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Story by
SarahSays
Published on December 11, 2007 in How-To |
Photo by dippylulu |
Success!
After gathering up every ounce of confidence, and samples of your work, you finally get a gallery or shop owner to sit down with you. And she wants to sell your work! Suddenly visions of fame, fortune and crafting dance around your head. And then the owner suggests a consignment.
But what exactly does consignment mean and how do you know if it's a good deal for you? Wholesale means the artist sells the product directly to the retailer at a bulk rate. With a typical consignment, the artist supplies the store with products for free. When an item sells, the artist will receive the proceeds of the sale minus a commission. The commission is usually around 40 to 60 percent of the sale price (whether wholesaling or consigning, please price your work accordingly (see this article on wholesaling from Beth's Art of Pricing series). That means the artist will not get paid until the work sells. If the work does not sell, the retailer may return the work to the artist.
A consignment deal may benefit an artist. A consignment might make it easier to get items in many outlets. Also, consignments can be ideal for new or risky work, and an artist might be able to pull back items or switch a line during the run. But there are some tricks to the trade that you should watch out for.
Before you agree to sell on consignment, consider the following:
- Do research and use common sense. Unfortunately, retailers come and go. You don’t want a retailer to come and go with your art, without paying you. Before you place your work in a retail establishment, you might want to ask for references or lists of other artists exhibiting there. Ask the references about their experiences. When in doubt, avoid large orders until you have built a level of trust.
- Get all the retailer’s details. You might want to ask for tax IDs, full names, addresses, email addresses and phone numbers. Ask for financial or credit information. That way you will be prepared to contact the retailer if necessary.
- Get all the details of the agreement. You will benefit from a written consignment agreement. The agreement should cover (for example): the full inventory, the retail prices, the length of time of the consignment, payment information, the store’s responsibility for damage or theft, the store’s fees, return policies, display policies, shipping responsibilities, promotional responsibilities, insurance, legal fees, termination, discounting, and any obligations to post a sign regarding the consignment. Both parties should sign this agreement. You may want to use your own consignment agreement. If the retailer supplies you with a consignment agreement, make sure you agree to each clause before you sign it. Do not be afraid to negotiate!
- Stay in contact with the retailer. Regular communication may alert you to any problems with the retailer and it can also help you prepare for success. For example, if you know the retailer is running low on your most popular item, you will be prepared for a re-order.
- Know when to quit. It’s up to you to decide if a relationship is not working out. If you experience late payments or suspect financial problems, you may want to take your work back and move your talents elsewhere.
There are few guarantees in business. Some artists have had amazing successes by selling on consignment and some have had unfortunate experiences. If you receive a convo regarding a consignment that seems suspicious, please email abuse@etsy.com.
This information is for educational and informational purposes only. The content should not be construed as legal advice. The author and Etsy, Inc. disclaim all responsibility for any and all losses, damages, or causes of action that may arise or be connected with the use of these materials. Please consult a licensed attorney in your area with specific legal questions or concerns.
| Tags | business, consignment, contracts, Legal Info for Artists, Seller Handbook, selling, wholesaling |
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19 comments Login to add your own!
jenglo
This is valuable advice and something I will take into consideration as I expand my business. Thank you.
prettycheap
#4 Stay in Contact - Is an understatement.
For the first experiences, choose a shop you already visit and purchase from. For example, your own hair salon or coffeehouse.
You will undoubtedly want to 'visit' your items often and must have a very good positive rapport with the employees and other customers.
I check in my local consignments every 10 to 14 days (approx.). Because no-one will take as good care of your items as you will (kind of like your kids!). I straighten up the display, check on inventory, etc. And have a cup of joe while I'm at it!
Consignment has been a great confidence boost and profitable means to an end at Pretty Cheap Jewelry (pretty designs, cheap prices).
Ramona
Some shops want you to pay a fee plus commission, some shops just want a 50-50 split. Some places want you to work plus a commission.
