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Need new inventory with little out-of-pocket expense? Think consignment.
by the Editorial Staff at New Age Retailer
One of the biggest challenges at any retail store is purchasing inventory and then managing the delicate balance between not having enough and having too much. One solution? Consider adding consignment products to your mix this spring.
Selling on consignment is a low-risk way for you to increase your inventory without tying up cash flow. It allows you to try new and unusual products, while featuring local artists’ work in your stores. You instantly have more inventory, the artists get exposure they might not get anywhere else, and your customers have more to choose from—it’s win-win for everyone.
1. Start sourcing.
How do you fi nd consignment products? Most artists will fi nd you, but if not, search for local talent at arts and crafts shows, community colleges, and art schools; network with your customers; or search online. Jewelry, pottery, artwork, greeting cards, and other handmade items are the most common consignment products.
2. Good fit?
Evaluate the consignment merchandise thoroughly: Does it fit in with the rest of your product mix? Is the workmanship consistent with your other products? Can you sell it in a timely fashion? Is the product packaged or presented in a way that can be easily displayed? Will the artist agree to exclusivity in your store? 3. Just say no.
If you don’t think the product meets your store’s needs, be honest. If you’re having a hard time saying “no” to the artist, resort to the juried selection process. Ask him or her to leave a sample for consideration, after which you can say, “We’re sorry your piece wasn’t selected this time.” Even if you’re just discussing it with your cat, using “we” makes it easier to reject someone’s work. 4. Clear policies.
Before you accept product for consignment, have a clear, written policy and agreement in place. Your policy should indicate who is responsible for what, specify a percentage split (most are 70/30 or 60/40), determine who sets the retail price, how/when the artist is paid (weekly, monthly, quarterly), who is responsible for damaged or stolen items, and what to do if the product isn’t selling. 5. Keep accurate records.
Perhaps the biggest difficulty in consignment arrangements is the record keeping. Keeping accurate records of the item, retail price, date sold, percentage paid, and sales tax reported is essential. |
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