Selling on Consignment?

[whitnick]

I was approached at the market last week by the owner of a store here in town that was interested in carrying my tarts in her store on consignment. Does anybody have any experience with this? She wants me to come in her store to talk about it but I have no idea as to how this works and what part of the sale she would get, what is a fair split etc. Any help is greatly appreciated.

 

Thanks!

 

Angela

Smithfield Scent Shop

[TallTayl]

Consignment, in my experience, was not worth it. The store owner has no incentive to sell, promote or even care for your things. Your inventory is tied up without necessarily generating income for you, aging and becoming shop worn.

Consignment is a great deal for the shop owner, who gets free stuff to fill their shop, but not always so much for the manufacturer.

Everyone does consignment at least once, learns what lessons the experience carries and moves on from there. Some, i hear, do very well. Personally, i prefer wholesale.

[Guest OldGlory]

I agree with TallTayl. I would suggest that you go to her store and counter with a wholesale deal (assuming you have a business license).

Figure out before you go:

1. how many per fragrance you would consider your minimum (and worth your time) and how many total for a minimum order

2. who does the labels - you or the customer? and what will you charge for labels?

3. what the payment terms are - cash on delivery?

4. what the order turnaround time is - 2 weeks?

5. how often you will deliver - once a month?

6. insist on orders in writing - email is fine

7. what is your return policy - NO returns?

Take a tablet and pen with you to write down any questions, and tell her you will get back with her in a few days. And be prepared to take an order that day - in fact, don't leave without asking her to place an order right then and there. Good luck!

[Candybee]

I did the consignment thing a number of times and won't do it again. I much prefer wholesale and if a shop owner wants my stuff in their store and they don't have the money for it it is a red flag to me. But thats just my experience.

 

There is some very good advice here. If you want to do the consignment thing know in advance what you expect out of the arrangement, have an agreement plan, and put it in writing. Keep in mind if this business goes belly up you could lose your product or they may not pay you for product already sold if they are bankrupt. Its happened to me and it sucks to get burned that way.

[emilyspoppy]

ALL OF THE ABOVE IS GOOD ADVICE, IMO. I NOW REFUSE TO DO CONSIGNMENT, OFFER TERMS OR MAKE "SPECIAL/CUSTOM" PRODUCTS WITHOUT A 50% NON-REFUNDABLE DEPOSIT. THE ONLY EXCEPTION HAS BEEN MY SISTER-IN-LAW. SHE'S ALWAYS BROKE, BUT PAYS TIMELY AND HAS SOLD A LOT OF PRODUCTS.

 

DAVE @ CHARLOTTE HALL COUNTRY CANDLES & SOAPS

[SuzyK]

I've done consignment a few times and like everyone else said, I will never never do it again.  I lost money each time. I kept thinking that "this" time would be different.    I've heard some people who have done just fine with it but I was burned every time.    I also had one go bankrupt and I was fortunate enough that another vendor found me and let me know so I could go get my products.  It was only wax melts.  Most of them were damaged and I had to sell them at a discounted price.

[Trappeur]

I agree with what everyone said above whole heartedly.  If by chance you have not made up your mind, I'll tell you what I do.  But in my opinion I would go with everyones suggestions as it is all very good sound advice.  I have done consignment in the past and rented space and I was lucky and never got screwed.  But I'm a pretty stern stickler how i wanted my merchandise taken care of if it was on consignment.  I've only done it a few times as I generally wholesale to select shops. 

 

1.   First off, I did have signed paperwork

 

1a: I gave an inventory of what I brought into the store each time.  If something was not accountable on the shelf (meaning stolen), I wanted to be paid for it.  I'm putting all my labor and dollars into the goods and am bringing into a shop and displaying it beautifully so the least they could do is reimburse me for the missing item.  I looked at it as the cost of doing business for them.  Why should I be out of money?

 

2.  Since I was the one putting my goods into a shop, I wanted it taken care of.  I wanted my displays to be right up front by the register as impulse shopping and checking out at the register by the customer would bring a quick sale (last minute of a candle or two) as they were standing in line to checkout.  When I had my store, my candles were right there in the front by the register and all the candles I sold paid for the rent on my store 10 times over.  They were a beautiful little money maker for me.  

 

3. I would not agree to my candles in the back of the store or scattered around on different shelves or areas.  

 

4.  I made it my business to come to the store each and every week, sometimes twice a week to straighten out my displays of candles, meaning dusting, turning the jars all around face forward so the labels always showed.  I found most stores (employees) don't take the time to keep the candle line all organized and polished.  I've always been a stickler for presentation, presentation.  I'm proud to say that my displays that not only included candles, but candle accessories and I incorporated all these accessories in the shelves of my candles like little vignettes.  I always made them very eye catching.  I would put for example a beautiful placemat under a few candles on a shelf to set the theme and ambiance.  I also would make up tester little samples for the customer to smell the fragrance.  And labels are soooooo very important.  A great looking label on a candle means a quality product.  If someone takes the time to create a beautiful product, why not finish the product with well thought of beautiful label?  And also if the store will do it, I would make up a few sample candles or melts for the store to burn on their counter for the purpose of promoting my product.  That is a cost to me.  

 

Also you would be surprized on how people who work in stores (employees) don't know how to burn a candle propery.  You need to give them a lesson on lighting, letting the candle get a full melt pool across, clipping the wicks and not dropping the clippings into the wax, how long to let the candle burn b/4 putting out and how to extinquish properly.  I always did this each and every time give my speel.  And no matter how many times I gave this speel, they never really listened as when I would go in to check on my candles I would see these dirty nasty candles that they had burned and never clipped the wicks.

 

5.  In an agreement I always asked if I could be paid weekley.  Most places that I have come in contact with, pay monthly, but being that I have to keep supplies on hand all the time I need working capital and waiting once a month is really too long a wait for money.  Good luck on that part.  And if not weekley, then the most would be biweekly.

 

I was fortunate to have been in a few shops that we got along beautifully and we worked together beautifully.  It could be a win win situation.  It could also turn the other way like everyone said above.   The one good thing about consignment versus renting space in a mall or booth was that you don't have a monthly booth rent. And you could be an asset to the shop too.

 

Also when I did do some consignment it was DEFINITELY not 50/50 but 10 to 20% to them and the rest of the money was mine.  I set my prices....not them. I even brought my own custom shelf unit which I made and painted generally in a black worn finish and detailed in birch bark, pine cones,  and even some of them had antler on the shelf unit which was generally 4' wide x 5 to 6' tall.  And I even had to price my displays because most of the time people wanted to buy them...but I took orders on them for custom work.  Actually I'm doing something like this right now.  Since I closed my shop and my husband died I've been wanting to get back into this field.   It's been a slow process and sad, but I'm happy doing this.

 

  Like I said, your probably better off not doing consignment because of all the things that happen but just in case you aren't really sure and want to give it a whirl, good luck.......and you should go and check out this store and see what it looks like first too.  Maybe you won't want to even be there.

 

Thanks for taking the time to read this.

 

Trappeur 

Edited September 8, 2014 by Trappeur