Here is a scenario I hear frequently: a new or emerging designer is excited because a local store has offered them the “opportunity” to sell a few pieces on consignment. With rare exception, I have a very strong NO consignment policy. Before I get into the details of why I have that policy (and why I think you should too*), let me first explain the difference between the two.
In wholesale, you sell your products directly to the store at a reduced price (typically 50% of the retail price). In consignment, you loan your pieces to a store, and if something sells, they send you a percentage of the sales price.
Here are some of the reasons why, as a maker, you should always choose wholesale over consignment:
- Cash flow. In wholesale, you get paid for your products in their entirety, either up front, or within a reasonable amount of time after shipping the order. (As in a Net 30 payment, where the buyer has 30 days after receiving the order to make a full payment.) In consignment, you only get paid when an item sells. This means that it might be months before you see income from the items sent out, if at all.
- Inventory. When you sell on consignment, you are sending out lots of inventory into the world, with no predictable timeline for revenue. If you are making everything yourself, you can only create so much at one time. Do you really want so much of your inventory tied up in other stores with no guarantee of payment? In addition, consignment requires you to be a diligent record keeper. You need to know what pieces you sent out, which ones have sold, and which ones are still sitting in every store you consign to at any given time.
- Professionalism. If a store asks you to consign, and instead you present them with a professional line sheet and set of wholesale terms, this can legitimize you as a credible business – not just someone looking to sell a few pairs of earrings on the side.
- Insurance and liability. This is a question that comes up frequently. If you consign to a store, and they have a fire, break-in, or go out of business, who covers the value of lost goods. If you don’t have a clear consignment agreement, it could be you. (And even with a good agreement, it might still be you anyway.) If the store had bought the products from you outright, it is clear-cut. The store now owns the goods and it is up to them (or their insurance provider) to recoup any value lost.
- Control and trust. When you consign, you are putting all the responsibility into the store. You must now depend on them to keep track of what has sold, and to pay you in a timely manner. In wholesale, both parties have a clear arrangement from the outset about what products are being sold, and when you will get paid.
A good rule of thumb is that if a store acquires the majority of their inventory through wholesaling, than you should insist they purchase your products wholesale as well. It is not worth your time and headache to consign just to be in a store. If you’re products are good, there will be plenty of other stores willing to work with you on your terms.
*There is one notable exception to this rule. If you make items with a higher price point (retail prices of approximately $250 and up) and you deal primarily with galleries, then you will most likely sell on consignment. It’s the way that system works.
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Want help growing your wholesale business? Check out my best selling class on Creative Live, Sell Your Products to Retailers.
Amen! When I first started out I found it nearly impossible to say no to potential customers, and ended up with a bunch of consignment accounts. I soon found that consignment was not only difficult to manage, but I would end up with a bunch of tarnished, not taken care of jewelry that I was really not expecting to ever see again. It’s still hard to say no, but I’ve learned it’s not worth it. Thanks for the post! I feel better now… 🙂
This is a really interesting topic! I don’t have any pieces on consignment anywhere, but I do sell at a store that is an art and antique store where I rent a case and sell at my price. They take a very small percentage of the sale when the item sells. I get a “paycheck” from them every two weeks like clockwork for items sold with a clear print out of which items sold, the percent they took for each sale, and other misc. info like my sales averages, etc. It might not be an ideal situation for selling, but because my profits are, on average, about 4x my cost, and I don’t have to spend the time being there every day to sell my wares, I feel like it is a good deal for me. What do you think about a situation like this?
I would love to acquire some wholesale accounts in the future. I’ll remember what you write about consignment! And congrats on the eBook! I’m looking forward to it!
Absolutely agreed. Put differently, putting work for sale on consignment is the same as granting an unsecured loan, but for an unknown term and rate of interest.
I’m also OK with putting my higher-end pieces with reputable galleries who will take care of my work if only for the sake of protecting their own image. In those cases, the exhibit is for a fixed period of time and with a clearly defined liability agreement.
I’ve found that consigning can also be dangerous to your inventory: Customers tend to handle products, and well-handled products often end up not selling. If you’re loaning the items to stores on consignment, in the end you often end up with a bunch of damaged products that neither you nor the store will be able (or should try to) sell. Because the store doesn’t have a financial interest in protecting your goods either, I think they’re often less likely to protect the products than they might be if they bought them outright.
I make one consignment exception for my stationery products: I consign to our small local food co-op. I know they don’t have the cashflow to purchase my products wholesale, and by consigning my products through them I can support a cause I believe in.
Great post!
Thanks so much for this post. It echos everythign I feel about consignment. Although I still find it hard I try to say no to consignment now and have not regretted it at all.
Other reasons I have for this are that with consignment you are putting the emphasis on the shop to sell your proudct for you. I once popped into a store I consigned with only to find my work in the back because they were rotating stock! If they had bought it wholesale I’m sure they would have been more keen to try and sell it.
