lioness11 Posted August 26, 2012 Share Posted August 26, 2012 Hi all,Last week I got approached by a local business owner who wants to consign my body butter in her shop. She stated that they would take a 50/50 split :undecided and I would be able to set the retail price. FYI: This would be my first "brick and mortar" account.Upon further inspection, I understand that their portion of the proceeds is way too high for a consignment sale. She also asked me for a tester and I told her that would be fine BUT she would need to purchase the tester at my cost. I thought that was fair but she was like, "oh, I've never had anyone ask that of me".Anyways, I believe I may have to pass this account up. Any thoughts on how you would approach this matter. I meet with her in person on Thursday.Just not feeling really good about this at all now.Thanks! Quote Link to comment Share on other sites More sharing options...
ksranch Posted August 26, 2012 Share Posted August 26, 2012 Yikes!!! What kind of a business is it?? I mean, some businesses can get away with selling stuff at a higher price than others, but I seriously doubt she's making 50% on everything she sells! Quote Link to comment Share on other sites More sharing options...
ChrisR Posted August 26, 2012 Share Posted August 26, 2012 The couple consignments I had in the past with one I paid a small rental fee for the area I had plus 10% of the sales. The other was just 25% of the sales. Yep, I'd definately pass on her offer........way outrageous! Quote Link to comment Share on other sites More sharing options...
SliverOfWax Posted August 26, 2012 Share Posted August 26, 2012 (edited) My take is if you get to set the retail price, who cares what she gets? Just figure her take into your retail price. It sounds pretty much like wholesale except she doesn't pay you upfront.Having said that, I wouldn't do consignment for any amount of money. Did it once years ago, never again. The retailer pays upfront and it's theirs. I don't care what happens to it once it's in their hands. With consignment, it's yours until someone comes along and buys it. Even though you can't control mishandling, breakage, whatever, it's still yours. Nope, not gonna do it. Edited August 26, 2012 by SliverOfWax Quote Link to comment Share on other sites More sharing options...
Ravens Posted August 27, 2012 Share Posted August 27, 2012 Lioness11, imho consignment isn't worth the hassle. I sell wholesale, low min., and that's it. It's not my concern how much the shop owner chooses to charge her customers; and I don't have to deal with elaborate agreements (stocking shelves, theft... yada yada) Quote Link to comment Share on other sites More sharing options...
ksranch Posted August 27, 2012 Share Posted August 27, 2012 Agree - wholesale is better than consignment. But, when I was first starting the first offer I got was consignment. I took it - wanted to 'get out there' - and luckily, it worked out very well. Once the relationship was established, and products were selling well, it turned into a wholesale account, and she is still one of my best accounts. That said however, 50% is crazy. You should have your cost figured out, and therefore, your prices - wholesale and retail. If a 50% mark up from your price is going to make an insane retail price - nothing will move and everyones unhappy. jmho Quote Link to comment Share on other sites More sharing options...
missywick Posted August 27, 2012 Share Posted August 27, 2012 I would not do business with this lady. She seems to be trying to take advantage of you. Her responding that way to having to pay for a sample is crazy. Seems like she just wants everything for free including her inventory. You're in this business to make money for yourself, you're not a charity. As a business owner she can afford to BUY a body butter. Quote Link to comment Share on other sites More sharing options...
blacktieaffair Posted August 27, 2012 Share Posted August 27, 2012 I have to agree with the " I'd pass on the 50/50 consignment split" option. While consignment works really well for some, it does have a set of "conditions" that go with it that I'd just as soon not have to deal with. Constantly going by to check on the product, how it's holding up to handling , switching out products, the fact there are quite a few cases of stores closing without giving you notice, and running off with all your product AND your displays... and a ton of other things.While I have done in the past, and will do consignment with 2 stores that I have for years, know the owner, went all through school with her, and know her business ethics, If and when I get back full swing, I'll be going with wholesale, with a very low minimum for the first two orders, and then in my agreement, they will have to purchase a larger quantity. Quote Link to comment Share on other sites More sharing options...
