when do you draw the line?

[JI]

I have two wholesale accts and one consignment. The two wholesales are doing well. Customers are happy and I keep getting reorders, even post xmas. With the consign acct I had originally pushed wholesale. But they wanted to consign as a short trial through xmas. They are good with paying so that is fine. They thought sales were good. It is a small grocery store geared toward health food and sales were averaging $125-$150/month. This is based on the amount they got from customer. I got 60%. They carry my small candles. Not sure what you all think of those numbers. Now we are in new year and they still want to consign!! I told them that i would bring in new scents for the new year, assuming they would wholesale. But no. Consign again! Do I consign through Jan and then draw the line? Or do I draw the line now?

Edited January 4, 2013 by JI

[David Fields]

Draw the line now. If you troll the board, you will find that very, very few people have much success with consignment. Except for the consignees. For them it's a no-brainer. No up-front costs, no inverntory costs. If there is breakage, theft, aged products, they don't eat the cost. You do. So, on a $ 10 candle, you get $ 6, they get $ 4. You cost is say $ 3. So, you clear $ 3. All the risk is yours, and they get as much or more than you do. As you can tell, we never had much luck with consignment; it usually worked well early on, but never for long. We still have people ask us if we take consignment. My advice to you is to tell them wholesale only; that was the original agreement. If your products sold well for them, they should go with wholesale, unless they are operating on a shoestring budget, which is probably the case since they wanted consignment in the first place. Warning bells go off for us when someone asks fro consignment; it means to us that they will be a small customer for a short time before they fold. HTH

[Noodle]

I agree to draw the line now. You have your terms and if the client is not accepting of those terms, you need to move on.

[ChrisR]

None of us can tell you what kind of customer you have, only you know that. I've had a consignment agreement with a store for several years and we both make money and I've had no problems with them paying or taking responsibility for thefts or breakage. I think 60/40 is a little high though and have a 75/25 agreement in place. If it's a small store without a lot of capital to do wholesale, they are good at paying, etc. I say keep it consignment until/or if you start seeing signs of a problem. In today's economy a sale is a sale and money in my pocket. Good luck with your decision!!

[Noodle]

There already is a problem. The client is not respecting ironrose's wish to wholesale. Ironrose gave in (which I would not have) and permitted consignment on a trial basis. The client is now backtracking on the orginal agreement and is ignoring ironrose's selling plan which happens to be wholesale. They simply do not want to put out the money and are clearly disregarding the policies of the seller. You have to be blind as a bat not to see the problem looming already. The client needs to find someone who readily consigns and who is fine in that atmosphere. Ironrose is clearly not comfortable in this consignment arrangement or else she would not have been pushing wholesale in the first place.

Edited January 4, 2013 by Noodle

[Beth]

I have two wholesale accts and one consignment. The two wholesales are doing well. Customers are happy and I keep getting reorders, even post xmas. With the consign acct I had originally pushed wholesale. But they wanted to consign as a short trial through xmas. They are good with paying so that is fine. They thought sales were good. It is a small grocery store geared toward health food and sales were averaging $125-$150/month. This is based on the amount they got from customer. I got 60%. They carry my small candles. Not sure what you all think of those numbers. Now we are in new year and they still want to consign!! I told them that i would bring in new scents for the new year, assuming they would wholesale. But no. Consign again! Do I consign through Jan and then draw the line? Or do I draw the line now?

Tell them Christmas is over. Time to wholesale.

[pixie]

I would draw the line now and not give it a second thought.

[Mala]

I too say to draw the line now. The trial period is over, Noodle explained it best IMO.

[SliverOfWax]

Yeah, well, I drew the line against consignment about 20 years ago. I've had one consignment account, it didn't end well, done! For consignment to be successful, you've got to be extremely firm with an iron-clad contract. Even then, if something goes wrong, you get to spend your money and your time taking them to court. Not worth it.

[JI]

Thanks for all your insight. Esp noodle, you put it so clearly. It is that fine line with wanting to please the cusomer. If i had to do it over again, i would have said no to consign, and then just be flexible and lower the case minimum as a one time trial. I will be talking with them this weekend. Thanks to everyone. You made me more confident. I will let you all know what happens.

[Candybee]

Draw the line now. If you troll the board, you will find that very, very few people have much success with consignment. Except for the consignees. For them it's a no-brainer. No up-front costs, no inverntory costs. If there is breakage, theft, aged products, they don't eat the cost. You do. So, on a $ 10 candle, you get $ 6, they get $ 4. You cost is say $ 3. So, you clear $ 3. All the risk is yours, and they get as much or more than you do. As you can tell, we never had much luck with consignment; it usually worked well early on, but never for long. We still have people ask us if we take consignment. My advice to you is to tell them wholesale only; that was the original agreement. If your products sold well for them, they should go with wholesale, unless they are operating on a shoestring budget, which is probably the case since they wanted consignment in the first place. Warning bells go off for us when someone asks fro consignment; it means to us that they will be a small customer for a short time before they fold. HTH

That's what I was thinking too. Still wanting to consign after the terms were already laid out to them before the holidays is a definite warning sign!

Lots of businesses are folding and this is exactly what happened to me. They wanted to keep doing consignment. I found out why-- the hard way. Fortunately I lost only a handful of candles so no biggie but that was the end of consigning for me.