Sandra J. Paluzzi
The Bead Peddler®

When you place an item in a shop on consignment, it is not yet sold.  In fact, it may never be sold.  The dictionary defines the term 'on consignment' to mean
"With the provision that payment is expected only on completed sales and that unsold items may be returned to the one consigning.  For example: The retailer accepted the shipment on consignment."

Why would a shop owner take something on consignment but refuse to buy it wholesale?  There can be several reasons.  The shop owner may not be sure the new line will sell. If you have faith in the way your line will fit into the store, you may want to work out a consignment deal.   There are some stores that only take merchandise on consignment.  They do this so their cash is not invested in merchandise.   There are several consignment shops.  However, many more come and go than stay around.  Before you agree to put much inventory in a consignment shop, get a good feel of their customer base and feel confident the store will be here tomorrow.  There are warning signs that a consignment shop may not be on solid financial footing.  For example, one local consignment store asks vendors to provide their own displays.  This is not a good sign.  If the store has other items on consignment you could ask for consigner recommendations.  It is best if you talk to the consigner directly rather than accept a typed recommendation.   If you are the first person to put your goods in the store on consignment, you could ask for 3 credit references.

Let's assume you have done your homework and have decided to place your jewelry on consignment.   There are several issues which need to be addressed in writing:

1) The retail price of the piece.
2) The percentage of the retail price that you, the consignor, takes.  This percentage should probably be between 70-80% of the retail price of the piece.
3) The store owner is responsible for paying your percentage of the retail price of the piece if it is lost or damaged.
4)If any of your retail prices are negotiable, set bottom retail price limits in writing.
5) If the store owner decides to have a sale or lower the price without getting your approval, they are responsible for paying your commission on the full retail price of the piece.
6) The title to the jewelry is yours and the storefront is responsible for showing the jewelry in its best light and for marketing it.
7) Whether or not the  storefront has any type of a geographical exclusive on your work.
8) Whether or not the storefront is allowed to take in your competitor's lines.
9) How long the pieces will remain in the storefront on consignment.
10)  How the merchandise will be delivered to the store and who is responsible for cost.
11)  How often you will get paid and the beginning payment date.
12) How the agreement can be terminated.
13) The type of information on the report the show owner will send with your money.
15)  What state laws govern the contract.  This is particularly important if you are consigning goods out of state.

I think I've covered all the bases contract wise.  You will give the store owner an itemized list of all items left with their retail selling prices.  You will also keep a copy of this itemized list.  Both of you will sign the list and keep it updated as items move in and out of the shop. 

Is there an aspect  of marketing that you'd like to see discussed?  
Would you like to share some of your marketing knowledge with other beaders?  Click here to email your questions or article proposals