FaithfulScenter Posted August 27, 2012 Share Posted August 27, 2012 This sounds very similar to the "deal" I had selling in my sil's shop, in which I got took. I would run, sounds like a rip off to me!! Quote Link to comment Share on other sites More sharing options...
JJCandlesCrafts Posted August 27, 2012 Share Posted August 27, 2012 To me, consignment helps the store so that they don't need to pay out for something that may not sell. Low risk for them, but with that low risk, there is a low reward of a percentage. Wholesale, they are taking the risk of purchasing without the "insurance" of being able to return what doesn't sell. The bigger risk here means a bigger reward for them - usually double your wholesale price. This "deal" sounds like they want the "pros" of both, without taking any risk at all. I feel that, at the least, it is unfair and a reasonable person would re-consider their stance if questioned. Note: People that want everything for nothing are generally not reasonable, and you probably have very little chance of working out a mutually agreeable arraingment.~ Joe Quote Link to comment Share on other sites More sharing options...
bells4shells Posted August 28, 2012 Share Posted August 28, 2012 I have a few things to say about consignment.First off, if your items are not priced where you would make any money after her half is taken, then it's not worth it. I had one consignment account that started at 30/70 and as her shop took off, she changed it to 40/60 which was totally fine. I had it good as in if there were issues with theft, etc. she took care of that. What ended the relationship (for me) was the lack of communication regarding what was still in stock for her. She normally sent me a monthly list of what sold as well as a list of current inventory. I also kept track of the numbers and things didn't match up. It was an innocent mistake, but the lack of organization and completeness was too much work to keep it going.Bottom line - do what makes you more comfortable, not what is considered the 'norm'. HTH Quote Link to comment Share on other sites More sharing options...
NaturallyTru Posted August 28, 2012 Share Posted August 28, 2012 My consignments are 30%. I wouldn't want to go higher than that....unless by pricing the candles higher, they still sell well. Then it would be worth it for me...I'd end up getting my same profit. Quote Link to comment Share on other sites More sharing options...
lioness11 Posted August 29, 2012 Author Share Posted August 29, 2012 Hey everybody,Well, I contacted the shop owner and diplomatically explained that I wouldn't be able to take her offer. I'm so relieved. It never felt right and I ALWAYS trust my instinct. However, all of your replies just help confirm my hesitancy.Whoo...I just think I saved myself from a nightmare. But I'm still optimistic that something better will come along soon! Quote Link to comment Share on other sites More sharing options...
ksranch Posted August 29, 2012 Share Posted August 29, 2012 It will... hang in there!! Quote Link to comment Share on other sites More sharing options...
lovemylabs Posted August 29, 2012 Share Posted August 29, 2012 I just saw this thread and wanted to add a comment. We are in eight shops and do both Consignment and Wholesale. Wholesale is nice because we get paid up front and it's usually a nice size order. We are in two Consignment Shops, and we do well with both of them. We price our products so, after the owners cut, we make at least wholesale...(one shop we make more than that). It's nice to get checks each month from the two shops. So the combination of both Consignment and Wholesale work for us. Something will come along for you for sure. As ksranch said...hang in there! Quote Link to comment Share on other sites More sharing options...
Candybee Posted August 29, 2012 Share Posted August 29, 2012 I only do wholesale now. But thats because I have already done the consignment thing. It never worked for me and the worst that happened was a shop that went bankrupt and I lost my products. So if you decide to do the consignment I would; 1. only do consignment with a shop owner I know and trusted; 2. have a consignment contract written up that spells out the terms such as when you get your money and who is responsible for damages and theft; 3. keep a constant vigil on your products and make sure you can take them back when you want if you see trouble ahead.My experiences have taught me to be very leary of consignment. Others have done well but I am sure that was due to having a great relationship with the store owner and a great shop that sells and cares for their goods.In all my consignment that I have done I have never heard of a 50% take. Sounds outrageous to me. Most shops in my area take 30% which I still think is high but every shop that I have checked is the same for my area. Although some have a rental fee along with their % take.Definitely don't consign with a shop you have a bad gut feeling about. Your feelings are usually right on aren't they?!! Quote Link to comment Share on other sites More sharing options...
