consignment....

[strapt]

Okay friends,

I have had an offer to supply a vendor with Kilt Belts on a consignment basis. Trouble is: they have not been terribly communicative if the past. (And I've never done consgnment before) - So I'm just not sure if this is a wise idea.

They want 20 belts to start and only have 2 shows left this season. They also have another guy supplying belts for them too. For me this seems like a pretty big leap, I'm supposed to pony up materials and time, create 20 belts for the guy and mail them off in the hopes he someday sends me a check for them? btw - my kilt belts are 2 1/2" wide, so 20 of them will be quite an investment just for the leather...

Guess I'm just a little bit nervous of the deal. Any thoughts on this kind of program form you pros out there? Am I just being paranoid about it, or is there some way to protect my end when negotiating this kind of deal?

Bleh -

What do you all think?

[Luke Hatley]

If you Like to Gamble and Need the Money and like to deal Long Distance, Go for it.

My way of thinking i would rather sell 5 of my belt , than put a consigment of 20 belts.

at one time i did consigments and i did not sell anything. COME TO FIND OUT HE WAS USEING MY WORK AS SAMPLES ,THEN HE WOULD COPY AND SELL what he made....I M H O.....

[bruce johnson]

I wouldn't do that deal. He is asking you to be his warehouse. If it doesn't sell, he isn't out anything - you are. How come the other guy isn't doing more for him if it is such a good deal? What kind of percentage is he charging? If he is setting the price, it is not consignment. He is wholesaling off your back. If he hasn't been "terribly communicative" in the past, expect him to pay you in the same manner.

I got the "be careful on consignment" speech from my small business adviser at the start. Retailers generally don't make the percentage on consignment items as the keystone wholesale stuff they sell. Whose stuff are they going to push? Who is responsible when a piece is spilled on, stolen, or gets shop-worn? What do you do when one of their customers comes to you, and wants to buy directly? Do you cut out the middleman, and some would say steal the customer they got?

The only consignment I have done was with two established wholesale customers I could trust. It was pretty specific. They both set up at the NFR trade shows in early December. Items were something they didn't carry in any other lines. Neither of them got anything similar so they weren't competing against each other. I knew I could trust them to either have it sold and a check at the end of 10 days, or I'd have it back for last minute Christmas customers. I only got a couple things back. It worked out well for all of us. They made some booth money they wouldn't have, I made money off it, and it was all stamped with my name, not theirs. Some of these generated custom orders that at least for the one still in business, continue now.

[CitizenKate]

I've done a couple of consignment gigs in the past, neither of which were very satisfying. If I were to do it again, I would want a consignment agreement that would include some extra consideration for the fact that it is MY money tied up in their inventory, not the vendor's.

For example, I would include a clause that sets a time limit on how long the vendor has to sell the item. At the end of that time limit, it is the maker's option whether to extend the time, or take back the merchandise and offer it for sale elsewhere.

I will point out that some shopkeepers will work with makers and allow them to add, remove, or replace inventory at will, in order to stay in the sweet spot for that particular market. If that is the case, a time limit may not be necessary, because if something isn't selling, you can just take it back and replace it with something you think will be more likely to sell. But if the vendor wants to dictate what items are offered, and doesn't allow makers to add/remove items at will, then I would include the time limit clause.

One of the two vendors I worked with had a very crowded shop. One day, I went to check on things, and found she was exhibiting my game boards on the floor, leaning up against a piece of furniture. Suffice it to say, they were not getting seen there, as evidenced by the numerous sole marks I found on the leather. She really didn't care about the damage, or the fact the board now has very little chance of selling because of the damage. Why should she? It was not her merchandise.

So another clause I would include would create some incentive for the vendor to take proper care of the merchandise, just as they would if they owned the merchandise, and make them responsible for any damage done to it. In other words, if it becomes damaged while on exhibit in your shop, you own it. I absolutely would not agree to any consignment deals without this clause in the agreement.

Kate

[UKRay]

Leaving aside the personal investment you have in an article you have made yourself, and leaving aside that you already have concerns or you wouldn't be asking us...

1. Do you feel like investing your hard earned money in this guys business by subsidising his operation?

2. Are the returns sufficient that you will make more selling through him than on your own account?

3. Can you afford to take the loss if it all goes wrong?

If the answer is no to any of those then don't do it.

Just my three penn'orth and worth precisely what you paid for it.

[strapt]

Wow you guys...

Thanks for the suggestions. Valuable information in every one of your posts. I hadn't even thought about "shop damage" on my work. And it sounds like each (with the exception of Bruce) has had a pretty por experience doing this.

UKRay, your questions are spot on, and it really helps to see it spelled out in black and white from someone elses hand.

I think I'll tell him it judt won't work and see if he wants to do a wholesale deal on a smaller order instead.

Thanks to all of you for chiming in. Your experiences really help this newbie make a wiser choice.

[MADMAX22]

Good info, I think if I was doing it with a shop that was easy for me to get to so I could drop by and see whats going on that would be one thing. The long distance thing with people that dont communicate very well or seem sketchy in anyway shape or form just turns me off to the idea.

Usually if it feels wrong and you get that gut feeling that ummm maybe it isnt the best idea then drop it and look up another venue (IMHO)

[TwinOaks]

Another suggestion- If you have the means, photograph your work before delivery, preferably with some proof of date. Then if things get returned to you, you can prove the damage occurred in his possession.

[Daggrim]

Another angle on this. I consign some of my work to a leather shop at the Minnesota Renaissance Festival, to someone I know and trust. She takes 30%. No problem. It'd cost me more than that to pay the vendors fee, set up a tent, and drive up there every weekend for 7 weeks. If I can consign, I don't really loose out on any money. I make out and she makes out. Either way costs me almost exactly the same. The disadvantage is that my few things get somewhat lost among all her things. However, I only consign to this one show.

Doug

[Andy]

I consign some of my slings and holsters, but ONLY with folks I have known for YEARS AND YEARS. I will assist with shops that are having big sales, open houses and such by allowing them a HUGE box of goodies to sell as a one-shot 2-3 day consignment, then I get all my gear back and a check for what is sold.

My 2 cents, .0000078271903 after taxes,

Andy

[Handstitched]

I consign some of my slings and holsters, but ONLY with folks I have known for YEARS AND YEARS. I will assist with shops that are having big sales, open houses and such by allowing them a HUGE box of goodies to sell as a one-shot 2-3 day consignment, then I get all my gear back and a check for what is sold.

My 2 cents, .0000078271903 after taxes,

Andy

G'Day ,

From my own experience, ( and that of my Mothers, she does handicrafts) when we have had stock on consignment in small in retail shops (Western Aust.), the stock isn't always looked after very well, and if it doesn't sell , it does become shopsoiled and some retailers are getting a bit greedy with their % .So now, I'm quite happy to sell my wares at markets , fairs etc. With markets, I have made the effort to be consistant and turn up every time, and it has paid off too, because as a result, I have built up a lot of good will and a good reputation.

If a shop want my goods, then they can buy some product outright, but I'm quite happy to give them some discount on the price depending on how much they buy.

I won't ever do consignment again.

All the best,

Handstitched