Also I find that with consignment or Sale or Return as its often called in the UK, the seller is asked to cover shipping costs whereas with wholesale shipping charges are added onto the invoice.
Consignment just Isn’t worth it.
good points, and they reflect how i’ve felt about consignment.
i haven’t done either wholesale or consignment yet, but i was wondering if you could elaborate on setting wholesale policies? when entering into a wholesale contract with a business, is it typically the artist or the retailer who produces the contract?
I’m really surprised to hear that people have had bad experiences with consignment because on the most part, ours have been great.
Though it’s different for every artist and crafter, I think that consignment can be a good thing. We consign locally and in a few stores around the country, and the relationships we have built with these galleries and stores have been very professional, nurturing and they honestly care about the people who they do business with.
You have to pick and choose where you want your product to be and you certainly don’t have to consign to every person who asks. Start slow. If you can start with some local, well established stores or galleries, then you have a chance to be seen in your community and to get a little buzz going about your work.
This is a great way to talk about how to sell our stuff! As a crafter I’ve done the consignments in stores where they are usually thrilled to have you leave something. It’s a nice way to get started and test the waters. I’ve also had a booth in a craft mall which was a lot of work to keep stocked and displayed and was hit or miss for making any money–depending on traffic. This fall I did a few craft shows, which were a lot of work to prep for and dependent on the traffic. And I completely agree that these scenarios resulted in my making a lot of things, having a lot of things “out”, and having to wait for money from a shop. Last summer I started talking to a lady with a great little shop with a mix of things new and old, shabby chic/country/garden stuff. My kind of store. I had noticed she had handmade cards for sale, so I introduced myself to her, told her about what I make and she was interested in seeing some things. And every other month she emails a request for new items and I take them, and she buys them from me to sell in her shop. This is small change but it’s been a good experience that is working into something more. I’ve found a few things that makes this work: 1) know my prices are, a lot of people like to buy handmade items but if you don’t know a price off the top of your head, they are less likely to buy. 2) price things so that they can be bought wholesale, but so I still make money. 3) have a inventory list printed out when I go to the shop. This shows that I’m serious about my work.
It is really interesting to see how many of these comments reflect negatively on consignment. In the indie gallery/boutique world, many of the best indie shops have been built on the basis of consignment. In my opinion, this is for three main reasons:
1) Many emerging artists and designers aren’t prepared for what a wholesale relationship really means. First of all, true wholesaling means you make enough product to lower your costs enough to offer a reasonable wholesale price. I have been offered many “wholesale” arrangements from etsy sellers and other artists–often they are offering anywhere from 20-40% off of their selling prices as a “wholesale” price. In reality, a retailer needs to be able to mark their wholesale products up AT LEAST “keystone” which means double, and many times must price at 2.25-2.8% markup in order to cover shipping and their overhead in running a shop. In the gift and accessories industries, it is understood that wholesale means 50% off of the recommended retail price, at the least.
Also, many emerging artists and designers are not prepared for the demands and expectations of a wholesale relationship. If a product arrives damaged, you must have a policy for how to replace it or credit the customer (retailer). Can you offer Net 30 at some point? Do you have professional line sheets or catalogs, and a consistent seasonal stock for reorders? Is there someone available to answer a phone or return a customer email at all times? Retailers have precious few dollars these days, and they need to know that they are spending those dollars with vendors who will not leave them in a bind, and who are equally invested in helping their product to succeed. For a beginning designer, these demands may be too much all at once. Even if you don’t have a huge wholesale business, it takes time and resources that may not be available.
2) A consignment arrangement is a more natural relationship, and tends to suit artists better. In a consignment relationship, it might seem like all of the risk is on the artist–this is an artist-centric position. The retailer is paying for your rent, fixtures, utilities, advertising, sales people, and has a pre-existing customer base that he or she has spent time and energy cultivating–customers who trust that retailer to help them find just the right special item for every occasion. These things are all worth their weight in gold. The space allocated for your goods is real estate to that retailer, and they are putting their own business at equal risk with no guarantee of return when they choose to stock your goods. But never fear! The great thing about consignment is that both parties enter into a flexible, trust-based arrangement in order to better serve both parties. If either party is NOT honoring their end of the arrangement, then it is probably not a good fit. If they are, then this can be the best arrangement ever.