HorseScentS Posted August 29, 2012 Share Posted August 29, 2012 I only do wholesale now. But thats because I have already done the consignment thing. It never worked for me and the worst that happened was a shop that went bankrupt and I lost my products. So if you decide to do the consignment I would; 1. only do consignment with a shop owner I know and trusted; 2. have a consignment contract written up that spells out the terms such as when you get your money and who is responsible for damages and theft; 3. keep a constant vigil on your products and make sure you can take them back when you want if you see trouble ahead.My experiences have taught me to be very leary of consignment. Others have done well but I am sure that was due to having a great relationship with the store owner and a great shop that sells and cares for their goods.In all my consignment that I have done I have never heard of a 50% take. Sounds outrageous to me. Most shops in my area take 30% which I still think is high but every shop that I have checked is the same for my area. Although some have a rental fee along with their % take.Definitely don't consign with a shop you have a bad gut feeling about. Your feelings are usually right on aren't they?!!A new consignment shop opened in my area last year, and when I told the owner I was trying to develop a candle line, he got excited and said if I put them in his store he would take a 25% cut. But, a month later when I was in there he mentioned he was now taking a 50% cut on everything. When I reminded him about the original offer of 50%, he double talked, and that really made me think he was dishonest and greedy. The shop seemed to be doing really well when it suddenly went out of business. Quote Link to comment Share on other sites More sharing options...
NaturallyTru Posted August 29, 2012 Share Posted August 29, 2012 When I started my candles in the eco friendly shop, she was new to business and had just opened. I offered her 25% and she accepted. I felt like I had lowballed her. Sure enough the next year she increased it to 30%; but she added another store! When I get asked by other places now I say 30% as I feel that is fair. 50% is wholesale. Quote Link to comment Share on other sites More sharing options...
Candybee Posted August 29, 2012 Share Posted August 29, 2012 When I started my candles in the eco friendly shop, she was new to business and had just opened. I offered her 25% and she accepted. I felt like I had lowballed her. Sure enough the next year she increased it to 30%; but she added another store! When I get asked by other places now I say 30% as I feel that is fair. 50% is wholesale.Exactly! Quote Link to comment Share on other sites More sharing options...
Mountain Soy Candle Posted August 29, 2012 Share Posted August 29, 2012 50% is crazy! You pay up front for all of the material, you carry all the product for free for their shelves and they capitalize off of your work. You did very good by walking. I only have 1 shop left with consignment and that's only because it sells product monthly and I know the owner personally and I trust them. I only give 25% at that store. Their price is much more than we sell normally but what do I care, it makes me more money in the long run. It's in a very high traffic area and the exposure is worth the commission ten fold. Quote Link to comment Share on other sites More sharing options...
lioness11 Posted August 29, 2012 Author Share Posted August 29, 2012 Just an update...Would you all believe that she had the nerve to ask me if I would just consign my products just for the holidays and when I said no, she then says.."what about in the new year".I'm like lady, get a clue will ya? Desparate much????? Quote Link to comment Share on other sites More sharing options...
NaturallyTru Posted August 30, 2012 Share Posted August 30, 2012 Sounds to me like you have the advantage to negotiate that percentage. Trial through the holidays at your 30% rate and then she can see how worth having your candles and only taking 30% really is. Quote Link to comment Share on other sites More sharing options...
Candybee Posted August 30, 2012 Share Posted August 30, 2012 My concern is why is she so desperate? Something sounds fishy. Quote Link to comment Share on other sites More sharing options...
ksranch Posted August 30, 2012 Share Posted August 30, 2012 Exactly.. I would definately walk away now... Quote Link to comment Share on other sites More sharing options...
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