#61 To consign or not to consign, that is the question with Robin Kramer

Consignment.

If you’ve been selling to stores at all you’ve likely been asked to consign your jewelry.

Robin and I are hosting this episode together today because we get asked “All Of The Time” for our opinion on consignment.

I’ll give it to you in a nutshell…

We aren’t totally sold.

I’ve been burned by it in my own jewelry biz a few times and I’ve seen many talented designers come to the edge of almost losing their businesses because of a bad consignment decision or two.

But…I’ve also seen strong consignment relationships turn into profitable, successful wholesale accounts.

Just like everything else in life and business, there are pros and cons to everything!

So on today’s episode we are giving you a 360 degree view of consignment to help you think strategically and make the best decision for your business.

To consign or not to consign, that is the question.

Let’s get to it!

Click here to download the show notes

Pros of Consignment

Okay…so even though Robin & I aren’t huge fans of consignment, there are some pros to it. Selling this way gets you exposure by being in stores that have an audience you would otherwise never reach.

It also allows stores to test your jewelry…which is a great thing if you’ve been trying to get into your dream store for years with no success. Consignment also can possibly open the door to negotiate wholesale if your jewelry sells well for that store.

Cons of Consignment

The biggest reason that we don’t love consignment is because more often than not we see that store owners are not invested in selling your jewelry in their store because they don’t own it. Plus their sales people may not know enough about you and your product to make good sales.

It’s also tough to build a business with consignment because it’s financially limiting to have inventory that you own tied up in a store that you have little to no control over.

How to Consign Successfully

If you do choose to consign your jewelry, there are a few things that you should do in order to ensure a positive experience. Most importantly – communication is key! It starts with a solid contract and continues on through your relationship with the store owner and all of their sales people.

Second, you’ve got to be involved. Consignment is a relationship. Show up in the store and do your monthly inventory, educate the sales staff about your store and your products, and take ownership of making sure that your display meets your standards.

So there you have it!

Before we sign off though, we really want to hear from you. Do us a massive favor and answer these questions in the comments below:

– Do you have any consignment accounts at the moment?
– If you are successfully consigning, what are you doing to make it work well?
– What isn’t working for your consignment strategy? ?

Alright, answer away!

xo, Tracy

Links
Halstead
Mastering Wholesale

12 Comments

  1. Helena on October 4, 2016 at 1:29 pm

    I have the same feeling about consigning. It didn’t work for my brand, simply because the shop owner didn’t mention any brand on the store. Nobody really knew that my brand was there, or any other brand, except for the labels on the moment of actually buying. Even if you mention it on social media, they didn’t. Felt like your “box in the back”. I have a rule now, consigning only on super hip stores, not big, with very active sales force, even if its small (a group of 2), just because I’m not there to sell it. That way, the product hopefully will sell it self and with a little help from my social marketing presence, will sell better. Sorry for the long comment! 🙂

    • Tracy Matthews on November 18, 2016 at 9:34 am

      Hi Helena! No worries! Sounds like you have things figured out! Go, girl!

  2. Helen Tieber on October 4, 2016 at 5:16 pm

    On Consignment, what do u do if some of your inventory is stolen or missing at the end of the month when u Do inventory??

    Helen
    Htieber@gmail.com

    • Tracy Matthews on November 18, 2016 at 9:31 am

      Hi Helen! Make sure you address it right away with the store!

  3. Ginger Herbein on October 4, 2016 at 7:02 pm

    I’m not a fan of consignment regardless of how reputable the store is. There is a very reputable store out west (JCK did a whole article on the buyer and everything), and they wanted to take on my one collection. They test it for 3 months to see if it will sell, and if half of it sells they do wholesale with you. I was so excited with the opportunity, did my research, etc. I thought I was building a good relationship with the buyer since we communicated often regarding everything. As soon as they received the shipment I got a call asking if the price list was for them, or if it was retail (I had sent the price list to them before getting an ok to produce). It was the price list for them. Next thing I know they are sending everything back. The excuse was that places out west aren’t into bigger jewelry; they are more into minimalistic. I believe it was a lie because they didn’t like the price they had to pay, so they made an excuse (especially since all the size dimensions were in the line sheets). I guess because it was silver they wanted it cheap, so I’m not sure how much they really know about jewelry and pricing if that is the case. Since I have been having money issues within the last year because my real job is a contractor job, my mom was the one whom paid for everything in order for me to make it…and I still owe her the money back as some point 🙁

