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Pros and cons of consignment

23 September 2010 10 CommentsBy Sarah Shaw

A great way to break into stores is consignment. I did this  a lot when I first started out. 

Here is the tip: 

Be sure to make a real invoice for your items so it is clear what you expect to be paid. Make arrangements to follow up after 30 days and let them know that you expect to be paid at that time for what has sold. 

If it is going well, then restock the store and start again with a clean invoice. Only con is that they can be slow to pay, or that the items are all returned to you because they didn’t sell. 

All in all, I see it as a win win and have often landed big accounts because I offered consignment.

Let me know how it goes for you!

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10 Comments »

  • Shawnasie Shear said:

    I have considered offering consignment for some time now. Am actually searching for local stores to approach right now! Your simple tips are a great help. Thanks for posting!

    Shawnasie Shear
    KJLS Designs

  • Malissa said:

    I don’t do consignment because most stores will not cover theft, loss, or damage and they also want 50% of the sale and the right to mark down at their leisure. Wht should they take half if they aren’t taking a risk?

  • Kande Hall said:

    Hi Sarah,
    I have a pretty strong opinion of consignment… most of my friends in the fashion biz urge me NEVER to do consignment. As the designer, you take all of the risk and the store usually takes advantage…. some of the biggest abusers are the top boutiques in Los Angeles …they don’t pay their vendors and use the revenue generated to buy other lines, etc and typically take advantage of the small companies who don’t have the bandwidth to marshal stores who have their goods for FREE.

    If designers give their stuff away for free then that creates a plague inside the industry and companies like mine; French Kande — can’t compete when other designers are giving goods for free. I’m running into this at stores and it’s ugly. It is highly difficult to monitor what is being sold and then it is highly difficult to collect.

  • Rhonda said:

    I have a friend that uses consignment shops. I’ve never used them before, but I feel that this may be a very useful option. My friend says that it’s only worth bringing in your very best “top quality items”. Your other items may be better sold through garage sales or grouped lots on ebay.

  • Michelle Lessing said:

    What are your recommendations for consignment when you are just starting out? My product is not mass produced and I can not afford to give it to stores for the 50% profit they are looking for.

  • Prairie Primitives Folk Art (Tana) said:

    I’ve been a craftswoman for more than 30 years. I have had my own shop, had a space in an antique & crafts mall, sold on consignment, sold wholesale (including several reps and sharing a booth at 2 wholesale shows), online, and at crafts & antique fairs … pretty much done it all as far as selling goes!

    These days I prefer to sell direct to the customer. My current line, Prairie Primitives Folk Art, consists of handmade primitive & folk art cloth dolls and home decor and many of my designs are rather time-intensive to make. You can click my name, above, to visit my Etsy shop. :-)

    To sell wholesale, my retail prices would have to be SO expensive so that there would be room to offer a discount to stores. Most stores aren’t crazy about you selling your things for less than they are charging for the same (or very similar) items.

    If you are considering consignment, please give serious thought to the other comments made here! Theft, loss, and damage are all real hazards when consigning.

    If you’re using wholesale reps, not only are you selling for approximately half of the retail price, you’ll also have to pay the rep a fee of 15% to 20% of the wholesale price.

    These days, I’m selling primarily at craft fairs and online. I especially enjoy selling at antique fairs because the style of my work complements country and primitive antiques so well! Online, I have an Etsy shop and a Picturetrail site. I also have an Artfire shop and a selling blog (I haven’t done much with either yet). I’ve sold on eBay for more than 12 years, but that’s mostly been stuff other than my handmade things.

  • connie ozdil said:

    hey Sarah!
    I have to tell you that I REALLY enjoyed your online video, and I am so glad you sent an e-mail because as you know life with kids, it was impossible for me to watch it last nite.(soccer game for my lil guy and 104 degrees here in the S.F. area). Great info. I have been hunting for local Holiday boutiques to sell my line, just what you suggested thank you thank you!! AND I cannot agree more about the partnership tip, I have heard horror stories about that. And I am so glad I am a mompreneur all alone but with great help from blogs just like yours. I can’t thank you enough!
    keep the good stuff coming up and stay good down in L.A.

  • Tara said:

    I own a resale & consignment store. We carry several lines/products that are made by local crafters and mompreneurs. Our store keeps 30% on these items, versus the 60% we make on gently used items (clothes, shoes, accessories) that are consigned with us.

    To say that the store is taking no risk is not entirely true. When I take on a new product line I am setting aside prime sales floor square footage to debut the products. I know exactly what I need to net per square foot in order to meet my bottom line. I rotate products through different prime selling spots in the store before settling on a place that works well…and even then, we have to keep remerchandising to keep things looking “fresh” and tantalizing.

    When you consign your items with a reputable store, you are getting much more than simply a spot to “put out” your stuff. I have spent hundreds of hours and tens of thousands of dollars (at least) in the six years I’ve been in business to learn my market; advertising, marketing, merchandising & display, demographics, stylistic preferences, etc.

    I have built up a customer base through long months of sacrifice where I could hardly buy groceries because every single dollar I had was sunk back into the business. There was a HUGE investment for me to build up that base…and Artist Consignors (as we call them) get to take full advantage of that without any up front cost. You may feel like you’re giving them product for FREE (i.e. they don’t pay you until items are sold), but keep in mind that from the store’s perspective, they are giving you precious floor display space for FREE.

    I am very careful about the product lines I take on because I’m not going to waste precious sales space or an Artist Consignor’s precious time by agreeing to display a product line that I do not think will appeal to my customer base or draw a new demo I’m trying to reach. Also, I have strict guidelines in place to protect myself, my customers, and my Artist Consignors. I take very good care of my Artist Consignors.

    It sounds like many of you have had negative experiences w/ shops taking advantage of your creativity. But don’t give up yet! There are stores out there, just like mine, who will welcome you and take very good care of you and appreciate the hard work you have already put in. If you are interested in finding a shop like mine (resale/consignment) in your area, you can check out http://www.tgtbt.com which has a listing by state of resale and consignment stores available for free.

    Good luck and blessings!

  • Jade said:

    My company focuses on up and coming clothing and accessory designers where we sell everything on consignment. However, I agree that 50% is too much and therefore we take a smaller percentage to encourage our designers to do business with us again and use that money to build their brand.

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