Consignment Selling Lessons Learned, Part 1

You have a product you know is quality....friends help you and buy a few...you have a few online sales...and then what? The business side of your brain knows you need volume sales in order to make a profit, and the realist side of you wonders how in the world you're going to make that happen....when, lo and behold, a retail opportunity presents itself to you.

To the "outside" world, it's retail. To the business owner, it's....gulp....consignment.

Many products actually make their way to market via the consignment path.  There's nothing wrong with that.  However, just as with any business practice and venture, there are best practices.  While I certainly am not in a position to give you best practices with regard to consignment selling, I can certainly share a few lessons I've learned over the past year my products have been in consignment stores:

1.)  Visit the store.  Does it bring in the type of customer who would buy your product? Does your price point fit with the other products? Visiting the store is my first decision making factor.  Before you commit to a consignment arrangement, take some time to visit the store, to see the other products being sold, and to watch the customer base.  Is the owner in it for the long haul?  Will your product "fit" with others being sold? Do the customers coming through the door fit your existing customer base?  Don't be afraid to say no at this point - for the good (on this point) the burden is on you. 

2.) Understand the pricing model.  Not every consignment contract is alike.  I've been in five stores, all with a variety of contracts from straight booth rent, to straight commission.  In one store, it's my responsibility to pay sales tax; in another it was an expectation to contribute to the marketing budget. Each contract arrangement is unique to the store but should still provide an overall profit.  Which leads to price....

3.) Your prices don't have to be the same in every store, but they should be in the same range. Since every store will have it's unique contract arrangement, you made need to adjust your prices accordingly in order to retain the profit margin. In my case of candles, I don't have the volume of a large national chain in which my sales would justify a $14.95 price point for the same product in Kohl's, Walmart, or Target. However, if a customer is shopping my product from store to store, the range of $16.50 to $18.00 for the same item feels reasonable.


4.) Don't expect the venue to do the selling for you. Some consignment ventures are established on strong business models, but not all.  Not all consignment ventures have a strong marketing budget.  While I don't pay to advertise my products in a retail environment, I do use social and electronic media to promote what's new in each store or to support their social media marketing efforts.  Because they did not buy your product to resell, you are the one taking the risk and should bear a portion of the burden for the sale.

That's a lot for one post! I'll follow up on the rest of the lessons I've learned from consignment selling in a later post.  I welcome you to post your feedback and experiences below.

Until then,

Dorene

Christmas In July!

Now is a great time to begin stocking up on your Christmas and other gift giving purchases. Candles, home fragrances, and bath & body products make great stocking stuffers, gifts for teachers and co-workers, and "just because" items. For the entire month of July, I have two sales to offer to you:

• FREE SHIPPING - That's right - Free Shipping on all orders over $50. Free shipping is valid for U.S. customers only. For international and local customers, one free candle ($16.50 value) may be substituted. If your purchase is made through my Etsy store, shipping will be refunded to you within 24 hours of purchase.
• BUY ONE GET ONE 50% OFF - Tea lights and 7 oz. cocktail glass candles are available for $3.00 and $3.75 each when purchased with a regularly priced item. Please see my BOGO store section for available products.

All products, are more, are just an email away or available online at www.DLitesbyDorene.Etsy.com. Stock up now!

P.S. If you are hosting a Christmas in July sale, please feel free to post it in your comment!

 

And the winner is.....

I've written before about a team I've joined on Etsy, the Promotional Frenzy Team.  We are a group of 85 sellers with a variety of product, who come together to promote each other's products on Etsy and on the Internet.  Our team leaders have put together several promotions to help all of us with the Christmas in July retail season. 

One of those promotions is a daily contest on Pinterest.  All that is required to enter the contest is to comment on the image.  I invite you to check out our board here for the daily offerings.  My giveaway was on Monday, and unfortunately, I did not realize mine would be featured so soon, which is why my blog posting was extremely and unusally brief. 

Regardless, today I have the opportunity to inform you that the winner is.....

Gari Anne Kosanke of Bead Lovers Korner!

Thank you to everyone who entered.  There  are some wonderful products being offered by the team - watch the board and enter for your chance daily!