3) Which brings me to the best reason to do consignment: it is a conversation, not a one-way deal. In wholesale arrangements, a retailer (often nervously!) selects his or her goods for the season based on a budget that is most often (these days, especially) pretty thin. The shear speculation of it all binds the retailer into a anxiety-ridden wreck (trust me!), and makes it nearly impossible to choose a selection that will truly showcase a range of product that will maximize its presence in the shop. Thus, many wholesalers find themselves selling their lower-end goods over and over, when their best work really shines in their higher priced pieces: too bad, too risky! With consignment, there is no “dead end.” A consignor can send a really wonderful range of work to the retail shop with no budgetary limits except their own, no “nervous nelly” buyer trying to make their best guess at what the winning items might be. And what about the items that don’t sell in a timely manner? In a wholesale arrangement, the retailer is forced to slash prices in order to try and move the items, which sends a message to the consumer that, believe me, you don’t want to have attached to YOUR beautifully crafted items. Not only are your unsold items relinquished to the sales bin with big red marks over your logo (egads!), but you may never hear from that retailer again, and you’ll never know why.
Not so with consignment! Slow moving articles can be discussed–was it the packaging? Can the price be tweaked at all? Maybe the color choices, or would it be better to replace this item with a few others that are selling better? Does the artist have any experience with how to better display his items that can be shared with the retailer? The artist can take all of this information and put it back into his work, benefiting all of his retail locations in the end, and improving his overall business. Instead of waiting for a wholesale reorder that may never come, this is a conversation that never ends until both parties agree it is time to move on.
Obviously, I have a lot to say about consignment! I currently run a consignment-based indie boutique/gallery in PA, but I was a gift-industry wholesale rep before this, and was the manager and buyer for an upscale boutique for many years prior to that. I have spent most of my adulthood on one side of the counter or the other, PLUS I have consigned my own handmade items in galleries and boutiques! In all of these experiences, I can tell you that consignment is the most natural, rewarding, and flexible. True, not every consignment relationship is the right one for you–but, if you can take the time to seek out shops that suit your business “personality,” it can be a really wonderful opportunity to sell your craft, learn your market, refine your business naturally, and build amazing relationships at the same time!
Great post Alex — showing the retailer’s side of consignment!
I too have been on ‘both sides of the counter’ and can relate to lots of what you say! But you said it much better than I could have!!
Sandy
‘GiftRepSandy’
http://www.SellingtoGiftShops.com
Alex – I particularly like point #3 in your discussion. Sometimes I have wholesale buyers place orders and I may not care for the mix of product they are putting together (I try to steer them as best I can) and I also have no way of knowing how my items will be displayed. And I hate when I don’t get a reorder from a store because like you said you have no control and no way of knowing what has happened. I have had both bad experiences and good with consignment. But I agree with your point that it is a 2 way conversation and that takes some work but is important to keep in mind.
One thing that I have also done with my wholesale customers is that I offer to trade out merchandise. I like this because it keeps things fresh in their store – much better than going to the sale bin. And it is easy enough for me to freshen up returned pieces to sell again.
Hi Megan! Great topic and great comments! As a maker, sure, wholesale is ideal due to getting paid up front, liability issues, tracking loaned inventory, etc. However, as a manager of a store that relies on consignment due to a limited budget, I find a lot of artists are willing to consign because 1) they want to get their work out there, and/or 2) they have a strong desire to work with that particular store, for whatever reason. I think that if the details of consignment are not a burden for an artist, it is okay with special exception to consider consignment if a store is reputable and professional, i.e. able to provide artist references, regular payments with detailed reports, flexible consignment periods, a fair consignment percentage, and a thorough contract that protects both shop and artist (ex. terms, shipping, and “we break it, we buy it”). If a store doesn’t have a formal contract and can’t provide references from artists they’ve worked with for a while, then there is no guarantee on how the store will treat you or your inventory. Consignment is not for everyone, but there are professional shops out there (unlike the nightmarish ones we hear about) that work to support artists and American handmade craft in any way they can.
My-oh my!!! So many negative comments about consignment !!! This makes me so sad! I love sharing the art I make with new places and people.
Exposure is so important! Why would anyone want to limit themselves- rather deprive themselves of the opportunity to expand and expose (what they make and love.) If you sit and wait for the wholesaler to come ringing your bell and pass consignment by…you are possibly missing out on new opportunities… I consign AND do wholesale with stores…in this economy you need to keep an open mind and be flexible. I love the products I produce I want the exposure, I want to make money…I want to be available.
I am sorry if some people have had an unpleasant experience with consignment…the same thing can happen with a wholesaler. Once a wholesaler buys your wares- those items are out of your hands and you might disagree with how they get displayed and how they are treated. With consignment that is negotiable, NOT really negotiable with wholesale.
Not many small, independent businesses (especially boutiques/galleries) can afford to start off wholesale. This doesn’t make them any less of a business.
To write-“it is not worth your time and headache to consign just to be in a store.” Let me tell you, if barneys from NY called me up to put my items in their store(on consignment), I wouldn’t say NO! If someone from LA asked me to consign, I would be so excited at the prospect of a large metropolitan city to show my wares!!! I am 34 and I get excited about new opportunities all the time…and, I think that’s ok…because, I love what I do 🙂
Discouraging artist and craftsmen from doing consignment creates a stereotype and, I am NOT in this business to discourage anyone from trying something that might benefit them.
