Craft Store Opinion

[Cindys]

A woman was advertising in our local paper that she need vendors for her new store. It will be in a plaza that does great bussiness. The space is 10x8, and here are the stipulations. It is 125.00 a month. Plus 20% of sale on cash items. 25% on charges.No contracts,no working, you get paid every 2 weeks.All sales tax goes threw the store.My freind and I would share one space. She does hand painted wine glasses and wood holders for the glasses and bottles of wine. I do my candles. As long as it looks all together the woman does not have a problem with us sharing. My husband is going nuts. Again he thinks this is a stupid idea. Is it stupid. Please be honest. It wouldnt be the first time he was right LOL

[BLSoaps]

Honestly, that sounds insanely high. Especially since she isn't established. It sounds like she wants her vendors 'booth fees' to cover her expenses, which will leave her with little incentive to do much selling for you.

However, if there's no long term contract, I don't see the harm in trying this out for a month or two, as long there is nothing that will penalize you for pulling out without notice, or very little notice. I had a consignment store go bad on me, and I had to threaten reporting her to the BBB before I got my last 'paycheck' from her.

I'd talk seriously to your friend, before going into this. You'd need to have an agreement that either of you can pull out at any time, and with no hard feelings. If she's doing well, and you're not, you don't want to ruin your friendship by pulling out, forcing her to pull out. Or vice versa. I see more long term negative issues with sharing the booth with a friend than the lousy consignment details. If the consignment deal sucks, it's easy, you pull out. But you could run into problems with your friend, that as much as you might wish otherwise, could cause problems down the road.

I also wouldn't agree without a signed contract. Even if it's just detailing the consignment terms, and payment terms. Otherwise, if she's late paying you, you don't have a leg to stand on if you want to go after her.

What I'd probably consider, is seeing if she'll go for lower rates (I'd go booth rates, not the percentages part) for the first 1-3 months, until she has established business. Just being in a good location isn't enough.

Also, ask her what her advertising plans are. YOU DESERVE AND NEED to know this. I've seen a lot of these places open and close over the years, and it's usually due to lousy management from the business owners. If they had a full store, the vendor's rent usually covers all the owner's overhead costs (lease, electric, etc). But if they don't get buyers in there, they lose their crafters, because things aren't selling. And if they don't have enough crafters, they can't even cover their own expenses. They go in thinking it's easy money, but it's not.

I'd talk to the owner, she what she has planned for advertising, how she plans on bringing people in besides general foot traffic. You'll probably have a much better feel of things after that conversation. If she refuses to tell you, it's probably because she doesn't have anything planned, and doesn't want to admit it. And then I'd run as far away as I could.

And talk long and hard with your friend. Go through all the different scenarios you can think of, and how you'll want to deal with it.

Good luck, with whatever you decide to do!

(sorry if this sounded like an incredibly down response. There's a lot of risk in consignment, and most have rarely found it worth it. Some have though, which is why it isn't completely written off. But basically, doing consignment rather than wholesale makes things safe for the store owner. While I make more off of consignment, I'd choose wholesale anyday over consignment)

[showoffs]

If I was given this opportunity I would jump on it in a heart beat. It is right in line with the good craft shows, (they charge $45 + 20% for 4 days). With my other business, (I design and custom make horse show clothing) I usually pay between $100 - $250 for my booth for a 3-4 day show. Then I have to do a lot of work setting up and taking down. I also have to collect my own taxes as well as the rest of the money.

Not having to work there is a great bonus. Just think of all of the extra time it would take to do that.

If you break it down, $125 per month is just over $4 per day. It would cost me more in gas just to drive there each day if I had to work there, and the 20%-25% is just the cost of overhead, rent, employee salary, electricity, phone, credit card fees, ect. Your products will also get great exposure, where you would not normally get it.

Shannon

[sockmonkey]

Those prices sound very steep to me. I have some things in a couple of different booths. One place charges a flat $100 per month--no commission, or anything on top of the rent. Another place charges $175 per month. They charge 7% commission. This place is on the interstate and will typically have over 30,000 visitors per month. They are open 7 days a week, advertise on billboards, the internet, specialty publications, and sometimes on tv.

