Consignment, possible wholesale!

[Jillsthings]

Okay, I am very leery about consignment after reading the forums, but I agreed. Her idea is to do consignment for a couple of months, see how they sell, and then we'll switch to wholesale. We haven't written anything up or signed anything yet, just a verbal agreement. We'll get all that figured before I get everything together and actually do my display.

Anyhow, it's at a local florist. In fact, it's the florist my husband has been using for the past 11 years, so I'm extremely excited that she is willing to have my candles in her shop. She's never done consignment before either, so this is a whole new venture for us both. My prices are low to begin with, so my wholesale prices are about a 30% discount (which puts me at or just below double my cost). I'm thinking for consignment, I don't want to give more than 20%. I plan to offer 15% first, see if she'll take that, then go to 20% if needed. Does this sound reasonable?

She already has a paper with my wholesale prices, so she is aware of those, along with the percentages, so I'm sure she'll understand if I don't want to do 25% because then what's the incentive to go wholesale? The only other option is to raise my prices, which isn't really doable in this area and with the economy what it is.

Any advice or info for me? Thanks!

[JI]

I was in the same situation where they were trying to talk me into consignment. I was trying to pitch wholesale with minimums of four cases (one case is 12 candles). Finally we agreed to do a "trial" case at wholesale pricing of four different fragrances. She said if it sells, we'd go to standard wholesale with wholesale minimums.

Just an idea for you. The cost of a case of 12 is relatively low, with wholesale pricing and if it is just a trial case, maybe it's not a bad idea.

[NaturallyTru]

I do pretty well with consignment at a business that has two locations. When we started I gave her 25% after I had done a search on what is average. After the first year she raised her consignment to 30%. My wholesale price cost x 2. On my jars I do not get a full 50% more; but it is what I have to do these days and hope volume makes up for it. The only thing I hate about consignment is my $ sitting on a shelf waiting to be sold. I have a ttal of 4 consignment locations and that is a lot of inventory. But then I get a bigger percentage with consignment. <sigh>

I have a $150 minimum for wholesale 1st order. $100 there after. I also have minimums per item. 12 jars, 5 melts same scent (1 batch) and 8 votives same scent (1 batch).

Edited May 30, 2012 by NaturallyTru

[Jillsthings]

Thanks! Our trial will be 3 months, see if it goes well, then we'll talk wholesale. The biggest thing she is worried about is that she doesn't have a whole lot of foot traffic. Most orders are placed over the phone. I understand that, and my main reason for wanting my candles in a shop is so that when people ask where they can get them, I can tell them to go here, rather than me having to meet them somewhere that's convenient for both of us, as I don't want complete strangers coming to my house. :-) Now my head is hurting from all the research I've done, figuring out who remits the sales tax to the state, do I need to get a copy of her sales tax license for when I pay my quarterly taxes...so much to research and get together within the next couple of days. I'm hoping to have everything ready to go over next week and set up. I've already got tons of candles and melts made up from the craft shows I've done this year, so I'm good for now on that, lol. :-)

[classiccandle]

I've never done consignment before and I applaud your success but since we are going into the historically slow season for candle sales I would feel it necessary to inform her of that and ask her not to make a judgment based on summer sales. Perhaps you could go back to her and ask for a six month consignment? It's your business and I'm not trying to tell you how to run it but I'd rather go with six months and have a better chance of getting the wholesale account than go with three during the slow months and possibly lose the wholesale account based on those sales.

[Jillsthings]

She actually did mention that if they don't sell well, we can try again during the holiday season. She was very friendly and understanding of the fluctuation of sales during certain times in the year. :-)

[Lorelei]

Plan on damage! If you sell body products provide testers so they don't use the actual product! Prepare that people may drag their nails through wax or break tarts to get them open to smell them. Because the owner can't watch at all times, this will happen, guaranteed. Work out something with the owner about damage in advance. We had label damage too and once that happens people will not buy the product even on clearance.

[Jillsthings]

Yeah, I'm a little worried about damage. The good thing is, her shop is super small. One room, shelves are all against the walls, so it's just an open space, maybe 15X15. I plan to put up a sign asking people NOT to open the clamshells to sniff. I'll have cup tarts there for that, much easier and cheaper if they break. Or even the little scalloped tarts. It'll be mostly tarts, and then some candles, too. Tarts are so big right now in this area. My husband went to his friends house last night and took a box of tarts with all my different scents for the guy's wife to sniff. They ended up buying a few to try out. They were shocked how much cheaper I am than Sc*ntsy! I've had a few repeat customers after they purchased a few to try at local craft shows. :-)

[NaturallyTru]

I have never had anyone damage my consignment items. I guess maybe I've just been lucky?

[Lorelei]

Really lucky. Mine is in a small beautiful upscale salon, and still damage. Even perfume with testers out, they break seals on the perfume bottles! Yikes. I saw one woman do it when I was there. I told the owner and luckily she bought it for herself. They are in a corner on a high table so it isn't kids doing it I have spray testers, scent descriptions out, and wax cups so they can sniffy. Silly people!

[SliverOfWax]

Plan on damage! If you sell body products provide testers so they don't use the actual product! Prepare that people may drag their nails through wax or break tarts to get them open to smell them. Because the owner can't watch at all times, this will happen, guaranteed. Work out something with the owner about damage in advance. We had label damage too and once that happens people will not buy the product even on clearance.

Yep.

I did consignment once, many years ago. The store owner moved my display of candles to the west side of the store in front of a window. In the summer.

I vowed to never do consigmnent again and never have. Once was more than enough.

[LynnS]

I do consignment with our local Art Center.They only make 20%. What I do is advertise on my site and tell people where they can get my candles.Like you mentioned meeting people is a hassle. This way they go straight to the business that carries them.

I have 2 wholesalers.One order over 100 candles 2 times a year.The other is just starting by doing craft shows and has a website.

I think how you are doing it is the way to go.Good Luck!!!!

LynnS

[LynnS]

Oh i must mention the one who does the shows and website just sent me back some candles that frosted over a month after we mailed them.She isnt happy so told her to mail them back but this is A problem with soy. One candle she sent back was beautiful. Not a thing wrong with the color but the lid was damaged.Now when we mailed them nothing was said about lid damage but those she mailed back and the others had frosting(all but the one).I am put back with this so mailing her the one candle back the same way and replacing the lid only.And for the other candles she sent back she sent them back with no label and how am I supposed to know what scent.I won't send her more and do all that work.I can't smell something like some candlemakers and determine what it is. I don't know what she expects.Oh and the flower pot votives (all lids were damaged) but had very minumum of frosting. She never said the lids were damaged.You could tell it was people taking the lids off and smelling them.She said her clients in her area are particular people but in all the years I've done candles none and absoluting none have looked like this even after a couple shows.

Oh and I offered her dye free candles since the frosting is bad(not what we did),She wants color.I will send her a email telling her we WON'T be responsible this time. She made the decision for color.She asked me what I thought and I told her You are thje customer.It's up to you.

Oh and she mailed me back the flower pot votives in a box 2 times the size.So I paid double for shipping.All of them would go in the $5.00 flat rate USPS box.

I am up in the air with this situation!!!!!!

Just a bit more insight. To you and others on the board.

.

LynnS

[Jillsthings]

Yeah, for now I'm staying local. I have only offered to ship to friends and family that aren't local (they still pay the shipping, of course). Once I get a good customer base here and feel comfortable enough with the whole process of shipping, then I'll expand. For now, I'm happy with the slow but steady growth I've been doing. :-)