Consignment

Selling your stock through online shops

Consignment: How it works

How consignment works
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How consignment works

See Self Trading.co.uk for an interesting Consignment based online business-model. Self Trading clears stock from shops, department stores, wholesalers, manufacturers and liquidated stock. Advertise your stock on their website. Also see UK Drop Shop.com for work from home ideas.

See here for a description of drop-shipping and consignment shops.

Consignment (Amazon.co.uk)

Consignment on ebay

Ebay Top Rated Trust Banner
The Ultimate Consignment and Thrift Store Guide An International Guide to the World's Best Consignment, Thrift, Vintage and Secondhand Stores
The Ultimate Consignment and Thrift Store Guide
ratings
(USA, UK)

What is consignment

According to Word.Net, consignment is the delivery of goods for sale or disposal. Goods are consigned from one person to another using a consignment agreement. The definition of consign is to give or to entrust and to deliver for the custody or sale. Consignment may imply a permanent transfer of goods from the maker to the seller - although this appears to be ambiguous in many definitions. Consignment allows a shopkeeper to stock his or her shop without paying up-front for the items.

Please Note: Whenever contracts are drawn or deals are made between parties, legal advice should be sought at all times.

Consigner/Consignee Relationship

In a consignment relationship, the designer sends their products to the retailer. The retailer then puts the products up for sale. When a product sells, the retailer pays the designer a portion of the selling price.

  • In a consignment relationship, the designer gets 60% of the retail price and the retailer gets 40%. Occasionally, you will find shops operating under a 70%/30% split, but this is rare as it isn't sufficient to cover a shop's overhead.
  • The designer pays to ship the products to the retailer and the retailer pays for all shipping and handling charges associated with mailing sold merchandise to the customer.
  • The retailer is responsible for advertising, credit card & PayPal processing fees, web hosting & shop upkeep, product photography, copy writing, packaging, shipping & handling, and customer service.

Books on consignment

Three Weeks to Ebay Profits: Go from Beginner to Successful Seller in Less Than a Month
Three Weeks to Ebay Profits: Go from Beginner to Successful Seller in Less Than a Month
(USA, UK )
Titanium eBay by Skip McGrath
Titanium eBay by Skip McGrath
(USA, UK)
The Trading Assistant's Assistant: How to Start a Part-time Job or Full-time Consignment Drop-off Business on EBay by Hillary DePiano
The Trading Assistant's Assistant: How to Start a Part-time Job or Full-time Consignment Drop-off Business on EBay rating
(USA, UK )
Start and Run a Profitable Second-hand Store (Self-counsel Business) by Richard Cropp
Start and Run a Profitable Second-hand Store (Self-counsel Business)
(USA, UK)
Start Your Own Clothing Store And More: Children's, Bridal, Vintage, Consignment [Paperback]
Start Your Own Clothing Store And More: Children's, Bridal, Vintage, Consignment [Paperback]
(USA, UK)
Used Kids Clothing Consignment Shop Start Up Business Plan
Used Kids Clothing Consignment Shop Start Up Business Plan
(USA, UK)
Complete Guide To eBay Consignment Sales
Complete Guide To eBay Consignment Sales
(USA, UK )
How to Start a Consignment Shop and Make It Go
How to Start a Consignment Shop and Make It Go
(USA, UK)

Also see:

Delayed Payment

The important aspect of consignment is that the shopkeeper pays for the item only after the sale of the product. The designer receives money only on the sale of the goods, unless otherwise stated and agreed to in the consignment agreement.

What is the difference between consignment and drop-shipping

Drop Shipping is an arrangement by which the retailer sells a designer's products through an online shop. However, unlike consignment, the merchandise is never sent to the retailer. Instead, when a product sells, the retailer contacts the designer and the designer is responsible for shipping the merchandise to the customer.

What is the difference between consignment and buying wholesale

Wholesale is a means by which a retailer purchases products from a designer in bulk at a discounted rate (commonly 50% of the retail price). The retailer is then free to sell the merchandise for profit.

