Wednesday, May 21, 2008

More Consignment Tips!

The next big question in the K. A. Mace Jewelry Consigment Series:

Who determines the retail price? How is it determined? Do they have a set markup?

These are key questions, as it gives you insight into their pricing structure. You also want to make sure that you are protecting the value of your goods, although that is rarely an issue. By that I mean that you do not want them to be "low balling" retail prices that could erode your brand as well as detract from how you may be retailing your product for if you also sell from your website or another website.

Who determines the retail price is really up to how the boutique/gallery does business. I would estimate that about 1/2 of the time, they asked me to assign a retail price, the other 1/2 of the time they would determine the retail price. If I were asked to assign the pricing, I would make sure that I walked them through my wholesale pricing and my markup structure. I would make them partners in that process, as sometimes they would have input on the pricing that would be very helpful. For example, they know when they have more tourist traffic, which can boost retail prices. They may have special events in their area that drive up retail pricing as well, like fairs or festivals that bring a great deal of traffic to their boutique and can drive sales and margin.

If they have a set markup, that makes it pretty easy for you to know what your pricing will be! No brainer! Again, if it seems a bit low to you, you can certainly voice your challenge. It may be that they have a lower overhead than you imagined, or they simply know what pricing will work for their customer base. Your expectations will need to match what the outcome is, however. If you truly have a gut feel that the pricing will be too high, you may find that your product does not sell as well as you had hoped. If you truly feel that the pricing is too low, you may have to adjust pricing on other websites, creating a lot of work for you, and a long term evaluation what that margin erosion will do to your overall business. You might just find that that is not going to be the right boutique/gallery for you based off of what will occur with pricing.

If you do find that the pricing structure works, it is a great idea to invoice them with your wholesale, and then document either your "retail" price on the invoice, or their "retail" with the markup that they provide to you. Ask them if they pay to that invoiced retail price. Why???

Do they put the goods on sale (common in the jewelry business!) and are you notified if your product is put on any kind of promotional sale?

With regard to sales, promotions, etc. I have learned from the jewelry industry that product is marked up to be marked down! So, when I have been told what the retail prices would be, early on, I had stars in my eyes! I was going to make what??? Only to find out that they had all jewelry on sale for Valentine’s Day, or another sales event. In consignment, you typically get a percentage of the SELLING PRICE. That is not the RETAIL PRICE in all cases. Make sure that you understand that, how you invoice the retail price can make all of the difference. Clarify this upfront and you will save yourself a lot of confusion, misunderstanding, disappointment and accounting/bookkeeping nightmares!

Do they want you to retail your product for the same price that they are selling it for? This is very common in today’s world where we are retailing our own product; we are selling through other websites (like or ) and using other methods to sell our goods. This is something that you will have to decide for yourself, and what works for your business plan. Just know this upfront, they can easily “Google” you and find out if and how you are retailing your work, so if you are selling at a lower price, they may sever the relationship. It will make no sense for you to undercut your own retailers!

For me, candidly, the first couple of consignment deals that I made actually helped me to find my own retail prices! For too long I was the one that was pricing my jewelry too low, and not truly understanding what the market could and would bear! Yes, I had done a lot of research, but pricing is something that is a bit of a trial and error process for many designers/artists. You want to use certain benchmarks, but often, I was benchmarking established designers using similar gemstones and metals. In part, you have to take out the fact that an established brand can command more at retail. However, interestingly, I had to factor in my workmanship that was often lacking in the competition. For example, I handknot my necklaces, and found that the competition was often stringing the pearls and/or gemstones. So...figuring out their "mark up" for their established brand but "mark down" for less workmanship...well, you can easily see how difficult it is to price your designs in an accurate way so they will sell, and you are profitable!

Please feel free to contact me at for more questions about consignment. As always, comments are appreciated!

Monday, May 12, 2008

Consignment Series Marches On!

The next "Big Question" to ask for a consigment relationship with a boutique/retailer is "Do you have references, such as other designers or artists that I can contact?".

I do ensure that I pose it as other artists to speak with, as I have been given a reference list that included a landlord, a utility company, and friends/colleagues of the owner. For me, it is great to know that they pay their rent or electric bill on time, absolutely! However, I tend to want to know how other designers/artists rate the boutique and how the owner interacts with that designer.

Asking for references is a question that you can always ask before you even meet with them. If they wish to not provide references, that can be red flag. With that said, they can state that their designer/artist list is private, or that they do not allow any sharing of such information to "third parties", which would be you! That technically, could be true, and I myself would respect that. Even with my jewelry design business, K. A. Mace Jewelry, I keep my client list private, as my clients may not wish to be contacted and inadvertently (or deliberately!) put onto other mailing lists. However, I do ask customers and my boutiques/retailers if they will allow me to offer their information as a reference, and I have yet to be told "No!"! So, that kind of transparency is important in today's business world.

One pretty easy way around that is to visit the boutique, take note of the designers/artists represented and later contact them. Of course, you run the risk of the boutique owner/manager finding out that you did that "behind the scenes" research! However, it is up to that designer/artist to disclose their input and opinion to you. Some may tell you that they want to discuss your request with the owner/manager first. Some may talk your ear off without hesitation!

Also, most boutiques have an online presence, and you can always check their website to find out what other artists are carried in that boutique and contact the artists to ask them about their experiences. Ensure that you are upfront about your intentions, let the artist know that you may have your designs carried in Boutique A, you noticed that they also work with Boutique A's online storefront, and you were simply wondering if they had a moment or two to discuss their experience.