    • Tracy Matthews on November 18, 2016 at 9:31 am

      Ginger, sorry to hear about the trouble. Don’t let it get you down!

  4. JP on October 4, 2016 at 10:11 pm

    Thank you for this podcast,there were some great pointers to consider and make consignment work, at least in the short term. Yes I do consignment but I attempt to keep this to a minimum. Every con you said about it is so true – items sitting getting tarnished, being lost in the crowd, inventory going awol – yet I have managed to establish good rapport with the sales people when i go in to clean items, which has made a BIG difference.

    My main consignment client does have a challenge with paying promptly so I check the inventory myself and send them an invoice for them to review. More often than not they are just glad it is done so it is rarely challenged and they pay. Also, as I have begun the wholesale conversation, what I now do is show a comparison of the consignment and wholesale prices so they see what they would have saved if they had purchased it outright before.

    My take home points from this podcast are to make sure that theft is addressed clearly in the contract and to increase my engagement on a monthly basis and of course look for opportunities to move the client towards wholesale.

    Thank you again ladies!

    JP – Jewel Art

    • Tracy Matthews on November 18, 2016 at 9:29 am

      Hi JP! Totally sounds like you are rockin’ this stuff! Keep on it and keep pursuing that wholesale convo!

  5. Shawn on October 5, 2016 at 11:14 am

    I enjoyed the podcast very much. It was a real eye opener as to how some stores may behave and how they regard the inventory they have on consignment. I have a really good relationship with the store where I have inventory on consignment. They promote my line really well and have helped me establish a following. The whole concept behind the store is that it serves as a muse for artists and all of the items are handmade and approximately 70 percent are local/regional artists. I get regular monthly statements/payments which I am able to reconcile against the consignment memos that were submitted with the inventory.

    The rate that I am paid is fair. When I factor in the rate (60/40) I look at things like the amount of overhead that is involved for the store and the fact that they are taking care of the sales tax and paying the staff. I feel like this has been a good trade off considering the exposure that I have gained. They have sponsored events for me to help bring more brand recognition. I do realize that they may be the exception and not the rule as far as consignment goes.

    The one thing that I don’t have in our agreement is something regarding loss/theft. I’m not sure how to work that in at this point. Fortunately, I haven’t had an instance of theft yet (knock on wood!). I have a good relationship with the store owner so hopefully making this addendum to the contract won’t be a big deal.

    • Tracy Matthews on November 18, 2016 at 9:26 am

      Hey Shawn! Happy you liked it! Sounds like you know your market. Keep up the good work!

  6. Marcia Vidal on November 2, 2016 at 11:40 am

    I’ve only just finished my line-sheet and the first store I contacted asked me to consign a few items and then they’ll invest. It’s a good store in one of the most affluent areas of London so I’m eager to get in there, especially as it’s the run up to Christmas. I didn’t know to negotiate the price though and just assumed they would pay me the wholesale price when the items sell. It’s only 6 pieces I’m giving them initially and I have already made clear that all subsequent dealings will be wholesale, which they agree to. I don’t think I can afford to do wholesale on a regular basis though. Unless somewhere like Liberty’s in London ask!!! If someone asks again, I will bear in mind what you said about charging a higher rate than wholesale. I don’t feel I can go back and change the rate now. Thanks for this, it really helped.

    • Tracy Matthews on November 14, 2016 at 12:00 pm

      Hi Maria! If you’re not making enough with your wholesale prices they def. need to be raised. Crunch those numbers!

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