Week 7 :: Falling out of love

This week’s blogging prompt is suppose to be about how we fell out of love with a particular technique. My problem is that I don’t know that I have a specific technique that I’ve done over and over, then got tired of and never did again. So, with that in mind, I thought I’d turn this topic around a bit and talk about falling out of love with an idea, and share some lessons learned with something that didn’t work for me: consignment.

What is consignment? For artisans, it’s the act of placing your work in a retail store for that store to sell. You retain ownership of your work until it’s sold, and the store will take a percentage of the sale (or mark-up/adjust the selling price to include their cut). It’s different than wholesaling, because the store is not purchasing your work outright; instead, you are essentially renting space. The pros to consignment is that your work is being displayed in a new venue in front of a (potentially) new audience, an audience that gets to see and hold your work (a definite benefit over online shopping). The downside to consignment is your work may not sell, and if it does, you may have to wait for payment.

My first and only experience with consignment can be classified under “not good”, and it has made me gun-shy. On the surface, it was a dream offer; the shop catered to local handmade goods of all types. The reality… well, maybe the reality wasn’t too far off from the dream, but I can honestly say I was too new and inexperienced. The offer came before I even established my business, and I felt pushed into having a meeting with the shop owner. So I went, even knowing this was happening too fast, and it was a truly awkward, horrible, dent-to-the-ego experience. The silver lining about it all is that I did learn a few things. Here’s what I walked away with:

Lesson 1: Don’t rush; it’s okay to stay small for as long as possible. It’s okay to take things slow, to build your stock up, to find your own personal voice, and to work on just having a business and building a customer base before branching out to other selling avenues.

Lesson 2: Experience and research are good. Take time to figure out your style, your branding, your prices, and your target audience. Take time to get your business set up, including legal and tax information. And take some time to visit stores ahead of time to see if your work would be a good match before you make an approach.

Lesson 3: Prepare, prepare, prepare. Be as prepared before meeting with the owner or manager as you can. Ask questions from fellow artist friends about what to expect when consigning, and do some research online. Go to the meeting with questions of your own, and have any paperwork ready.

Lesson 4: Trust your instincts. I was wildly uncomfortable through this whole experience, but I didn’t trust my gut. To compound my anxiety, the attitude of the manager was very abrasive, very demanding, and it was a bit of a shock for my first experience. Was it her being tough or me being so green? I don’t know, but now that I’ve had some experience selling, I feel like I’d be in a better position to approach consignment should that opportunity present itself again.

With all this being said, I also wanted to point out that just because my experience was a rough one doesn’t mean other people have had a hard time consigning. My friend and fellow designer Vicki Potter from Orion Designs has been consigning for 10 years, and I asked her to share some tips for success.

Vicki’s tips:

1. Make an appointment at the store with someone who is in a position to make a decision regarding whether or not they want to carry your products. This may seem obvious, but I highly recommend not doing “cold calls”. Without an appointment, you never know who will be on duty. It may be a sales clerk with no authority and you will have wasted your time. Some may ask you to leave samples. Because of the price points of my products and the one-of-a-kind nature of them, I will never do this and recommend against it.

2. Once the store owner has agreed to carry your product, there are some basic questions you need answers to. Who is responsible for lost inventory? In my experience, that is always the store. What percentage of your sales will the store keep? This can range from 30% – 50%. How often will they pay you? Most places will pay by check after the 15th of the following month. This seems to be pretty standard.

3. You can gather all of the items you plan to leave with the store and take a few pictures of the collection. This may come in handy not only to help identify missing items later, but if someone wants a pair of earrings to match a certain necklace, that photo will save you a trip to the store.

4. Now that you’ve left your product (you may want to start out with a small amount) at the store, create a file (I use a spreadsheet) identifying all of the items you left there. Use as much detail as you are comfortable with. You can start this with a copy of the consignment sheet you left at the store. I use an old fashioned 2-part receipt book and I make sure to get a signature on both copies before I leave. This signifies that they agree with the list of items you’ve left for them.

5. Each month, when you get your consignment report and sales check (hopefully), check the math and update your master list (spreadsheet). If possible, visit the store at least once a month to see how your work is displayed and to do a rough inventory check. If something looks awry, don’t be afraid to ask questions about whether or not something has sold. It may be “missing” or it may be caught in a timing situation – your visit may occur before the latest checks are written. Remember, you still own this inventory and will keep much better track of it than any store ever will, even those with computerized inventory systems.