I run a consignment based business and I am happy to support artist and craftsmen from all over who want to share what they do, because they do it well…and, if you have a well made product that is accessible (affordable helps) it will do well anywhere… consignment or wholesale….sorry for any spelling and grammatical errors 🙂
Thank you for the informative post again. This post made me curious about your thoughts on drop shipping custom orders for shops vs. wholesale. Do drop shippers expect the same wholesale discount? Should my shop have a drop ship fee? If so, how do you determine the drop ship fee?
Great post! Thank you! Currently going through the struggles of getting consignment orders switched to wholesale.
hey everyone – thanks for all the fantastic comments! i love that we can have a dialogue here! i know that everyone has to find a way to build their business that works for them.
alex – i don’t think having a relationship with your stores is exclusive to selling wholesale. i have a great relationship with some of the stores that i sell wholesale to. we discuss products that are and aren’t selling well, what is working, and i happily offer my stores the opportunity to exchange a piece that hasn’t sold for something that sells better. (This gives my stores the opportunity to try a more expensive or unique piece with less risk.)
whitney – i believe there are exceptions to every rule, and the occasional consignment agreement with a reputable gallery can be beneficial to an artist. but I prefer to make consignment the exception rather than the norm.
elissa – I would never advocate sitting and waiting to be found by anyone and picked up as a wholesale account. There are so many ways you can contact a store to consider your work for wholesale. And if Barney’s contacted my about consignment, I would make every effort to get them to place a wholesale order. Perhaps they didn’t realize that I offered wholesale. Additionally, Barney’s buys millions of dollars in products a year, and I find it hard to believe that if they really wanted my product, they couldn’t find a few hundred dollars to meet my minimum.
jenn – as a wholesaler, you set your own policies including minimum order and payment terms.
This discussion has been very useful for me. I just started wholesaling my new line of nature glass pins and pendants and just got my first three wholesale orders. I like being paid up front and just need to get more accounts. Also, I have found that it takes persistence to get the sales. It took three emails and some calls to get an appointment for each new sale. Probably because I am a new vendor. Once they saw my product in person and spoke to me they placed an order. What I would like is to get paid up front, then fill the order!
My higher priced pieces; the mosaics, will be suggested for a trial consignment after reading these comments :~)
Thanks so much from an artist new to all of this!
Sue
This is extremely helpful advice. I’ve got my first store interview next week and I feel much more prepared. Thanks so much!!
I’ve been struggling with the idea of all my goods being sold on consignment. I really appreciate any opportunity that is given to me. I realize that my focus should be more wholesale-minded. Most definitely.
meauman, thanks for this article and for those sharing their experiences with consignment and wholesale. It was great to see both sides of the coin, the plus and minuses for each. Wonderful discussion!
Thank you for posting this article, it’s very supportive of what I have been discussing with other artisans as I have been taking more “control” over my inventory and sales, I’ve been shifting away from consignment.
I haven’t had a chance to read all the posts listed here and am in agreement of what I’ve read so far! One point (not sure if it’s in a later post) is I’ve found the stores that I wholesale to tend to promote store, artisans, wares, etc. more. I believe this comes from they have an investment and want a return. With consignment, some stores will either focus on their own work or slack on proper display, sales, etc. I’ve also had problems with stores not always handling inventory properly, not keeping inventory (even though I supply a detailed sheet along with all items labeled) and not paying on time.
While it might be tough economic times, this applies to stores and artisans alike. Artisans shouldn’t become bill collectors hunting down payment. With wholesale, it’s done and out the door and the responsibility of the store. Stores can often sell item at a higher price when buying wholesale rather than consigning, so in many ways it benefits them as well.
The time invested to do rotations is also time consuming and it’s difficult to have inventory tied up in stores. I’ve been fortunate with the wholesale accounts, sales have been steady and ordering has been in a consistent manner to that of store consignment rotation-with a lot less stress, running around, expense and the bonus being paid up front!
With year end analysis and doing taxes, I was able to really take a closer look at how my system works and in the big picture, I lose money consigning. So even if you are selling wholesale at a higher percentage than what a store’s commission might be for consignment, calculate time, travel, postage, etc. into the equation and the results might surprise you!
Thank you again for this article!!
Thanks for this timely article since I am considering doing consignment w/a home accessory gallery on the east coast. I have had the experience of doing both consignment & wholesale and prefer wholesale, but I’d also like to get my products out in this region currently. I live in a rural area out West so I can’t just drive to the nearby metro city to connect w/stores. She found me through my website.
Megan, thanks for the wholesale vs. consignment conversation. Wonderful feedback!
I would also love to hear your thoughts on drop shipping. Do you offer your wholesale price in addition to a flat fee? Thanks Emily for bringing up this topic!
