Wednesday, April 21, 2010

Selling on Consignment

A CCCOE member had asked about consignment to an out-of-state shop. I posted the following thoughts in reply to her question, and thought I would share them here too.

I have had problems several times over the years when consigning to an out-of-state shop. Personally, I wouldn't do it. Period.

Consignment is a great deal for the shop owner because they don't have to put out any of their money in order to get your product. Unfortunately, this may also mean that they don't have any interest in promoting it in the shop. If they sell a mixture of consigned items and items which they have purchased outright (wholesale), their energy will most likely be focused on selling the items in which they have an investment.

However, if you're determined to consider consignment, here are some thoughts ... in no particular order.

The artist who posed the question indicated that the shop wanted the items for one year. I suggested that she ask why they only want your items for one year. If the same items are sitting in a shop after one year, chances are they will have been relegated to the back of the shop (storeroom) long before that time.

If the time comes that your items need to be returned to you (after the one year or whenever), who will pay the shipping cost? Will they be packed securely to withstand the shipping process?

Ask how long they have been in business. If they've been in business less than a year, think twice about consigning to them. If they only do consignment, and don't purchase any of their inventory outright, it would be preferable if they've been in business 2 or 3 years. Consignments shops are super-easy to start since there's little investment beyond the rent and utilities; unfortunately this also means they tend to come and go very quickly!

Ask if they have a web site and check it out -- does it look professional or amateurish? Would you trust a web site that looked like that? Would you trust a shop that has a web site that looks like that? If they don't have a web site, ask them why not. EVERY business should have a web site these days, even if it's purely informational and not set up for online sales. Since you can't visit the shop in person (or if it would be difficult to do so), you need to have a feel for the shop.

Make sure the shop or boutique is the type of place you would want to see your product in, i.e., is it also a hardware store or a baby boutique? If you create art which appeals to this clientele, then GREAT!! But if you don't why would you want to show your wares in this type of shop? Over the years, I've received inquiries from some very interesting places (including car washes) that have absolutely nothing to do with the type of work I create.

Do they get an adequate amount of traffic? This may be hard to judge long-distance. If they're in a mall or a busy pedestrian area (i.e., 4th Street in Berkeley, shown in the picture above), they'll get plenty of traffic. If they're in a rural area, maybe not so much!

Ask what percentage of commission they want. If it's 40% (which is fairly common these days), you'd do better off wholesaling, even if you had to give them 50% off to do so -- at least you'd have your money and wouldn't be worrying about whether or not you'd ever see your product again (or payment for it).

Ask if they have a contract stating their terms. If they don't have one, could you write one up and would they be willing to sign it? You need to have something in writing, signed and dated by both parties of course,
regardless of which one of you writes it up.

Be sure you know how often you will get paid, and be prepared to hold them to it. If they can't pay you for your sold items at least once a month, there's likely something wrong (i.e., if they only want to pay quarterly, they're probably hoping you'll forget about them before three months have passed).

Don't consign more than you can afford to lose, should it disappear forever w/o compensation; everyone has their own threshold here, whether that's a dozen pieces or $1,000 worth of product.

Hope these thoughts help ... good luck!

1 comment:

Shell Mitchell said...

yeah, I would pretty much never consign out of state to someone I don't know personally. too many horror stories out there! Consignment can be great - I think it's all about the relationship you build with the shop owner/staff and it's hard to cultivate that relationship across state lines.