety days before lease end rather than thirty.

Who holds title, the share you receive and when it is paid, a stated end date for the arrangement, and what happens to unsold inventory at that date including who pays to move, store, and dispose of it. A share of sales with no end date can leave you owning a warehouse of unsold panels.

Keep the lot matched rather than mixed, sell in place where the schedule allows so buyers see it installed and standing, and document manufacturer, model, year and condition by zone. Guessed inventory sells for less because buyers discount for their own uncertainty.

Keep reading

Clearing a space this year?

Tell us what you have or what you need. We come back with a plan, a number, and the impact math to go with it.

Decommission intake Submit a design brief