Placing your products on consignment in a hair salon, clothing boutique, card store, or a specialty gift store is an excellent way to increase your sales and profits. Many of these businesses welcome not having the expense of ordering products and keeping inventory of ordered stock. This is where you come in. Think about your products and what type of store setting they would best fit. Then make a list of the stores you want to approach. It helps if you know something about the establishment such as is the store located in a high traffic location, who shops in the store, what times does the store seem to be busiest, etc. Before approaching the owner or manager of a store make sure you have some samples of your products. Catalogs are helpful but seeing the actual product is what helps to close the deal. Make an appointment with the owner or manager. This shouldnt be too difficult especially if you patronize the business on a regular basis or if you know someone who does that helps too. The biggest task may be working out the terms of your consignment. The first thing is to decide the percentage of each sale the store will receive. Once you decide on the percentage youll know the retail price you should list your products at. I suggest a flat percentage between 10%-15%. Of course you do want to make a profit so you do need to consider: What is your cost for the products? How much do you want to make from the sale of an item? Adjust your retail price according to the percentage that will be given to the store and profit you want. Think about the time youll spend ordering and restocking the store. How much space the store manager or owner is willing to provide to you for your products? Will the space be free or will there be a rental fee? Will you have to provide shelf space? Establish some agreement about how lost or broken items will be handled. This may effect the percentage you give to the store. I recommend keeping a detailed inventory of each item you stock in the store that includes the date the item was stocked, a description of the item, quantity, item number, and retail price. You should also keep a record of any payments received from the consignment store. Keeping track of items that sale helps you to know which are popular and which items to restock quickly. As far as the sales tax, the store should handle all the sales tax. Lastly, I do recommend that you develop a standard consignment contact for your store owners. Some store owners may have their own, which is fine as long as it meets your needs. |
