Consignment Store Record Keeping

[Callie Beller Diesel]

So this week, I have unfortunately had my personal distrust of consignment agreements reinforced as a shop that just 3 months ago had been going strong has gone under, and there’s been a lot of difficulty getting stock back. No one’s even talking about payouts. 
 

Because I think this unfortunately won’t be an isolated incident, I’d like to encourage everyone to do a rough inventory of work that’s consigned, and compare it with what you’ve been paid out for. If you need to be in contact with landlords to reclaim your product, being able to prove which items are yours will be important. If any consignors that you are with use software that you can check your stock levels on such as Riccochet, download your reports now, and monthly thereafter. If the proprietor stops paying  for their subscription on these cloud based systems, you will not have access to information you’ll need for taxes etc. 

It’s a little CYA action. We’re in some hope for the best but plan for the worst situations right now. 

[Min]

Sorry to hear this Callie. Hope you didn't have a lot of stock with them.

[Callie Beller Diesel]

Thanks @Min  

We should all be able to retrieve our stock. It’ll just be a production to do it. Keeping good records helps. 

[LeeU]

Disappointing to hear. I am getting concerned about the artisans shop I've been invited into. It is technically consignment, with a low cut taken and a shelf fee. The owner sent out a pretty rinky-dink contract (one of those free online forms, but not the best I have seen). To protect myself, one sentence needed a fairly minor change, and I sent it back with the change written in & initialed, for her to retype for signatures.  Haven't heard a word since, and 3 emails have gone unanswered.  Probably the person is just super busy and not the most fastidious businesswoman, but I don't like the emerging feeling of having even a little bit of doubt.

[Mark C.]

Been there done that about 35 years ago -no fun

[Roberta12]

Yeah, I am dealing with that right now as well.  I think it will come out ok, and I do have records and lists.  Tough times for everyone, but I expect people to be on the up and up.  

[LeeU]

Well, I am feeling better-I went & met the shop owner and while I am clear that her business mode is definitely not one I care for (casual organizational style/attention to detail lacking)  we had a decent & clarifying conversation and I felt an understanding was reached in terms of the basic communication needed on my end. I've got idiot-proof paperwork for inventory/sales etc. and  photos of every piece/coded etc. so I'm going to give it a go. I'll do anything to avoid craft fairs and this is a great compromise to get my work out "locally". The shop is on the main route to a large rural resort area (hiking/swimming/boating/skiing-year round and several major tourist attractions in the White Mountains. She's done a nice job with landscaping, newly finished pine floors, fresh paint etc. and she gave me a larger display unit for the price of a smaller one. I think it's about 100 vendors-what I saw already put up looked great-homemade quality crafts-good variety. Yee haw. She's opening for Memorial Day (which I think is nuts but I know people will be out & about) There will be a grand opening after NH moves into the next phase of a stepped "reopening"- no date projections yet. Fine with me!  Max of 10 in the store at a time, staff w/masks/glove, available hand sanitizer, separate entrance/exit doors (masks for customers not required, but encouraged). I am so blessed that all I care about is paying for my clay/supplies/overhead  and that I do not "need" profit for my own survival.  I can't imagine how stressful & worrisome it must be to not be able to work for so long, especially for those who rely on big shows to generate a chunk of annual income. 

[Stephen]

Congrats on the new spot! 

What's the routine and how do you get paid? Around here consignment seems to be 65-70% to artist and wholesale is 50-50.

[oldlady]

looks like a great shop to be in, hope it works out to your satisfaction.   (is it near Waterville valley ski resort? took the kids there in 1976 for a week.)

[LeeU]

On 5/22/2020 at 1:09 PM, oldlady said:

is it near

Sorry for delay Lady-I've  not been on in awhile. The resort is about 50 mi/60 minutes further north.  Stephen-she takes less than 20 per piece, plus a reasonable monthly shelf fee-part of the owners desire to really support local artists.

[oldlady]

well, it has come to this.    there is a farmer's market in maryland where i have sold just a few items in the last 2 weeks.    the good (?) part is that the manager of a specialty craft gift store has approached me and asked for some of my larger pieces for the shop.   it is apparently a consignment store.    i  was not familiar with it so i suggested maybe, found that the split is 35% for store and i get 65% and checks are on a monthly basis.  

visited it last tuesday and found it is a very handsome store with every kind of high quality craft, crowded to the rafters but it doesn't feel that way.   it is related to an inn across the street and there are 2 other locations as well.   hhmmmmm.  so i did the math and find that 65% is not much but i would not have any entry fees like a craft fair would.   i would not have to spend time selling like the previous year's guild gallery.   no driving many miles very early and 14 hour heavy labor days.  no searching for another fair for an empty weekend.  yes, my work would not be available for a different location but there are none anyway these days.  my stuff has been sitting in boxes in the studio with no exposure to a possible sale otherwise.

they want my high priced items, 7 on the first day and  i can deliver and more as they sell.   the room rates at the inn start at $239 per night so the prices will not deter their usual inn customer.  so  i have cleaned up the 7, stitched (badly) 1/4 inch foam envelopes for each,  and plan to deliver them on tuesday.   

now for the question for those of you who know this market.

what info should i get on paper from the manager?   a list of questions is what i really want.   i plan to photograph each piece with its price on a separate paper sitting on the piece in the photo so i can know exactly what is there.    i also have a notebook that will be for this arrangement only, on paper because i still hate computers.

