We’re back for another Business Basics from A-Z segment. This week, C is for Consignment. Consignment is when you provide products to a shop and they sell the products to their customers. Rather than getting paid up front for your products, as with a wholesale account, you are paid on a pre-arranged basis after your items sell. Consignment isn’t a new topic on this blog: I’ve written about it and shared my personal experiences in this post about the pros and cons of selling on consignment. I’ve also posted some tips for a successful consignment arrangement.
There are a number of ways you may connect with consignment accounts. You might be approached by a store owner to sell your products on consignment or you may venture into a local boutique hoping to sell your products to them at wholesale but discover they are a consignment-based business. You may learn about stores in other regions from your maker friends or online forums and you can reach out to those shops to inquire about selling on consignment.
As with any selling arrangement, you should sign an agreement with the store owner prior to delivering any of your products. This helps protect both you and the shop owner and a contract clearly lays out guidelines and expectations. I would caution against opening up too many consignment accounts at once, so that all of your inventory isn’t tied up without you having received any money for it. I also suggest starting with a local store that you can trust and then expanding from there if you’d like.
Consignment can be a good way for you to get your products into new stores and in front of potential customers, but there are some important points to consider before going down this road. Be sure to read my other posts I linked to above to give you a clearer picture of typical consignment arrangements and the types of situations to avoid.
Do you sell your products on consignment? Share your thoughts in the comments below.