Beading Tips & Tricks : Pros and Cons of Consignment

Question one:
I have been selling my jewelry in a hairdressing salon for some time now. The owner was buying from me up front. We were going along nicely and I was always picking up a couple of hundred dollars here and there, giving me money to play with in buying beads. When it slowed down a little, he asked me if I would give him product on consignment, and he wanted only Swarvoski crystal pieces. I did so and hardly made any money from then on. I will not leave items on consignment again. It cost me a lot but I did learn one thing that is very important, never leave any more than 5 or 6 pieces at the very most at one time.

Answer:
In my opinion, consignment is a great thing for the store owner and a bad thing for the designer. If a store owner does not have the capital to put products in their store, they will try to get the product on consignment. Many designers will give their products to the store on consignment because they feel that at least it is a foot in the door.

After trying it out we decided not put our jewelry on consignment. As you found out, the store has less incentive to sell your merchandise if they do not have to pay for it. Of course, you want your items to sell so that the store will purchase more of them from you. It is in your best interest if the store sells the products that they buy from you. Even though we did not sell on consignment, we would give our wholesale customers a guarantee on the product. Our guarantee to the store owner was that if the pieces that they bought from us did not sell, we would exchange them for other pieces. This made it much easier to sell our jewelry to the store owners because they did not feel that they would be stuck with pieces that they could not sell.

This is not something that you have to do, but we found that it helped to make the sale and not very many of the stores would actually exchange the merchandise once they bought it. If they did exchange it for something that sold better for them, then they would return to buy more in the future. We found that this was a win, win policy.

If you want to sell your product on consignment, you can give it to the store owner to sell. In our experience, if the purchaser was not willing to pay for it, it did not sell in their store very well.

Question two:
If one goes the consignment route, who is responsible should jewelry be stolen while on display? If an item is missing from the inventory shown at a store, is it considered sold?

Answer:
In a consignment situation, the store owner should take full responsibility for your items and pay you your percentage on any jewelry that is not in his store. There is really no way for the store owner to prove that the merchandise was stolen or not accounted for when it was sold. Even if it was stolen, the store owner would not be able to go back to a normal supplier and say, “Give me my money back because the item I bought from you was stolen from my store”. Therefore since you have no control over the inventory once it is the store, the owner should be fully responsible for any items that are not present when you do an inventory of them. Of course you should get a merchandise received receipt from the merchant when you leave your items for consignment.