~Do you have to pay to be in a consignment shop?
Some shops do charge an ongoing monthly fee as well as a percentage of each sale. Some only charge a percentage of sales. Do the math; figure out how many items you have to sell to be able to pay your monthly fee if they charge one. If my net on a dinosaur bag is $15 and the shop is charging consignees $30 per month, my first two dinosaur sales each month go toward paying the fee. Basically I gave away two bags for the privilege of selling there. Are there enough sales after that to support this venue?
~Do the items you bring in have to be bagged and tagged?
It varies. The earrings I sell are hanging on a cardstock backing with tiny holes for earwires to slip in. The loaded card is then put in a small zip-top bag. Some stores require a “hang-hole” at the top of the product packaging. Other stores provided a metal jewelry rack and wanted the earrings hung there without the backing. I have found little items displayed in baggies have a bit more protection from theft due to the size and stiffness. Also, individual earrings don’t get lost as the packaging keeps pairs together. Tagging with prices was usually my job, not the store’s. Keep records of items you bring in to sell. How many, what date, the prices of each. If the store calls you to ask about pricing (maybe the price tag fell off), discounts (if they buy 3 pair…), can someone order the same item in another color? or do you have more of XX, this master inventory sheet will be necessary for your sanity :)
~How much percentage will they take from my item’s selling price?
I have experienced 20-50% consignment fees. If the store charges 20%, when I sell a $10 item, my “cut” is $8.00.
~Do I need a license? Is there any other paperwork involved?
Check your locality (city, county and state) for regulations. Some areas have a cottage industry waver until you are making $XX per quarter or year. Keep your sales records :) You should get a copy of any signed agreement/contract with a store. There will be rules about when you can come in to work on a display or drop off your goods. You need paperwork stating the agreed consignment fees. you need to have the store address, phone number, hours of operation and contact person you deal with. There should be info on how long items are to be displayed, when payments are made and how you are paid (do they pay weekly or monthly? do you pick up payments or do they mail out a check?). When you are paid, you should receive a detailed, itemized list of what sold. Some have this spelled out on your check stub, “3 teddy bears, 2 pair earrings” with the amount total. Ask how you will receive your selling record.
~What if something gets stolen?
Good question. The contract info should cover liability. It may have a blanket statement such as, “We cannot be responsible for ___” or “Sellers should carry insurance..” or, “Display merchandise at your own risk”. Some stores are kind and will work with you/compromise if inventory is missing. Some have insurance to cover your items. Some shops are neat and tidy, carefully watching items but nothing is completely theft-proof. Your detailed inventory records of what you brought in and what sold are very valuable if this happens!
~Have you ever experienced theft with consignment?
Yes I have, unfortunately. A lovely craft consignment shop that I had been selling with for a few years had a mishap. When a supplier finished a delivery one morning, the back door was left unlocked for a very short amount of time before the owner noticed it. Unfortunately, someone (who must have watched the delivery take place) stole a handful of paper grocery sacks containing recently dropped-off items from a few vendors/consignees. The owner had the sacks lined up in the back room, ready to set merchandise out that morning. As vendors brought in a sack, the owner removed our inventory sheet and added it to a notebook. This was how she was able to pinpoint exactly what disappeared. Luckily for me, though I had just dropped off a dozen mini quilts and the bag was stolen, this shop’s insurance covered the full price of the merchandise taken. The owner called to explain about the theft the day after it happened and she had a check for me that same afternoon. This is NOT typical, however. I believe her meticulous record-keeping, her absolute awareness of the shop plus the her two honest coworkers assistance are what made it possible to be refunded in full. She also had great rapport with her insurance agent (a local company) as well as her consignees. She was embarrassed by the incident and very apologetic. I was fine with the way she alerted us and how she handled everything. This was a small town and word gets around. She worked quickly to present the issue with an immediate resolution directly to her consignees. She informed us with the facts, gave financial restitution out of her own pocket before the insurance claim went through. This helped avert gossip and/or loss of trust.
~What are the downsides to consignment?
1: At intervals, maybe seasonally or quarterly, unsold items are returned to you. Shops will redecorate at whim and weed out items that have hung around a while so fresh items can be displayed. This means (unless you have sold out), you will have a quaint variety of leftovers. To help counter this, you can celebrate seasons by color schemes but don’t get too specific. This way an item will last longer. Example: A green basket would be appropriate for Christmas but not Valentine’s Day. Add a small bunny and bring it out again for Spring/Easter. Or with a bird-theme charm or bow, the basket works nicely for Spring as well as Mother’s Day. If the same green basket was fitted with a sewn-in Poinsettia-print liner or glued-on Christmas tree ornament, it will be sadly outdated December 24th and languish undisturbed in your sewing room for the next 11 months :/
2: At any point, you may be told an item needs TLC. Merchandise doesn’t stay sitting all day on a shelf. Shops rotate items and create new window display. A mom will pick up your Widget, hand it to her daughter saying, “Does this match your wallpaper ?” People examine, poke and prod. Items get tried on, buttoned, snapped, tied and untied. Sunny days can fade window displays. Things get dropped. It’s part of the risk of a brick and mortar store. I was asked to pick up items to launder or iron them, re-hem a section, stitch a ribbon or button back on or make small repairs. Prepare for merchandise to get “shop-worn”.
3: One time when I was out running errands, I ran into a worker from “my” consignment shop. She was carrying/using one of my consigned purses. I was hoping that meant she had purchased it, but later was told she had “permission” to use it and the shop felt it was good exposure for my item. I didn’t think that was a nice way to do business. They would be selling the item to a customer as “new” merchandise which I felt was not fair to the buyer or to me. I had been previously asked by this same shop if I would give a customer a bit of a discount as the item they were looking to buy wasn’t as “fresh” as some of the other items. I wondered later if it was in fact, shop-worn due to the owner/workers using it already.
Most of my consignment experiences were good ones :) I’m just giving you the ‘heads-up’ on what can happen. I had many special requests for customers and I always went out of my way to comply if I was able. I wanted to have the reputation of being easy to work with, quick to respond and willing to work to please a customer. I remember at one point I had built up my inventory and had a variety of colorful sunbonnets in different sizes filling the shop shelves. It was a relief to know I could relax a bit and have time to work on another product. Before I even got the sunbonnet supplies put away, I received a phone call for a special request regarding a sunbonnet. The customer wanted it in a color I did not have in the shop (argh!). I called the customer to talk it over and this sweet mom shared the story; her daughter had been injured by a large stray dog. Repairing the injury took a lot of stitches on her scalp which required this Jr. High girl to have her head completely shaved. This brave girl was recovering but missing participating in her cheer squad activities. The mom asked if there was any way I could make a sunbonnet using the school’s team colors so her daughter could attend an upcoming sports event and show support of the team. Wow. Yes, of course. We had a special fitting session so I could adjust the size and secure the ties in a way that we felt would keep the bonnet in place. The girl left with a smile and I nearly cried, witnessing her lovely spirit. I was so proud of her and was thrilled to have a part in enabling her to blend in and be able to attend a “normal” school function.