OK, that's it, what should i do next?

 

 

[Roberta12]

Hi Old Lady!  It sounds like you have most of the details.  If the store owner doesn't want to lock you in for a certain amount of time, it could be a situation where you try it and see what happens.  If you find it is not working for you, you can change your mind.  After having muddled my way through a few consignment situations, the best advice I can give you is, get a contract in writing.  Just get all the details in writing.   Do they put tags/barcodes on your work and enter it into their system?  Or are you expected to price and tag your work?   Are you pricing your work in order to reflect what you need to get out of each piece?  I type up a dated inventory sheet with specific descriptions of each piece and keep that.  If I remove work (for whatever reason) I make note of that on  my inventory sheets.  Will the owner have a problem with you changing out your work?  Will the owner  proprietary?  If someone in that store contacts you directly for a piece, will the owner have a problem with that??   

You are correct when you say it does eliminate the schlepping of heavy boxes, canopies, etc.  Right now I have 2 consignment situations.  The one in the ski town 40 miles away is amazing.  70/30 split.  They have an online consignment access that I can check at any point to see exactly what has sold.  That is convenient, because often I am sending my wares with someone else to drop off.  I can request a check at any point (right now, I get a check quarterly) and because it is a destination town, I have a lot of exposure and it has been a great situation.  However, most consignment agreements in that town are 50/50.  

The other consignment situation I have is local.  It has not always been ideal. It also is a 70/30 split.  Payment is sporadic.  After having been through 6 numbering systems with them, I have developed own system and do exactly what you are going to do.  Take pics and document.  It is a high maintenance situation and I am sure you are wondering why I still have my work there.  Small town rural we all live in one another's bubble, is the only explanation I can give.  @Mark C. and @GEP  don't roll your eyes at me.  

I have one more local situation where I rent shelf space.  I actually like that.  I can take $100 or $1000 worth of inventory to that shop for a flat monthly fee.  She enters all my work into her system.  And gives me a printout each month of what has sold.

The other benefit from consignment (at least in Colorado) is that those places collect and pay the sales tax.  When I get my check, the sales taxes have already been paid and I do not have to do that.  

Alice, I am sure people with a lot more experience than I have will be able to weigh in and give more advice.  But...in these days, finding appropriate ways to sell our work is a good strategy.

Roberta

[Min]

18 hours ago, oldlady said:

 i plan to photograph each piece with its price on a separate paper sitting on the piece in the photo so i can know exactly what is there.

What the shop wants on the inventory sheet, ie do you code and price pots or do they. How often they expect you to drop off pots as they sell or after X number of them have sold.  If a customer contacts you after seeing your work in the shop do you owe the shop a commission. Are you allowed to put some business cards with your work or with the store to give out to customers if they request your contact info. Product care info for the shop, ie dishwasher/microwave safe etc. so they tell customers the same thing you would. They might want a short artist statement or bio.

Read over the contract, make sure it includes what you want it to include, not just what the shop wants. Store covers theft or breakage and pays you the 65% or ? When and how they make payments to you, timeframe for keeping work in shop. Time frame for unsold items ie 6 months or ? Termination of contract details.

@Roberta12, lucky to get a 70/30 split!

[Mark C.]

Just put the details in writing that you want and they do the same and you come to terms and sign it.

I have two consignment stores left.I started doing this in 1973 with a few local shops. It was about 1/3 of my income now its less.

I acually like to split my income streams and this is one way that has worked well for me.

'1st let me say I have to TRUST them. As this only works on trust. I sell lost sof small stuff at one of the two outlets. One is 50/50 split they do all the pricing and send a check out every 15th of each month. I'm their #1 seller. I trust them and have been in that shop for many many decades . They have a huge display of my work and a window display as well. Some months they gross over 3k a month during tourist season-they sell pottery and its year around. I am always taking in truck fulls of pots.This place sells work and lots of it.

The other shop is about 20 years old now and its 60/40, 60% for me and I do all the pricing..They every  month or every other month depending on sales. I trust them but they sell less due to less foot traffic . This shop  has a nice glass display (shelves) of my work and also scatters it around (always a bad idea). They are in a smaller town. She is honest and I trust her.

Now this all said I do not pay attention to what is sold and if I got paid as I'm selling far to much to do that and its a volume sales-the one store sells over 20k of my pots and I would rather just make and sell more than count whats going on. I did that long ago and now trust them 110%.If I felt they where taking me for a ride I would leave and that would really hurt them-we both know this..The same is true  with the smaller shop-they depend on my sales.I feel at thsi time I'm in the drivers seat but its also one where If I retire they may not survive .,which is not a good place to be.

