After dabbling in local fairs and online markets, I realized I was spending too much time trying to sell goods myself. Many people find that selling online draws very few customers while selling at local venues requires too much time and money setting up. So what’s the alternative? After ditching those selling routes, I decided to sell my items on consignment. It proved much more profitable and efficient. Here’s what I learned.
1. Use a store’s high rent and visibility. Let’s face it, you may never be able to get a downtown spot to open up a retail store selling your handmade scarves. However, if you can get into one of those stores, that’s even better. Consignment works where you place your items in a store. If it sells, you charge the store what they earned from the sale. You don’t need to pay to have your items there and the store gets free inventory. Meanwhile, you get local visibility that you would never get from renting retail space or trying to sell the items yourself.
2. Be prepared. While most stores will just let you try out your goods in a section of their store, others are more selective. More corporate stores may want to see all of your business information and may even require insurance to cover any liabilities they may incur from your product. It’s important to have this on hand if you want to place your items in more established stores.
3. Find out what types of products you want to sell. While consignment is very profitable, not all items are suitable for it. Perishable items, like food, are not good because of short shelf-life and a higher liability cost. Heavy items may take up a lot of space in a store which may detract store owners from doing business with you. Expensive items risk getting lost or stolen and can be difficult to recuperate the fees from store owners. You want your products to be convenient for the store owner to display and easy for customers to buy. It’s best to stick to small, low cost items that can easily suit both.
4. Maintain a careful relationship with the store owner. There are, often, two ways people sell their items on consignment. They leave their items in the store and come back to document how many are missing, then charge the store owner for the quantity. They also charge the store owner a flat subscription fee, at the end of a certain period, no matter how many items sell. You will be collecting your money from the store owner. So it’s best to work out an agreement with them on how you will be paid. To reduce fraud and theft, it’s just as important to find the right store owner as it is to find the right store.
5. Research your market. Based on what you are selling, you will need to know the right stores to put your goods into. You can’t just blindly approach every store. You will need to find out what the market is for your item at each location. There’s no use approaching a convenience store about consigning your handmade soaps or approaching a beauty salon about your homemade jams. You will need to find out what people go to these stores for and if your product meets their interests.