One shop wanted a $50 upfront fee just to look at my work, plus $50 a month fee on top of a commission.
I do strictly 60-40, and lower if possible. I can't see giving anyone half of my work.
Be careful, decide what works best for you and remember that it's your work, yes they are selling it for you but if you work at it so can you.
bluedogrose
I have worked on both sides of consignment, and this is great advice. I'd note that as far as pricing goes, your prices on Etsy should be the same as the retail price that they sell for on consignment. You don't want to undersell your gallery, and some places have contracts that forbid it.
Vanessa
thanks for all these comments! It's good to hear from people's experiences!
ClassicAddressSigns
We have been doing consignments with a dozen different garden centers for 9 years now. We just raised our commission from 20% to 25%. I have never heard of such high commissions as 40%-50%. I have worked in retail for 15 years before starting my own business and most retail stores shoot for a 20% profit. Maybe setting your own rules and commisions since YOU have all the risk, is the best advise I could add. I would rather sell 100 items and make $10 each than sell 1 and make $20 because it's too expensive. If you have to double the price to compensate for commissions you may price yourself right out of the market.
thefullspectrum
i agree with you classicaddress. you just have to decide how hard you want to work for your money.
XOHandworks
Classic- the percentage probably varies in different parts of the US and around the world. Here in Minnesota, 40% is the norm.
SarahSays
Thanks for sharing your consignment experiences. prettycheap makes a great point. It can be very beneficial to actually "visit" your work. Ramona, another great point. Each Seller should decide what is best for them. Thanks for sharing the story about a shop wanting YOU to pay for THEM to see your work. That's very interesting. ClassicAddressSigns is right; pricing your work is very important.
And yes, it does seem that the percentage of a consignment varies from venue to venue (and maybe even artist to artist within that venue...).
Also, when you enter into a contract, it's good practice to keep a copy of the signed agreement.
juln
alkemystic88
I don't mind leaving my work in a store for 3 months if it is the right location amd I know it is going to get traffic, I want people to see my art everywhere they can but 60 percent is high for commision.
ValerieTyler
I go back and forth on this. Consignment is a great way to get your work into a brick and mortar shop which can give you some additional credibility/publicity. I hate to leave my items in a shop for an extended length of time though. Thanks for the info. things to ponder.
marchpanepig
This was covered everything I needed to know about consignment, thank you Etsy - again!
andrea02
When they say 60/40 split, does this mean that they take 40% of the PROFIT (not the sale price?).
For example,
I make cards. Lets say I make a set of cards and it cost me $5 in materials to make, and they sell it for $10. Do they take $4 and I take $6 (which really turns into $1 with the material cost?)
akcupcake
Feeling discouraged about consigning right now. I am being asked to create very specific designs for one shop that don't exactly go in the direction I am trying to take my business. I am having a hard time deciding whether or not I should throw in the towel. I have talked them down from 50-50 to 60/40...I get 40%.
luckysandi13
I own a boutique and feature many awesome etsy designers at our store on consignment. The girls who shop here LOVE the idea that they are getting something done by a talented artist vs mass produced in a sweatshop. I generally do not buy wholesale on a new vendor, only because we do not know how something will do. Sometimes it's nice to have 10-15 pieces of something, see if the customers go nuts for it, THEN buy a wholesale order. We have only had a few issues, but those are rare.
I'd urge vendors to consider consignment, it does add "legitimacy" to work when you say it is sold at a retail store, and can increase your brand exposure tenfold.
I'm happy to answer any questions if anyone would like more info or advice on consigment/wholesaling.
I LOVE ETSY!!
-Sandi :)
luckysandi13
Andrea- The % that stores would take is based on the retail selling price. So if you sell something for $10, the store would take $4 (on a 40/60 split) and send you $6. Make sure at the end of the day you are still making enough on your designs to make it worth it!
:)
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Thanks so much for this. Consigning is my 'next step' and although I've seen many threads on the subject in the forums, it's always nice to see it all in one article here in the Storque.