11 Tips When Selling Through Consignment

January 13, 2013 | By | 18 Replies More

11 Tips when selling on consignment

If you are looking for another sales outlet for your products, consider selling through consignment. Many retailers are accepting consigned goods, as this arrangement allows them to get inventory without shelling out their own cash.

Consignment allows you to sell your products without having to pay for rents, overhead, or salaries of people to staff the store. It also allows you to reach different locations and markets and enables you to strengthen the quality of your brand.

It’s possible to make quite a bit of money consigning, particularly if you are selling more high-end pieces. By selling to individuals outright (through ads in papers, out of your trunk at work, etc.), you may be able to do better, but the work and expense involved often are not worth it.

In consigning your products, you are basically lending your products to the retail store owner. The retailer displays your wares and includes them in their line of products. If the merchandise sells, the store owner pays you less the agreed percentage and other costs. The percentage share of the retailer ranges from 25 to 50 percent, depending on the store and the type of merchandise.

However, before you go into consignment, you should take note of the following:

1. Check the shop out.

Visit the retail store and take the time to look around the store before consigning. Evaluate its look, feel, and appearance. Is this the kind of store that you yourself would frequent? If not, then maybe other people feel the same too, and hence your chances of selling your items are slim at best. Also check merchandise condition, how merchandise is displayed, and the prices of comparable items.

2. Determine the store’s match with your products.

To improve your chances for sales, look for consignment shops that sell the same general type of merchandise you are offering. For instance, if you produce clothing that is western in style, a shop that focuses on hip-hop clothing is not going to bring you any sales. Similarly, if you are offering antiques, don’t offer your wares to a contemporary home furnishings store.

selling through consignment

3. Choose a retail store that gets adequate traffic.

You stand a better chance of selling your products faster if you choose a store that attracts a huge number of customers. The store must be able to attract enough buyers, first of all. Many consignment stores go in and out of business quickly, so only consign with a store that has proven itself and has been in business for less at least three years.

Keep in mind that your products are basically tied up until it’s sold or you retrieve it from consignment shops. If the store is located in an out-of-the-way place and doesn’t actively market itself, your products may simply gather dust and your earning potential may be severely compromised. I have heard of a number of consignees who complained about not getting any sale for a year! Be smart and select only retail stores where you know your products stand a greater chance of being sold.

Some choose to consign with “boutiques,” which are pricier and can be found in richer towns. The cost may be higher, but it often pays off.

4. Make sure your products are prominently displayed.

Even within the store you need to be sure that your products are right in the line of customer traffic. Your products stand a lesser chance of getting purchased if it is tucked in the furthermost corner of the store where customers hardly ever go. If you can arrange to have your products included in the store window display, so much the better.

5. Set a timetable.

Give the consignment store a period of time to sell your items. If they are unable to sell your goods, arrange to have your items pulled out. Maybe you made the wrong choice in terms of the store, or their location is not working for you. Whatever the reason, keep in mind that unsold inventory means that your money is “sleeping.”

6. Be sure to get the terms in writing.

Spell out the agreement with the retail store in a written contract. Get the owner or buyer to sign and agree to your terms regarding the payment schedule, responsibility for lost or stolen goods, and display and upkeep of the merchandise.

7. Know what the exact fees are.

Make sure you know how much you will be getting, i.e., 25%, 33% or 50% of the sale. Also find out if it is a 30, 60 or 90-day consignment. Aside from the sales percentage, inquire if other costs will be charged to you. Some shops charge an “administration fee” in addition to the percentage cut, sometimes without informing the consignee. Beware of the shops that do not give you the prices they are going to charge for your items. If you are not satisfied with the price that you are offered, find another place.

8. Retrieving your goods.

Not selling anything is bad enough; never getting back your merchandise is worse. And believe it or not, these things happen. There are cases when unscrupulous store owners refuse to give back a consignee’s products. You particularly need to give this due consideration if the shop is located at a distance from you, which can make getting your merchandise that doesn’t sell costly or impossible.

9. Check the back-end systems.

Ask how your inventory is tracked and when goods are paid for. Shops that are computerized keep more accurate records. Moreover, make sure to receive a receipt for the items brought in, as well as a statement at the time of payment showing what sold.

10. Determine how carefully the goods are treated and protected.

Ask what type of insurance they have particularly if you are selling valuable items like jewelry, antiques or artwork. If the store owner has no theft or fire insurance, think twice about placing your products with that store. Check if the store has fire alarms and water sprinkler to protect the items in case of fire. Choose a store owner who is willing to protect your items, even to the extent of providing locked cases for valuable products.

11. Know your products well.

Lastly, be sure that you know every little bit about your product. Inspect the quality of your merchandise, making sure that there are no stains or tears if you are selling clothes or cracks for porcelain items. When you hand over your merchandise to the store owner point out that your items are in pristine condition. This way, he or she cannot tell you later on, “Opps, sorry. We won’t pay for that item since it has stains in it” especially if the product has remained unsold on their shelves for six months.

Recommended Books on How to Sell Consignment:


George Rodriguez

George Rodriguez is a writer for PowerHomeBiz.com. An entrepreneur with experience in running several businesses, he writes on various topics on entrepreneurship and small business.

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Comments (18)

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  1. MicroSourcing says:

    It’s important for sellers to determine if the price cut store owners take from their sales will translate to substantial profits for them in the long run. Consignments are also great for giving your brand visibility.

  2. Israel Alber says:

    Yes! Finally someone writes about consignments!

  3. ronda song says:

    Excellent way of telling, and good article to obtain information concerning my presentation subject matter, which i am going to convey in school.

  4. letha says:

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  7. jewel says:

    Incredible points. Great arguments. Keep up the amazing work.

  8. rosetta says:

    There is definately a lot to know about this subject. I really like all the points you’ve made.

  9. Phoebe Ennor says:

    That is a great tip especially to those fresh to the blogosphere. Short but very precise info… Thanks for sharing this one. A must read article!

  10. Grayce Weinberger says:

    You have observed very interesting points ! ps decent web site . “Where can I find a man governed by reason instead of habits and urges” by Kahlil Gibran.

  11. florpitts says:

    Saved as a favorite, I like your website!

  12. Sam says:

    Where are the 11 tips? I don’t see them?

    • Thank you for raising about the disappearance of the 11 tips. An erroneous code was put on the page and cut off the 11 tips. We’ve removed the wrong code and the whole article is visible again. Your comments are much appreciated.

  13. Danny Larousse says:

    Good article, thanks.

  14. Mahagun Mezzaria says:

    Great Article. I am agree with your point of view, it is important to match your products with store.Goods are always treated and protected by owner.

  15. Lotus Green says:

    Awesome article. Great tips for retailers they have to maintain products before their consignment.

  16. Jonah Beyl says:

    Some really great content on this internet site , thankyou for contribution.

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