Consignment

[candlesinflorida]

I know consignment has a lot of negatives...I get why. With that said, I agreed to do consignment for two friends I have known and like. One owns a salon and the other has a store. I already agreed to consignment so I def don’t want to revisit that issue, but just wondering what percentage I should state. I want to take the highest percentage I can. Any suggestions? 70/30? 60/40? 80/20?? 50/50 doesn’t seem right bc that is basically wholesale pricing and that involves way more risk for the store. 

[MilosCandles]

I do various consignment agreements.

 

One is 60/40,  others I "Rent Space" and they take 10% to cover credit cards fees and have a little incentive in selling also.

 

Because of the type of candles I sell I almost prefer consignment, it is so much easier for me.

[franu61]

I have a  wholesale account and I occasionally put out some items on consignment.  They get 20% on the consignment.  Another account: consignment items in a non profit gift shop,  they get 25% . I had an account that got 30% consignment. I was not happy with the 30% account for a number of reasons.   I would personally not go higher than 30% on consignment.

[BusyBee]

On 12/12/2019 at 7:53 AM, candlesinflorida said:

I know consignment has a lot of negatives...I get why. With that said, I agreed to do consignment for two friends I have known and like. One owns a salon and the other has a store. I already agreed to consignment so I def don’t want to revisit that issue, but just wondering what percentage I should state. I want to take the highest percentage I can. Any suggestions? 70/30? 60/40? 80/20?? 50/50 doesn’t seem right bc that is basically wholesale pricing and that involves way more risk for the store. 

It should depend on who you are dealing with, and what you are trying achieve out of those accounts.  I have just started my business, and I am hoping and planning to do 8 consignments by end of next year.  I am going to offer them 34/66 split.  Yes, you read that right.  I am keeping only 34%, and the reason is this.  I am using consignments strictly as my stepping stones to growing my brand rather than trying to make a lot of profit out of them.  I just got a big non-profit account backing me up, so I am ready to contact famous resorts, hair stylist, beauty salon in Beverly Hills CA.  In your area which is Florida, what kind of percentage split would you offer to places like Four Seasons Hotel at The Surf Club Spa if they are interested in carrying your candle?  Any 10oz candle should be easily retail at $60 to $80 in their shop.  

 

As for your friend who owns a salon, what level of salon does she operate?  If she has high end clients including celebrities, then I would be satisfied at 50/50.  If she is not a high end salon, then I would use her as my reference to approach higher end salons and do 60/40 with your friend because she is your friend after all.  For all other consignment accounts, I would try to settle around near 75/25 split +/- 5%, but you should be open to any kind deal.

 

 

[Shari]

I did consignment twice.  The first business ended up closing overnight after 2 years and took all my product and never heard from them again.  They blocked me on social media and didn't respond to emails.  Wasn't enough to take them to court but won't ever do that again.  It was 60/40.  I would never ever go lower than that personally.  You deserve to be paid for your time and work.   The second just wasn't worth the hassle after a year so didn't renew the contract.  It was 70/30. 

[kandlekrazy]

Our agreement is 37% commission on consignment items if it takes floor space and 27% if it hangs from ceiling or wall but we know what sells so don't take much in.   In a small shop where you probably will have 1 small rack I think the shop should get 27-30%.  it's not just the consignment fee but they will most likely pay a cc fee on each transaction.

[candlesinflorida]

On 12/13/2019 at 9:01 PM, BusyBee said:

It should depend on who you are dealing with, and what you are trying achieve out of those accounts.  I have just started my business, and I am hoping and planning to do 8 consignments by end of next year.  I am going to offer them 34/66 split.  Yes, you read that right.  I am keeping only 34%, and the reason is this.  I am using consignments strictly as my stepping stones to growing my brand rather than trying to make a lot of profit out of them.  I just got a big non-profit account backing me up, so I am ready to contact famous resorts, hair stylist, beauty salon in Beverly Hills CA.  In your area which is Florida, what kind of percentage split would you offer to places like Four Seasons Hotel at The Surf Club Spa if they are interested in carrying your candle?  Any 10oz candle should be easily retail at $60 to $80 in their shop.  

 

As for your friend who owns a salon, what level of salon does she operate?  If she has high end clients including celebrities, then I would be satisfied at 50/50.  If she is not a high end salon, then I would use her as my reference to approach higher end salons and do 60/40 with your friend because she is your friend after all.  For all other consignment accounts, I would try to settle around near 75/25 split +/- 5%, but you should be open to any kind deal.

 

 

I like the way you think! Go high-end or go home lol! Agree!!

[candlesinflorida]

Thanks everyone-this is super helpful. I am going to re-read everything and make some decisions.

[SuzyK]

I'm with those on the 60/40. I hope it works out well for you.   Sounds like it might be ok since it's your friends but I would have a clear contract. Especially when it comes to damaged or returned products.  

I've done consignment many times and each time I kicked myself because I was burned each time. The last time I sent products to a business and never heard from her again. I was so mad, I didn't even try to go after her.  And like Shari, I also had another company go out of business overnight without telling anyone.  I will never send products out without payment again.