This is a very helpful post. I have been asked by stores over and over again to sell my jewelry in their B & M stores on consignment. I have this argument with myself all the time: Why I would I want to tie up my merchandise in their shops. But – on the other hand what good is it sitting in my house! I think I am going to pursue wholesale. Thanks for the insight.
I totally agree with you on this! However, it seems that the small independent boutiques in my area are only able to stay in business with this economy because they are ONLY consigning. I’ve pulled out of places because of shoddy record keeping on their behalf. Never ever ever leave merchandise with an owner that has not been written done & accounted for. I even make the owners sign my copy of the line sheet so I have proof of what was left with them. Looking forward to your ebook! ….when(if ever) do you find time to sleep!
Thank you for this informative post. Along with many of the above comments, I’m also gearing up to approach stores with my handmade items. There are definitely many fors and many arguments against consignment…..I think if a high end store that I really want to get my products into will only take them on consignment, then providing they are prepared to meet a few of my own requirements with regards to care of my items whilst in their hands and that the items are always displayed in an appealing way…then I would feel compelled to agree to it.
I whole-heartidly agree about your NO consignment rule. I have had to learn the hard way though. Recently, I had consigned at a shop that closed its doors without telling any of its consignors. It never returned my items nor those of at least one other consignor. The shop owner will not respond to any attempts at collection or contact. I have lost hundreds of dollars in merchandise not to mention time and anguish while the shop owner will probably never have to pay for their misdeeds. Basically, I have learned, through my own trusting nature, that consignment is simply a way to get stolen from easily and burned badly in the long-run. I plan to NEVER consign again. I know that not all shops are like the deceitful one that I have dealt with recently, but I am not willing to chance it. Wholesale (money up front!), yes, but consignment (perhaps no money and merchandise lost), absolutely no!
i agree with you re. consignment. i make handbags and accessories and it was always a headache!
first time i’ve been on your site.
thanks for the honest info.
i’ll be reading more of your posts!
diana
emily & valerie – i don’t have any experience with drop shipping, but i’m working on getting someone who does to guest post. i’ll keep everyone posted.
johanna – would you believe me if i told you i get 8 hours most nights!
thanks to everyone for weighing in with their thoughts!
Wow! So many great comments on both ends of the spectrum. I am not against one or the other. I’ve had one consignment that did not work. I went to the store took out all my stuff and sold it all myself. I also gave a few of my things for month long consignment but it was for an event at the store that dealt with knitting. The owner was VERY professional, came to my studio, chose what she thought would sell. When she returned, had the rest of my items well taken care of and a nice check for me from the event. So yes, consignment can work if the owners/buyers are VERY professional and if they care about your designs as much as you do. And also if it is a special niche situation. It is my goal now to only go wholesale though. I have a friend that is a showroom owner, that I’ve known for a long time. We have a great relationship and have come full circle to work with each other. I learn a lot from her. See many of us are considered “indie” because we are hand makers of our designs. But in the mainstream “trendy” market they look down on consignment period. If a store does not want to take a chance and purchase you line wholesale, then they don’t believe in it enough to push it and move it. Or maybe you are not targeting the right boutique…I agree that for a small business owner, I really can’t afford to do consignment. Also store will really push that item when the buy it from you. Most of the time consignment is just to fill up someone’s store and you really don’t want that. I would say not to rush into any agreement, wholesale or consignment. Have lunch with the buyers, or shop owners if they allow. Visit the store as often as you can to get a feel for the workers, owners, and buyers there. Test the atmosphere to even see if you even want your items in that retail establishment. Don’t be desperate. Shop for accounts like you would a house, or new pair of shoes. It has to be the right fit for you. And the mention about new and emerging designers not being prepared for wholesale accounts, do your research before hand. The internet is wide open with tons of information. There is not reason why anyone should not be equipped with enough information to go into a wholesale agreement. Then after that you will gain hands on experience! Great topic!
I had things in a shop on consignment once, and the shop suddenly disappeared in the night along with my items and any money that was owed to me on the things that had sold. Now obviously this was not a fine art gallery, it was a craft and gift shop, but still a lesson learned about consignment.
So far I have items on consignment at two boutiques and one is extremely organized and timely in sending payments while the other is much less so. I am thinking of removing all but a few items from the less organized boutique. I do wish that I had done more research before I jumped into the first consignment situation but it’s really been an excellent learning experience!
Thank you all for your insight on wholesale and consignment. I agree that some of us can not rule out consignment. (I haven’t done it.) But since getting to retail is a giant leap for beginners, consignment seems like it would be good to test the waters of even being in a brick and mortar store.
I would love to see examples of a line sheet for wholesale and a consignment contract. Anyone? 🙂
I have been doing business since October 2009 and have been doing consignments in two local stores and have been very pleased with the outcome. Since I started my business so close to Christmas it was hard to get into the craft shows.