Advantages to Manufacturer

The following are the advantages of selling to a boutique/shop on consignment:

  • Manufacturer gains wider marketing footprint for the product
  • Manufacturer gains possibility of increased sales
  • Higher turnover of stock
  • Frees up the designers time to do design rather than worry about sales and marketing
  • The commission structure for consignment is usually higher than for wholesale
  • Consignment is easier for the designer as the designer doesn't have to sell in bulk (requiring large numbers of products) in order to achieve sales
  • Consignment is great for one of a kind products

Disadvantages to Manufacturer

The following are the disadvantages of selling on consignment:

  • Theft of product a possibility whilst in shop
  • Product not sold and not returned by consignee if not sold. It is important to research your consignee company if you are a designer.
  • Breakage of product whilst in shop
  • No guarantee that item will be sold
  • No money up front
  • Selling of product within the shop less important to consignee due to lack of pressure to sell to recover costs
  • Transportation costs carried by manufacturer may be lost if item is not sold

Solutions

An agreement can be agreed to and signed by the consignee that mitigates the disadvantages to make the consignment a more profitable venture for both parties.

If interested

If the shopkeeper is interested in entering into a consignment agreement then please contact Boot Kidz using the enquiry form or sending an email or telephoning. See contact links.

eBay Consignment

eBay Consignment
How to Start and Run an eBay Consignment Business rating
(USA, UK)

Earn thousands selling consignments online. Written by a well-known eBay PowerSeller, this book explains how you can make thousands of dollars per week - with little to no up-front risk - as an eBay consignment seller. You will find out how to set up an eBay business, locate and work with consignors, determine which goods will sell, and charge appropriately for services. Ready-to-use ads, forms, and contracts are included.

"This book has to be one of the best business books I've ever read (and I read loads) it's not the usual theory - pie in the sky stuff, but is an actual how to do it kind of thing. I wish I'd had it when I started up bayagent.co.uk. The only reason it ain't 5 star is it's American based so 33% of the advice doesn't make sense in the UK. That said at least it gets you thinking about the areas that need thinking about. Get it bought!! ", GK, Durham, UK rating

Skip McGrath
(Home Page, Amazon Page)
Skip McGrath is the Daddy of this business and sure knows his stuff. I have looked at similar materials before and they lack a certain something that Skip provides. I'm not a fan of this business model but the guy is an ideas machine and if you can allow that the book is biased toward the american market you will probably find this to be a major reference in Consignment selling and Ebay in general., JD, UK rating

Art Consignment

The Artist-gallery Partnership: A Practical Guide to Consigning Art
The Artist-gallery Partnership: A Practical Guide to Consigning Art (now 3rd Edition). (USA, UK )

With artists, craftspeople, art dealers and gallery and shop owners in mind, this book discusses consignment contracts, aiming to clarify all the aspects of this art world relationship.

The Consignment Workbook

The Consignment Workbook: How to Make Money Selling Used Goods on Consignment
The Consignment Workbook: How to Make Money Selling Used Goods on Consignment. rating
(USA, UK)

"The Consignment Workbook offers great material to entrepreneurs who seek to start up a consignment business. This is a fantastic resource!! It lays a solid foundation for new businesses, or can even give a jump start to established shops. Information is based on the experiences and lessons learned by the author and her partner who have owned three different consignment shops in Vermont. All aspects of this retail business are covered including how to begin and set up your business, sources for supplies, networking, advertising, what to expect, dealing with customers, banks, insurance agents, etc., tips on increasing income, and more. After reading this book, I felt I had a very honest and realistic view of the consignment business. The appeal of this book is in it's integrity, simplicity, and the author's love of the consignment business which shine through page after page!! I used this book as my main guide for starting up my successful consignment business and continue to use it as a valued reference! I cannot praise it enough!", CR, Shady Side, MD USA rating

Secondhand Chic

Secondhand Chic
Finding Fabulous Fashion at Consignment, Vintage, and Thrift Shops. rating

"A fab book containing all you need to know about recognising quality clothes and accessories - really useful even if you don't shop vintage! Weil describes the different types of fabrics, tells you what details to look out for and how to care for your stuff. She also goes through the various types of secondhand shops and what you're likely to find in them. The book insists a lot on designer names, but the information can be applied to no-brand stuff as well. What she doesn't do is give you an in-depth history of fashion - although there is a summary of the main silhouettes of the 20th century, decade by decade. She also won't tell you how to integrate your vintage finds with your everyday wardrobe. All in all, it's a really good foundation book - everything your mum should have taught you about buying good clothes! And there's a list at the back of recommended brick-and-mortar and online shops.", SD, Cardiff, UK rating

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