I lost a consighnment shop after 30 years in Mendocino Ca and that shop depended on me but closed due to health reasons.I let it go and it fit my downsizing plan.

I had another shop on consignment for 40 years and about 8 years ago I turned them to wholesale  only as I did not get along with new owners-we grossed about 20k a year at 60/40 now they buy outright twice a year maybe 5k  total of pots as they are idiots. They have a very popular summer tourist resturant/shop. They sell out all the work in a few months and reorder every 6 months-they are poor business people as many who own business are. I'm amazed how many survivors of poor business there are out there.

I can write a new contract as thay can every year as long as we both agree on it. I a have had minor troubles with these type of shops dispaly other items in my work like rubber sharks in a bowl etc so I have that in my contract-buy the work and you can do what you like. 

Many shops cannot survive on the 60/40 model any more so they upped it to 50/50

If my 60/40 shop asked for that I would say they must do the pricing for example .

My wholesale  business  is what has taken off but I like the monthly checks and they pay the sales taxes as well. Its a great thing to have in the  income mix and its been good thru the pandemic as well. I used to have consignment and shows nevefr any wholesale now I let the  wholesale  side in as I downsized fairs some and thats worked super well in recessions and pandemics .

 

 

[oldlady]

thanks, all of you.   i now have a notebook with questions.    i have talked to a potter whose work and that of her son are in the shop.   she is very happy and her son is even happier with the shop and their trustworthiness.  

taking things today since tomorrow is a big rainy day forecast. 

thumbs up!

[Mark C.]

10 hours ago, Mark C. said:

oops double posting

 

 

 

[oldlady]

signed the contract, got the questions answered and left most of my big pieces to sell.  will get a 1099 for taxes.  she took a photo of me holding one of the lovebird trays and she is putting my stuff online under the shop name.    she wants some of the smaller items as well.     giftsinnboonsboro.com.   if the name seems familiar, do you read Nora Roberts books?   she did a trilogy on the inn and owns it.

thanks, all, i used all the questions and am satisfied.   there really is some great stuff in that shop.

[Stephen]

Hey congratulations on the new account and the 65-35 split!

It's nice to see the rate. I get very confused with the word being that many shops now need 50-50 on consignment to survive. Makes no sense to me at all. To me its the same as a real estate agent saying they need to increase the 6% commission rate because its been 6% forever. Of course since prices have risen dramatically over the years they have in fact been getting a steady raise all along and make much more  money more often than not year over year. A percentage means floating and by definition is not a stagnant commission if prices rise and they should. I think the 50-50 consignment crowd just plain wants their cake and eat it too and we are not going to do it. Wholesale is 50-50 and consignment is 65-70 to the artist. They just need to price the work right and if they want/need a 2x markup then they need to take the risk and invest in the inventory as most other shops have to do with manufactured items. I seriously doubt that any shops/galeries can buy any manufactured goods for their shops at less than 50% in any kind of numbers. Wholesale already has a pretty industry standard 30 day net payment terms and that gives them the possibility of selling and remitting before having to pay if they can get the buyers in and match the inventory to what they want.

Maybe I'm harsh but I think its just a situation of owners exploiting the situation and your new account didn't even try to do that. They get it and its a win win for you and them.  

edit: By the way I went to the link and thought you should know that they do not have you listed as one of the artist. I went through the list and 'old lady' is simply not there.

 

[GEP]

1 hour ago, Stephen said:

I get very confused with the word being that many shops now need 50-50 on consignment to survive. Makes no sense to me at all.

Just for some context, Nora Roberts owns a big chunk of the town of Boonsboro. I bet the inn and the shop are owned free and clear, which means operating them has much lower overhead than typical businesses, and that she can afford to subsidize the shop. Good for her for using her wealth to bring tourists to buy work from local artists. 

[Mark C.]

Its good to be Queen

[oldlady]

thanks, stephen,  i needed a big laugh today, the last really nice, warm sunny day before the cold front comes in tonight.   did you see my work?   the website is less than good with only 9 things on a page.   they used my price figures, their special price tags.

[Callie Beller Diesel]

Lol! @oldlady, your pieces are listed on the second and third pages of the “new artist” listings, and they look lovely. 

[Mark C.]

Saw your work on thatw eb site  and had no trouble  finding it as it like the piece I have. Good job now sit back and wait for the checks and make more for them to sell.This placelooks like iut has more brick and mortar customers than web business.

Put your feet up as the checks are in the mail

I love mailbox money (new Jimmy Buffet tune as well)

[Stephen]

4 hours ago, oldlady said:

did you see my work?

I think so. Went to your albums and then their shop. Very nice work! I'm sure you do well at shows hope this account works out well for you.

 

[oldlady]

wow,   it is so nice to have some positive words from fellow potters.   i really miss the interaction with buyers, i did not know how much.   thank you all.    maybe that is enough to get me back into the studio to make SOMETHING this year.