I went to a couple of shops and they loved my items and we have been doing great. I do take an inventory sheet with my items and prices and leave one for them and keep one. As they sell an item they can check it off and copy the list to include with my payment.
I also have received lots of custom orders from them. I feel it is a good way for me to get started and to get my name out. I set up a date with them where I was in the store for the entire day and I made up flyers to pass out a couple of weeks in advance. That way I got to meet the customers and talk with them about my products.
I have a good relationship with the owner and she trust me to put in whatever I want. I feel it is like having my own store without the overhead and expenses. I don’t make as much on each item but am selling more and certainly helping me get through the winter months when I don’t have many shows.
karen would you be willing to share what your inventory sheet looks like or how you built it? Thanks!
Jenelle,
If you email me I would be happy to send it to you. It is really simple so get to excited. I just made a table with cells,
showing the date and what store. Then I broke down what I was sending and listed each item on a singe line. Describe each item and I have a cell where they can fill in date sold. There is probably something better but this works for us.
Thanks.
Karen
graciespawprints.etsy.com
Yes! I am in the process of opening a brick and mortar shoppe and attaining all inventory from Etsy. This is the first time I have ever dealt with wholesale and retail and I love that Etsy is making it easy for me to stock my shoppe with vendors so excited to sell wholesale! What a great way for indie vendors to make it big!
Brilliant article! I’ve sold on consignment but wouldn’t do it again. I didn’t have problems, but I think it’s not the way to grow a business longterm. Another downfall of consignment is that there is less reason for the store to push your item if they’re not having to recoup any outlay. It makes no difference to them if it sits there unsold. This is my first visit to this site – can’t wait to trawl through all the previous articles!
You might consider a sales rep. I had one some years ago and it was great. I am working on that again.
What a great discussion!
My sister and I are in our third year of business selling jewelry, and I have to say I’ve really come to rely on and love my relationship with our consignment stores. Yes, it is a lot of inventory up front, but because we are able to stock them with so much more inventory than the stores could afford wholesale, our work gets a much bigger and nicer display in their store. And, in our case, that has led to a fast volume of sales. We’ve come to rely on the frequency and consistency of monthly consignment checks coming in from our dozen or so stores. Our other wholesale accounts are great, but they may only order once every few months or even every year, so it can be a less reliable payment schedule.
That being said, we’ve also had some bad experiences with consignment, and definitely agree that you shouldn’t enter into a consignment situation with anyone who is disorganized or who isn’t prepared to treat your inventory with the utmost respect. Our best rule for consignment: only consign with stores that are close to you, so that you can go in and check up on how things are selling, being displayed, taken care of, tracked etc. We hope to continue selling consignment locally, while expanding our wholesale accounts nationally. Good luck to all!
This was a great post and great comments. I sell on consignment in a small boutique. This is my first experience in a shop. I am selling items and learning as I go and just got approached for a wholesale order… I am excited for that and that will be a first as well. Thanks for both takes for and against on both. Still tons to learn.
I agree with all of these!I had a baby and it is taking me forveer to lose the baby weight but most of my pre pregnancy clothes don’t fit and I don’t want to buy new ones, because I know I can get to that size (and smaller) like I once was its just taking time! I hate you baggy jeans!!!
100% wholeheartedly agreed! I no longer let my paper clip chandeliers (from my alter-ego shop) out on consignment to galleries as they always come back to me horribly broken if unsold. I need to work out a “No Touching” policy that can be taken seriously by galleries.
Wonderful ideas and comments on both wholesale and consignment. I’ve had a great experience with a couple of small stores that carry my glassware on consignment (I deliver an inventory sheet that they sign one copy of, with coded stickers on each piece), and get a cheque every month from them, as well as lots of custom orders. I’ve also had 2 stores go out of business, one of whom I had shipped merchandise to but hadn’t received their cheque yet (they bought my stock upfront), and another that I dealt with for 2 years on consignment and they suddenly closed their doors and wouldn’t return my calls — really disappointing and I lost several hundred dollars of glassware in both these cases.
I agree that it is important to be able to monitor the store, see how your work is being displayed, and have a good return policy if something doesn’t sell (I’ve been known to ask them to donate it to a worthwhile charity). You need to find someone who loves your work almost as much as you do, and it will go well!
I’d be happy to email a copy of my inventory sheet to you Janelle, just let me know.
Thanks to everyone for your input.
This week’s Etsy newsletter linked to this article and I found it so helpful! I’ve heard some horror stories about consignment, from lost items to checks lost in the mail. This was a good breakdown, for a person like me who does Etsy on the side without a ton of business experience.
Hi
I’ve got 2 stores on consignment, but one payed me up front if the product are soled within 6 months, the money is mine, if not the money is theirs again and my big felted rocks are mine again. This way you at least have money to buy stuff for making your goodies.
nynke
Thanks for this post and all the comments, too! I have been struggling with this issue for a while now, since it’s not easy to find retailers willing to buy wholesale. I found a store whose owner was willing to go half way, that is, she buys some and consigns some of my pieces, which has worked well for me so far.
