Every time I get a bit of press, or a new store starts selling my work, I get a large number of requests from boutiques to sell my work through them on consignment.
And to every request, I respond that I don’t sell on consignment*.
A quick primer, if you’re not aware of the difference between consignment and wholesale. When I wholesale items, I sell them to a retail store at a special, wholesale price. I require the store to order a minimum number of items, and to meet a minimum (but modest) dollar amount for each order. The store then marks up the price 100% (or more) and keeps the profit.
However, if I were to consign items to a retailer, the retailer would only pay me for items it has been able to sell. Usually, this split is 50/50 or 60/40 (60% going to me, and 40% to the retailer).
Here’s why I don’t currently do consignment: my production is small, and, for some items like tote bags, requires a long lead time. Because I keep my inventory so tight, I prefer to put items in my Etsy shop (where I can sell it for the full retail price) or sell them wholesale to a retailer (and get the wholesale amount up front) rather than consign them. I have a few retailers who buy my work wholesale (and do quite well with it). I want to be fair to them, and always give them first dibs on items, because they’ve made an up-front investment in my work.
I started a conversation about consignment on Twitter last night and got some interesting responses – not everyone agreed with me (and some talked me down from my earlier, more militant view) – as well as some tips about selling successfully on consignment. If you’re a maker, what do you think about consignment vs. wholesale? And retailers, please weigh in, too!
*I have made two exceptions: I have sold original artwork on consignment (i.e. the gallery model), and I will consign items to local museums and nonprofits whose missions I support.
Hi Jen, good subject. As a very small business I’ve enjoyed consignment selling as I haven’t had to make a big batch of products. It’s been a good way of gaining experience and I’ve been really lucky with having a good split (80/20). It’s also nice to have an open dialogue with the shops about which products are selling, what the clients are asking for etc. The downside is the shop doesn’t have such an incentive to sell my products as they would if they’d invested in them on a wholesale basis, and this ends up with them sitting on stock for 3 months. Also following up on payments and remaining stock is a bit of a pain for a non paperwork person like me. I would like to get to a wholesale basis at some time.
Thanks for talking about this.
Hi Micala, thanks for your comment. I agree with you completely – consignment is a good way to try out products, but the drawbacks are definitely the paperwork and the potentially slower sales. And good for you for getting such a good split! I’ve heard from stores that they like to be able to see if a vendor’s work would sell before they commit to a wholesale order; perhaps your stores will make that switch eventually, too. Best of luck to you. Keep me posted!
Will do, thanks Jen. Best of luck to you too!
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