6. What to do when a piece (or more!) is missing? Being able to produce all of your paperwork will give you a great advantage. If you can prove that you actually left the piece at the store (your signed consignment sheet), that you have not been paid for it (your consignment report from the store) and that it is not physically in the store (visual inspection), you have a good case for them to pay you for that piece.

7. Some people may say that wholesaling your work is a preferable arrangement – I say, yes and no. With wholesale, you get paid either immediately or within 30 days, whether the items have sold or not. But, the payoff may be much less, as wholesale pricing is generally 50% of retail. Many small art galleries are not in a position to make purchases of artwork. I like having my work displayed in those types of stores and am willing to go through the trouble of consignment to do so. One other never discussed part of wholesaling is this – what if your items don’t sell? With consignment, you can always trade-out one piece for another. When your items are owned outright by the store, they may end up in a sale basket in the back corner after a few months. Ask me how I know. It doesn’t feel very good.

BIG thanks to Vicki for taking the time to share her knowledge! If you’re thinking about consignment, I hope this helps give a well-rounded view of what to expect. Not all experiences are as bad as mine was, and consignment can be a steady revenue source. If you currently consign with a shop or two, I’d love to hear your own stories!

Vicki can be found here:
Etsy shop: http://www.vickiorion.etsy.com/
Blog: http://www.vickiorion.blogspot.com/
Website: http://www.badgirlsofthenorth.com/
Additional reading: Vicki’s thoughts on having your eggs in different baskets

12 Responses to Week 7 :: Falling out of love

  1. This is a good post. My consigning experience has been okay, but not great. I'm definitely gun shy about it. You posted lots of useful info, though!

    And by the way, there's a Sunshine Award floating around the blogosphere right now. Someone gave it to me and I'm passing it on to you (just stop by my blog to check it out and grab the image if you're so inclined).

  2. Hey CK, thanks for stopping by!

    It's sad when what could be a good, mutually beneficial arrangement doesn't quite live up to expectations. I don't fault store owners at all though (unless they are shady); they're in business, and have to protect their interests. As artists, we have to protect our interests, too, so I'm glad Vicki shared some tips about how to do so.

    And thanks for the blog award!

  3. Hi Brandi,

    I have only had one experience with consignment and let's just say I outlasted the store. The owner decided to up and close shop one day and I had to wrangle the money she owed me and items that hadn't sold out of her. She tried to tell me that she had "bills to pay", etc. And this was a shop in Brentwood ($$$)! So now I'm just doing my own thing over here in Etsyland and releasing some of the anxiety over sell sell selling. Fortunately, this is a side interest for me, not my primary source of income. I wish you luck in your future consignment endeavors!

  4. Oh man, I'm so sorry that happened to you! I've had friends that have had similar horror stories with getting their products/money. I'm glad it worked out for you.

    As for consigning, there isn't a whole lot of places around here that I know of that consigns, but I'm not really looking, either. But I've been able to look back objectively at it, and thought I'd share what I learned. 🙂

  5. Brandi, this is an excellent post.I have always been afraid of selling on consignment. I am definitely bookmarking this page for future use. Very informative. Thank you!

  6. Hey Donna, thanks for stopping by! I'm still a little wary of consigning (obviously, and isn't it funny how one experience can color everything else?), but Vicki really answered a lot of questions for me about how to handle the whole process. I'm glad it helped answer a few questions for you, too!

  7. Hi Brandi! My name is Wendy, a girl and her brush. I just found your blog through Tara. I am just starting my business and I found this post extremely helpful. I am so glad I found this before I approached any businesses. Thanks so much for sharing your experience!

  8. Hey there, Wendy, thanks for stopping by!

    I'm really glad this post helped you. Lots of people talk about wholesaling and other business aspects, but I don't know too many talking about consigning. Vicki's tips come from a decade worth of experience, and I think the most important thing I got from them was that they showed me what the general roles and responsibilities are between me and the store.

    Best of luck to you in your new business! If you ever want some good links for business tips, let me know – I've got a collection of them.

  9. Brandi, this is a super valuable post. Thank you so much for sharing this information! Will definitely help me as I try to figure out if I want to try consignment.