Still, there’s so much to consider when it comes to consignment… This post and all the comments have been good food for thought!
I so wish I had come across this advice a year ago. I’m presently embroiled in a consignment deal gone sour. And the worst bit of all is it’s in another town over 2 hours away. Thanks for all the advice, and the encouragement… sometimes a store can make you feel as though they are doing you a favor when really it’s your work that people admire and buy. Thank You!
Having owned & operated a consignemnt shop, I can tell you a few other areas of concern you will want to think over. In my shop I tried to carry a little bit of everything as long as it was vintage or antique, but the problem with this is that this policy allowed for too much inventory that honestly, A) I simply didn’t have enough knowledge to promote an aggressive sell, B) I ended up with so much inventory it became impossible to display a great of it openly to browsing buyers. And C) and this is a big concern, unless you have 100% control over the placement and display of your product, such as a booth, the atmosphere surrounding your product may be less then attractive to your line of goods. Consignment shops, like any other business, live or die by their percentage of profits, so if consignor (1) is making me more money for the shop owner then he’s going to get more support, more attention, and better representation. Take it from me, these are issues you really want to think over before placing your merchandise in a consignment shop. As for the “insurance” concerns, I tried to get a rider that would allow me to cover my client’s merchandise and it simply couldn’t be done, you are responsible for the merchandise you place in a consigment shop, not the owner, even if he wants to be.
One last concern from my consignment shop owner experience that I’d like to pass on to you, if you rent “booth space” and an accident takes place inside that rented area, you may learn the hard way that YOU are responsible for the cost, not the building owner or shop owner. This is an area I strongly advise that you investigate before deciding to, “rent space.” I know other consignment shop owners and this always seems to be an area nobody agrees on, so see your insurance man a get the real lowdown before you jump into anything.
Wow, this article really put a spin on selling in area stores. I am so happy I read this before I headed out into that jungle. I have been reading horror stories about consignment stores going bankrupt and merchandise being lost in our area of Florida but thought it was a local phenomenon. I now know what to look for and how to handle my accounts, product and paperwork thanks to this article and all the experienced responses. My jewelry is so diverse in style I will need to talk with the store owner in depth to get a feel for what to make as well. Thanks Guys!
In reality I am not a very trusting person. That said, putting my buttons in shops on a consignment basis was really difficult. I was not able to entirely overcome my trust issues. So only put my wares in shops within a reasonable driving distance. I have very detailed agreements which the shop owners must sign before I’ll leave my buttons and wares in their shops.
I make it a point to keep in touch with them both via email as well as by phone. This reassures me that they’re still open and haven’t closed and made off with my goodies. And also let’s them know I want to keep them restocked with what is selling best for them. I visit each shop once a month to restock them and straighten out the display. This is very pleasing for the shop owners, and also gives me a chance to do a quick inventory which pleases me.
Consignment is not without risks, but it does get your items into shops that might not otherwise be able to afford to make a purchase wholesale. Once they see however that your items are selling on a regular basis they will often find the means to make a wholesale purchase and make more money per sale when they own the items as opposed to consignment.
One tip about consignment. Keep it small. Don’t put a ton of retail value into any place. That trust thing again….LOL You’ll sleep better at night.
I used to have a hat business. It was fairly successful but I decided not to go for the big loan and factory though I suppose I could have. I did the Javits shows, craft and other shows. I found out that consignment is very difficult. I got a rep and all her shops were deadbeats. I had to go and retrieve my wares from most, and twice I had things stolen out right to the tune of more than several thousand dollars.
Even friends with stores would give me checks, but often with instructions on when to cash them.
I just thought I’d weigh in on your side.
Thanks. Megusta/Chandeluse
I created a “mixed system” that I’m now proposing to stores.
It happened because I was living this debate in my short crafter’s life. I begun some months ago and intended not to accept consignment’s stores, unless I had a personal relationship with them.
But I had to change my mind…
So I reacted proposing a “new system” that maybe considered a “mixed one”.
I send my articles on a consignment basis and I assume shipping costs. I agree with shops that they’ll have my products for two months on that basis. After that they will pay me the products they’ve sold including the unitary shipping costs.
In what concerns the remaining products they’ll be able to choose between returning them to me (while paying shipping) or buying them.
I think this “system” has some of the benefits of the other “pure” systems. For instance, I’ll be able to show my products in some shops that otherwise wouldn’t accept them. But as shops know that in two months they’ll have to make a decision on my products and that they’ll have to support a cost to return them, they won’t look at them the same way they do to other consignment products.
I think it’s a good way of really sharing risk. It gives the shops the opportunity to know your products but reduces your risk of having your product there for the eternity…
It surely has a problem… What can I do if a shop doesn’t pay me and/or return me my products? But it’s not a very different problem from that faced by a “traditional” consignment or a wholesale which payment is not made within the 30 next days.
