Jewelry consignment is often an entry point to wholesaling for many jewelry businesses.Personally, I'm not a huge fan, and I'll tell you why, but I'll also provide tips on what to look for in case you decide it is right for your business.
Jewelry Consignment Tips
Here are some things you should look out for in your jewelry consignment contract:
- Pricing split: how much do you get and how much does the store get? a minimum of 60% to you seems fair in my book, as you are pulling stock out of your inventory for placement in their store on good faith, and essentially loaning them money for free.
- Be sure to include a detailed invoice of items for consignment, including a minimum wholesale price and what the retail price you expect to sell it for.
- Who is responsible for damages should a piece fall apart in the store or gain so much wear and tear that your work is not sellable at a certain point?
- How soon do you get paid after your work is sold?
- How do they track their inventory to be sure the right person gets paid for the sale of their item?
- How long will your handcrafted goods sit in the store before being rotated out?
- If your work is stolen from the store, who is liable for it?
- Does the store hold sales and are you willing to have your work sold at a discounted price after an established time period has lapsed?
- If you do not live near this store, who pays for shipping to the store and who pays for the return of unsold items to you?
- How often, if ever, should you check in with the store to see if they need more items or to do a swap out?
- No contract? Get the hell out of there!
Also, if you can, visit the store to make sure they are not overstocked with merchandise such that your work will be lost. When you visit a store that wants a jewelry consignment agreement, ask yourself:
- Are they located in an area with good traffic patterns?
- Do they have a good reputation, or have you or your friends heard of them?
- Do your handcrafted jewels have a chance of sitting next to cheaper, imported pieces?
- Is this store filled with consignment goods or are you the only unlucky one with a consignment contract?
Why I Don't Do Consignment
I’ve never understood how a store owner could possibly be motivated to sell merchandise that they are not monetarily invested in.
I mean, if they can afford to pay rent for their store, pay for employees, insurance, advertising, and pay for their other merchandise up front, why can’t they pay you for handcrafts upfront?
Think of it this way: You walk into your local bead store and see this gorgeous strand of AAA swiss blue topaz briolettes. It's $350 for the strand.
You turn to the owner and say,
“Gee I love these blue topaz briolettes, they're really pretty, but I'm not sure if I can sell them at this price.
I tell you what, I'll just take these and try to sell them and if I do I'll pay you the $350. But if after six months, I can't sell it, I'll bring the beads back. OK?"
You then walk out the door.
What do you think would happen next?
That's right, your ass would be in jail! (And please do drop us a line from the county, we're really dying to know about all those food rumors.)
Running a business is about managing risks, and to me, if a store owner doesn’t believe much in my work and only wants to do consignment, I just move on.