Before you commit, take a look around. Are there a lot of empty booths? What is the quality of the other merchandise for sale? If the plaza is busy, is her shop busy too? How many customers do you see in her shop? Try to talk to some other booth renters to see what kind of sales they're generating.

You might ask her if her commission is negotiable, because it sounds unreasonable to me, in consideration of the rent.

[HeavenScentU]

I think if you really want to try it, you should. I have been speaking with some business owners and that seems to be the going rate for high traffic areas now.One store owner gave me a price of $250. for 3 months plus 25% of total sales. I was sticker shocked but I can see it. Store owners have to know you are serious about your products. And with that price you better have good products. But take a look at your inventory and see how much stuff you have to sell to meet the rent. Good luck!

[ScentsandMore]

I think that sounds high. I have a booth in a shop on a very busy street in our city and pay a flat $120 per month. I think it is 10 x 10. If you don't have to sign a contract for x number of months, try it. You can always pull out. If I decide to pull out I have to give them one months notice.

[TexasBrat]

I think it is way to high and I would tell her too. Tell her you will sign up for $125.00 and no extra fees. Or you'll pay $65.00 plus the fees. If she says no, give her your phone number and wait for her to give you a call. That's what I would do.

Also, I wouldn't go in with a friend, that is asking for trouble. If you do well she will be upset and not want to pay her share and will tell you to pay more of the booth rent. yada yada yada

[bugtussle]

I also think it is WAY too high. Think about it this way. You have a candle which wholesales for $5. If you sell it there for $10.00, she gets $2.00. You make $3. To pay your half of the rent, you have to sell 67.50 worth before you start breaking even, that is 22+ of your candles to break even. Do people know your product well enough to buy that many? I would hold off for sure till fall. Maybe then she will come down on her fees. Ask me how I know all of this? I signed a 6-month lease. Lost my "rear" every month. Will never do it again. Carole

[ah-soy]

Last year I rented a 4' by 2' booth in a large chain craft mall. It had opened in September of 2005 and I went in after Christmas fully knowing I had missed peak season, but figured it would be a learning experience and the longer I was there, it would give my products exposure leading up to the next peak season. I live in a large city and this was located in a very high traffic area.

I believe my rent was $85 plus they took an 8-10% cut. The store was huge and I would say about 3/4's full. By March they were out of business as they did not have the holiday season they hoped for. They actually closed all of their stores throughout the country. They did notify us and gave us about a week to come in and get our stock out but I did lose my deposit and other fees I'd paid for signage etc. The manager said that it seemed the economy just wasn't supporting this type of business.

I would love to find another place like this, but there just aren't any around. I figure sooner or later one will make it. One thing I can advise though is to be sure you have a firm agreement in contract form. If it's month to month and not a long term lease, I would probably give it a try.

[LynnS]

I am checking out a place next week. Was going this week but a death in family and granddaughters graduation. Very busy now. Will let you know more later.

LynnS

[doris]

I think it's quite high, they should charge one or the other, but not both. As for comparing the charges to those at a craft fair, a well run craft fair is likely to attract at least several thousand people, whereas a store is extremely unlikely to attract that many over a short period of time.

[Maggie]

I also did something like this several years ago. $50. per month plus 10% of sales. The owner was a well known crafter and had around 50 booths in her shop...all filled. Had to sign a 6 month contract and then it was month to month. I did well the first couple of months...then things slowed down. I then did really well in November and December. Someone told me that they had stopped by her shop several times to buy a gift and it wasn't open. A friend of ours lives about a block from the shop so I called her and she said she saw them carrying stuff out. So after several phone calls I FINALLY got hold of the owner and she said they had to close and that I could come by her house and pick up all of my stuff that they had stored in their garage. She DID give me all money from a few sales before she closed. But it pi$$ed me off that she did not call me and tell me she was closing shop.

I also would not share a booth with anyone. My daughter helps me at craft shows and I give her a percentage. Even if she did a craft of her own...I would NOT share a booth/space with her. Too many potential problems.

