Wednesday, February 27, 2008

Consignment: The Good, The Bad and The Ugly

I started a post on my other blog, Retail Training Consultants, after being asked in many forums about my experience with Consignment. I think that consignment can be a great way for an artist to get exposure and business. Consignment, however, in many of the forums and communities in which I am involved has really gotten a "bad rap".
I decided to write a series of the kinds of questions you should ask yourself about a potential consigment agreement, as well as general issues surrounding how to make a consignment agreement work for you. Here is the first installment, more to follow! Please feel free to post your input, and contact me at if you have any specific consignment comments that you would like added to this dialogue. I will also be posting this series as an ebook soon! Enjoy!

I see countless forum posts about consignment and whether or not it is the right fit for that artist. Consignment is not for everyone, but more and smaller retailers are moving in this direction. It reduces one of their big expenses—inventory, and makes them far more flexible when they can move in and out of goods more quickly. The retailer avoids markdowns, dealing with worn or damaged goods, and provides fresh, new merchandise to returning customers. What a great deal for the retailer, right? Well, consignment can also be an amazing deal for you, if you are prepared, if you are informed and if you ask the right questions and get those answers in writing! You, too, can profit from consignment relationships!

First of all, what is consignment? Consignment is defined by Wikipedia as:

the act of consigning, which is placing a person or thing in the hand of another, but retaining ownership until the goods are sold or person is transferred. This may be done for shipping, transfer of prisoners, or for sale in a store (i.e. a consignment shop). In the context of sale, it is usually understood that the consignee (the consignment seller or the party to which goods are sent) pays the consignor (the person with items to sell or the party by which the goods are consigned) only after the sale, from its proceeds.

Consignment can be a complex business relationship. You are putting your work in the hands of the retailer to sell, but no transfer of money is completed until the item is sold. This can feel a bit scary. You release your hard work and passion into a bit of an unknown business arrangement. I know many artists who just “REFUSE” to do consignment because they feel that they deserve to be paid in a wholesale arrangement for their work. That is fine, that this their business plan and the way that they wish to do business. If, however, they see how many galleries and boutiques are moving into the consignment direction, it may be a business practice that they will have to adjust to! And, let’s face it, that may also work for a well-established artist. But, if you are not that nationally recognized artist, you need to find alternative venues to showcase and sell your work. Do your due diligence and you can ensure that you are indeed putting your product in the right hands!

I have found with my business, K. A. Mace Jewelry, that consignment as been profitable for me. However, early on, I was on my own to figure it out. Not as many jewelry designers were on the internet, a fraction of the forums and community groups existed, and to be down right honest, with less public information, other designers were not as upfront with their experiences. Now that the internet has opened up the flow of ideas and information, more and more designers are openly discussing and publishing what has and has not worked for them.

One of the great “perks” to consignment is that it is a way for both the artist and the retail to initiate and develop a working relationship. The relationship needs to work for you, as the artist, just as much as it needs to for the retailer! I have found new wholesale customers through a “trial run” of consignment, I had customers that became repeat customers through my website, I made great business relationships and enjoyed traveling to do trunk shows and appearances. It can be really rewarding in many aspects for an artist to sell through consignment, you just need to be armed with the facts.

This is a basic checklist of questions that I have prepared for myself. By no means do they cover every single aspect of consignment. And, please note that this is from my perspective as a jewelry designer. Other art forms may have other dynamics not noted here. If you find that you have additional perspectives, please feel free to share them with me at The more comprehensive this list, the more we help all artists find the right place to sell their product and drive the handmade movement!

First of all, no matter who starts this relationship, ensure that you have shopped the boutique/retailer as a customer yourself. Have you heard of “mystery shoppers”? Well, this is what you need to do for your own goods!

* What is the shop really like from a customers’ perspective? Bring a friend along, ask them for their thoughts. If you are concerned that you will be recognized, or have an appointment later in the day, have a trusted friend or associate do the shop for you!

* What is the “feeling” you get walking around and observing how they do business?

* Is the shop clean, floors, windows, the display mirrors? This is how they will keep your product, after all!

* Is the shop open the hours that they post? This is important as I have found smaller boutiques to be closed at certain times that seemed inappropriate to me, and it concerned me about the overall traffic that my goods would get if they had an associate that closed the store for her lunch when others could have stopped in over their lunches!

* What is the staff like? Ask questions and test their knowledge of the goods in the store. Where are they? On the floor, at the register? Are they approachable? Do you get a sense for the owner/manager being involved?

* What are the displays like and what condition are the displays in? Do the displays match how your product should be displayed? Is there a consistent branding to the fixtures and displays?

* Are the prices reasonable, are the price points in your range? Several times I would walk in and the prices would be much lower than I expected and I felt that it would be difficult for my jewelry to compete.

I also call the retailer, ask questions on the phone. Are they pleasant, helpful, and professional? Remember, you are working hard to build your brand on your artwork, where you retail or consign your product becomes an extension of you! If you have your product there and someone were to call asking about your merchandise, you would want to know that it could be sold over the phone as easily as if that customer were in the store!

If the consignment shop is not in my local area, I often ask for pictures of the boutique, and see how they present themselves to me. I have sometimes been lucky enough to have friends in the area that would do the scouting for me, and it helped me a great deal to make sound decisions.

Next topic...Preparing for the Meeting with the consignment retailer!


Double Blossom said...

Thanks for the informative article. Great advice! I just started my first consignment relationship, and have been approached about a second. I'm very happy so far; it's been a great way for me to get local exposure.

UniqueNurseGranny said...

A wealth of good information.Thanks will want to follow the series.Well written.


that earring and necklace set is really pretty!

rtisan said...

Great info--thanks!

Mansi said...

Nice and elegant jewelry. The information is worth knowing about.