Choosing carefully the shops will help!
And trusting your products will also help. If they don’t pay or return the remaining products they will be erased from my (long) list of sores… 🙂
(I hope I made myself clear… Sorry for my bad English)
bravo! I have done something similar to this but have a credit card on file prior to shipping anything. I explain to them that if I don’t receive the items back or payment – I will charge their card.
I only wholesale now, but as most of us, I have consigned too. My pet peeve with consignment is the fact that if they don’t own it, they don’t care much about how it’s treated. I have noticed my work in stores displayed in an awful way. Sometimes they put a sticky label on the story card which when you pull it off, it rips the paper. Other times they fill up a box, where you have to rifle through them, in a disrespectful way. In order for the buyer to feel it’s a worthy product, it needs attention, respect, a great display.
The information you have provided is very helpful and much appreciated – Thank you!
Melody
As I was sitting here, trying to focus on what to do next, I found your website. I’m excited and reenergized! Thank you all for all the comments and useful information.
I’m thinking of getting into the wholesale business, I’ve done the craft fair routine, which was great fun, until I found out that I made as much as I spent. Although, I have to say I loved the energy, selling the product and creativeness of the folks around me.
Recently, I’ve retired and I guess I’m not done with that creative spark! I’m off and running, this time wholesale…….
Thanks, again, for this wonderful forum!
Hello,
I got a question on what the consignment price should be set at. If we are to sell our pieces for wholesale for at least 50% or half the price then what should we be setting our consignment price at?
Hello,
I got a question on what the consignment price should be set at. If we are to sell our pieces for wholesale for at least 50% or half the price then what should we be setting our consignment price at?
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Wow, I have been out there in all facets, I have consigned my work, wholesaled it, managed galleries and boutiques, own a gallery and done art shows. I just want to add, consigning works well for me as an artist and a gallery owner. I have done the wholesale shows, and worked like a dog for pennies in that rat race. The only real way to get your work out there are the trade shows. These will run you anywhere between $4,000-$8,000 including transportation, lodging, electricity, and so on. Then you are selling to shops, many never reorder, at 50% off retail. You have to front all of your supply money, which can take months to recoup, depending on the time it takes for you to build and ship your work. Shipping is expensive, I usually charge the shops for shipping but depending on what you make(ceramics in my case) packaging supplies I almost never recoup my investment. This can cost upwards to $1,000 a shipping season, and I have a cousin in the packaging industry who offers me his steep discount. No matter how careful you are, you will spend countless hours chasing payments, many shop owners will give you maxed out or canceled credit cards, or they ask you to call for payment. Often you call and call and call for sometimes months and you never get paid for the work you made.
So after 8 years of tireless work and counting my pennies earned after I made everyone else rich at my business. I consign to a couple key shops in heavy traffic areas, to people I can trust, and the checks come in monthly. I have also retailed my work at art fairs, which are hit or miss these days. My investment there can be anywhere from $250 on up. Generally in todays economy I am lucky to triple my investment, after sitting in the sun, and working hard, really hard.
We have around 80 consigning artists at the shop I own now. I am very careful and responsible with their work. Sure, we have work that for some reason or another is just not a great fit and it sits, despite my careful selection process. But much of the work we have we sell. Artists get paid monthly, and when I look at it from their perspective, a good, solid wholesale account will generate from $500-$1500 a year many of my artists exceed that at my gallery. They get a better percentage than 50%. They aren’t paying huge fees to sell their work to me, like I had to at the trade shows. Artists can pop in the shop, check in on us, make sure their work is displayed beautifully and their work is being cared for. They can choose what work they give me, because they know what sells. They also can put more of a variety of work in the shop, than I could afford to buy. As a wholesaler, shops would order so conservatively, 3 of this, 1 of this, 2 of that. I am sure my display at their shop, looked lost, discombobulated and left over. Having an abundance for a customer to choose from always generates better sales.
Don’t get me wrong, consigning isn’t always a party. I have had bad experiences as an artist, but when all is said and done, It has been overwhelmingly good. I have tried it all, found some solid shops I can trust, and consign with them. I also run my own gallery and both purchase outright, and consign. My consigning artists, generate 75% of my sales monthly. And I am happy to write those checks to them, they are of great value to the shop, and I owe much of the success the shop has seen to the variety, uniqueness and quality their artwork brings to the gallery.
Hoping my blood sweat and tears, helps bring some clarity to artists. It is good to get different perspectives on things. Often as artists, I think we can get stuck, in negativity. We focus on things we shouldn’t. The big picture and numbers aren’t always our strong suit. I think that is why I struggled for so many years, wholesaling. I just couldn’t see how hard it was, for me to make the little amount I was making after all was said and done.