Remember that you are going to be asking questions that need to remain professional, and that have less to do with opinion and more to do with facts. I know designers that have been caught "gossiping" about boutiques, and that in one case an owner actually decided to stop doing business with both of those designers! This is not so much about, "What do you think of the owner?" and more about "Do they pay their invoices on time?"! Remember, how you conduct yourself in this industry does and will get around. It is a big world, but you will find a lot of people know one another and also network via trade shows and online forums. You are building a brand, and your level of professionalism factors into that brand statement, not just your designs!

Most of my questions are along the lines of:

Are invoices paid on time?
Are you happy with your sales at this location (brick and mortar or online)? (remember, sales are proprietary, so don't expect any specifics!)
How long have you worked with this boutique?
I see that you are online, are you also represented in the boutique? If not, can you share with me why?
I see that you are in the boutique, but not online, can you share with me why?
Has the boutique adhered to the contract that you signed?
Would you recommend this boutique to a friend or colleague?

If you do hear negative information, put it into proper context. If a couple of references tell you that they are not paid on time, you will most likely not be paid on time. Easy math! If one tells you that they were not paid on time, the rest state that they were, you have to weight that out. And, remember, if the boutique does offer references, the likelihood is that they will be positive, that owner/manager is savvy enough to make sure that references will put a positive light on the boutique!

Please feel free to contact me via email at with any questions.

Next post: PRICING! (Let's get to the big $$$ question, right?!)

Thursday, May 1, 2008

More About Consignment!

First of all, sorry for neglecting this series regarding consignment. I have received really positive emails from fellow jewelry designers and other artists stating that this series has really helped them to learn a great deal about consigment and how it "really" works!

I have been just a wee bit busy with a new (non-jewelry!) project,! is an innovative directory of caterers, personal chefs, florists, and other vendors who can provide inflight catering and services to private jet owners and jet charter industry! Go to the Jet-Chef blog to check out more information!

Furthermore, I want to take a moment to brag a bit...

One of my blog posts is featured in the Summer 2008 issue of Artful Blogging! Yup! On the "Buzz" page, page 3 in the issue. I am so proud! This publication is so amazing and so inspiring (and not just because one of my posts is featured!). This is a magazine that reads like a highend, ultra expensive coffee table books! Go to for more info on ordering Artful Blogging!

Enough about me...Moving on to Consignment, and the Big Questions!

First Big Question: Does this boutique/retailer have a consignment contract?

I typically ask this before the first meeting, and if they have one, I ask if they can scan or fax a copy of it to me prior to our meeting. Sometimes, they will say it is proprietary and they only share that with the artists that they consign with. That is fine. Just remember, the more details that they are willing to share up front with you, the more likely it is a professional retailer with whom you want to do business.

If they provide a copy to you at the meeting, ask to read through it with the owner/manager. This is pretty standard practice, and hopefully you have set up enough appointment time to do this. If not, let them know that you will need to review it when you get home before you make any decisions. If any retailer is troubled by this request, that can be a question mark. Having the chance to read it quickly through with the owner/manager gives you both the opportunity to clear up any questions or concerns on the spot.

Remember, this is your opportunity to make sure that their terms meet your expectations. Yes, you want to sell your product, yes it feels amazing to be recognized and have your work validated in this manner. But, you have to make sure that it is a solid business, that they are flexible and understanding of your desire to get all of the facts. Truly, top notch retailers will respect you MORE for asking these questions and being involved, they will recognize you as not only an artist, but also a business person.

Not all terms may be negotiable. They may tell you the contract is the contract, period. Does that fit your goals and needs? Again, the sense of urgency to get your product and artwork into the retail marketplace is only known truly by you. You may feel that your desire to get your "foot in the door" outweighs your desire to be flexible. There is nothing wrong with agreeing to their terms, as long as you truly do understand them and are willing to live up to those terms!

So, what do you do if they do not have a contract? You can bring a copy of a contract that you have created, and discuss those terms with them. Feel free to contact me at if you have any questions or would like to see a sample contract. You should have a contract, or this series of questions and suggestions with you for your meeting, as a back up plan.

This is always a great reason to have a laptop or mobile device upon which you could have a copy of a contract that you would like to propose to them to use for your consignment arrangement. That could be immediately emailed to them, and even printed during the meeting for review.

You can always create after the meeting your own "working contract". Throughout the meeting you should have been taking notes and keeping track of what you and the owner/manager agreed upon. After you get home, you can recap what has been discussed. Tell the owner/manager that you would like to send them an email or snail mail copy of your notes for their review. Request that they initial or sign the notes, as this will be your "working contract". Type it up with two initial fields at the lead of each bulletpoint. Initial one set, and they will see that as a good faith effort on your behalf to also commit to what they had told you were their expectation!

Bottom line, if the boutique does not have a contract, you do not have a contract, and they do not want to sign any kind of recap...then what???
I would suggest that you continue on your search for another boutique/retailer. That is solely my suggestion, but one that I know would have been a handly concept for people that I know that entered into consigment agreements with just a friendly handshake. Obviously if you know the owner/manager well, he/she is a neighbor, in your carpool, go to your church, or is your brother or sister-in-law...that is one thing! But the bottom line is that you need to protect your brand, the investment in your inventory and your sanity with some form of written agreement.

Next question in the series...How about some references???