Maggie

[lindsaycb]

I say the amount is insanely high. I choked on the 20% fees on top of all that. YIKES.

[Fire and Ice]

JMO~ I would never share a booth!

I would demand to know how she came up with her rent and % quotes

I would demand a contract the outlines everything like stolen product, breakage and so one.

Go sit in this area and watch her store of an hour. How many people are coming out whith bags? High traffic is fine but it doesn't help if people are NOT buying.

Fire

[Cindys]

Wow Thanks for all your opinions.I am still not sure what to do. As far as my friend goes that is the least of my worrys. We have a friendship that is strange. We are actually closer than sisters and I know money would never pull us apart(we never have any)This woman has had 2 prior stores. One at the local mall. Barnes and Nobles took over the whole corner so she left. She went to one of our more classy malls and her store is small and rent is high. So she got a store at the plaza. I will ask her to lower the space fee. Also how she is going to advertise. I think what I will do is go over these blogs and write down all my questions and see how she answers.Then I will make my mind up. I just have so much stock and no shows untill July. Any ideas on anything else to sell my stuff. Thanks for all your help

[Suef]

Okay, this may be a bit long...It is not a stupid idea, as long as you do your research and are comfortable with what you find. We opened a craft mall in our town last year. The booth fee you mention would be considered reasonable here in Michigan, but the commission is extremely high, 10% is the standard here. The store makes its money from booth rentals, and those rentals should be calculated to cover the store's own rent, utilities, advertising, and eventually owner income... hopefully we'll see that last one at some point! The commission helps offset things like credit card fees and returned check charges, and 20 to 25% is pretty outrageous.

Since the store's income comes from rentals, empty booths are bad business, and being new, she might be willing to negotiate booth fees to get her booths filled.

You got some excellent tips already. I would add, find out what you're able to do in terms of setting up/decorating your booth. Some will let you paint, some won't. Ask if there is any incentive for committing to 6 months or more... it always surprises me when people pull out after one month because they didn't make their booth fee. Your booth is your business, and like any business, it takes time to build a customer base and repeat business. if you're not willing to commit to 6 months, you probably shouldn't do it.

As a prospective new vendor, feel free to ask (not demand) just about anything. If SHE doesn't demand a contract, run. I promise you she stands to lose much more in uncollected rents and the cost of chasing down late payments and storing abandoned merchandise than you ever will with damaged or stolen merchandise, she needs a contract to cover herself, and any legitimate craft mall will make every vendor sign a contract. And don't be surprised if the contract states the store is not responsible for lost or damaged merchandise, that is standard here too. Insurance companies here will not cover merchandise which is not owned by the store, so vendors can insure themselves or take their chances, just as they do with craft shows.

Finally, keep in mind that there is a difference between a craft mall and a consignment store. A craft mall is a series of subleases. We rent space to a vendor, and that's their store... they can paint, decorate, set up their display however they like, and it is up to them to maintain it, keep it stocked, clean and attractive. The store's job is to get traffic into the store, but it's the vendor's job to get that traffic to THEIR booth. We have three candle vendors, myself and two others. Do I push my stuff over the others? Of course not. The store can't succeed if our vendors don't succeed. My candles are a whole separate business and I pay the store, just as every other vendor does. I do extremely well now, but it took 3 months before I made my booth fee. I offer frequent specials, check and replace stock once a week faithfully, played with pricing until I hit on a price level that moved my merchandise, decorate my booth for the holidays and seasons, etc. Every customer at every craft show gets a flyer with a coupon they can use on my items at the store. Another candle vendor does very well also, and she's very good about checking in and maintaining. The other vendor sells very little. She is nearing the end of a 6-month lease, and I've seen her twice, and her booth still has xmas gift baskets in it. She calls constantly to see if she sold anything and always has a nasty comment, because her sales are so low.

Sorry so long, I am always interested in the "craft mall" threads, and hearing all the different concerns and opinions and seeing the different rates around the country! It can be a lot of fun and very rewarding... or not! Never know till you try. Good luck whatever you decide!