Back to Ganoksin | FAQ | Contact

Best way to handle consignment


#1

So far I’ve been turning down anyone who wanted to do consignment
because iwas afraid of getting paid. But it looks like some of you
are having OK experiences. Does anyone have an agreement form they
use or can you recommend the best way to handle consignment? I’d feel
more comfortable with consign ment maybe if I knew there were some
tried true methods.

Gerry

SAMPLE Consignment Agreement


#2

Gerry- Folks like your stuff enough to ask to sell it in their
galleries. That’s a good thing.

We have never, in our combined 68 years in the trade, had a
consignment agreement.Never once had a problem getting paid. We have
our stuff in shops all over the country. Guess we’re old school
jewelers from the “handshake days” when a jeweler’s/broker’s word was
his bond.

Most of our work is special order, so when a gallery sells something
it’s like money from heaven to us. When that happens we send a gift
of fancy chocolate to the owner or employee who sold the piece.

That’s our tried and true method.
Jo Haemer
www.timothywgreen.com


#3
Does anyone have an agreement form they use or can you recommend
the best way to handle consignment? I'd feel more comfortable with
consign ment maybe if I knew there were some tried true methods. 

Gerry, sorry so late to respond!!

I think the most important thing about consignment is to know the
gallery. Ask for references. Call the artists and talk to them about
the gallery.

Some things to ask:

Do they pay each month? Or do you have to call and ask them to check
their inventory (I hate that!) Do they send out an inventory list
with the check (I’ve had galleries not do this!). Do they send a list
of what they have left each month? How organized do they seem? How
are
they to work with overall? Would they recommend them to a fellow
artist?

Of course, add and subtract as you will, just a few things off the
top of my head. A contract is not a guarantee, but it does help to go
in with one. Adds to your credibility as a business person. I’ve
never used one but someone just gave me hers. I can forward a copy to
you if you still need it. It’s pretty standard.

Oh, I would also ask about the split- 50/50? and what’s their
markup?

Hope this helps. Better late than never!

Amery Carriere Designs
Romantic Jewelry with an Edge
www.amerycarriere.com


#4

From a retailer’s perspective, I love to have consignment jewelry,
especially from local artists. Our customers really like to see
local artist’s work side by side with ours as well. I have never had
a written agreement, I’ve never been asked to. We do get and maintain
an inventory list with costs, but so far, no written contracts.

We do on the other hand have an agreement that we sign with our
retail customers when they wish to put their jewelry in our estate
consignment case. It is specific as to requirements for appraisal and
repair of damaged or worn pieces and the money the customer will
receive upon sale, but does not address our markup.

We generally mark up 60/40 (40% over the artist’s price to us) for
consignors within the trade (30/70 for more expensive pieces, say
over $2000), although the industry standard as I understand it is
50/50. Keystone (50/50) or more is fine for things I own and buy, but
on things I don’t pay for until they sell, I personally consider that
a little lop-sided. I do have my overhead, insurance and all that,
but for the most part I have that anyway, so why should I charge a
craftsperson for the privilege of displaying and selling their work
(which I value and consider an honor to show and sell)? It’s no money
out of my pocket until I get paid. I reserve the option to discount,
but it comes out of my end, not the consignors.

Bottom line, I just want to know how much the artist wants, and then
I’ll mark it up appropriately. I’ve been known to pay more than the
artist asked for because a piece sold at a keystone mark up right
away. I also pay 80% to 100% (of whatever they want “Suggested
Retail” to be) to local artists for showing their work at our trunk
shows. I just love to have them here. So do my customers. The more
the merrier!

We settle thirty days after a sale, mainly because of our 30 day no
questions asked return policy. I’ve never considered sending a copy
of our inventory list with monthly settlements, I’ve never been asked
to. I will start doing that though, based on Amery’s post.

Good question and I would be interested to hear other retailers’
insight on this if anyone else wants to weigh in.

Dave


#5

I work with a store on consignment and she has a great way of
working. When I bring in jewelry she lays it out and takes a digital
image on the spot. She prints out two copies, I write my price on
both copies. She marks up all her merchandise the same, somewhere
around keysone plus 5%.Her return policy is two weeks, after that
she cuts me a check with a statement of which piece were sold, I mark
my inventory sheets and I always know what is left in her store. She
is very honest.

Easy peasey,
Sharon Kaplan
sharonkaplandesign.com


#6
We do get and maintain an inventory list with costs, but so far,
no written contracts. 

Please don’t take this personally, Dave-- you sound like a prince
among men-- but I’m horrified by the idea of no contract. Way too
easy to have misunderstandings. The number of things that can and do
go wrong with consignment is myriad. As someone else said, a
contract is not a guarantee, but it is at least a start.

Pieces come back tarnished. Pieces come back broken (this just
happened with a gallery I got here on Orchid!) One gallery within
walking distance of me turned out to add 10% extra to prices
(without sharing with the artist) “to cover return shipping on
unsold pieces”. I pointed out that the contract said they got 50%,
not 60, and I walked in to deliver and pick up… “Oh, yeah, guess
so, sorry…”

Right now I have work in NO galleries. I will again, if I can
interest well-known high-end places, or ones that buy outright. But,
boy, I’m pretty disillusioned with consignment. Even WITH a
contract.

Noel


#7

Hi Noel,

No offense taken. I understand exactly what you are saying, and I
don’t have any problem with a contract. I would never tell someone
not to use one if that’s their desire or turn down someone simply
because they wanted a contract. I’ve just never been asked to sign
one. But I also know most of the people who’s work I have showcased
personally.

I’ve never been burned in a consignment arrangement, but believe me,
not all of the risk is on the consignor’s end. Trust and risk are
both two way streets.

I'm pretty disillusioned with consignment. Even WITH a contract. 

Kind of proves the value (or lack thereof) of a contract. I try to
deal with people I trust and that trust me. I also trust until I have
a reason not to, and then I just don’t deal with that person or
business anymore. I’ll bet that’s exactly how you are going to handle
the galleries you mentioned. Who’s the real loser there? You got a
broken and/or tarnished piece back and they’ll never have the
opportunity to showcase your work again, let alone have it with
little or no money out of pocket. Both of you lose, IMO. But the
galleries get this month’s Shoot Yourself In The Foot Award.

I also wonder about the practice of telling your consignees how they
should be pricing your merchandise. As a wholesale manufacturer, if I
told my clients what they are to charge their customer for a piece I
made for them they would look at me like I had two noses. Same with
repair work. I give them a price for what they want done, what they
charge for it is none of my business, as long as they pay my price.

I am curious as to how and why consignment differs. If they are
pricing it higher than you are in your place of business, I would
think that would be a good thing for your sales, no? Do they not have
the right to discount if they want to? If they do, do you get 50% of
the sale or your agreed price? Maybe this is why my consignors have
never asked me to sign a contract. They give me their desired price,
I take care of it while it is in my care and I pay them when it
sells, regardless of what I sell it for.

The bottom line is that a person that makes beautiful and saleable
jewelry but has limited means of marketing it and a retail business
that has a need for such things to add variety to their inventory and
make their marketing that much more profitable have a need for each
other. If trust is broken, both parties lose, IMHO. Contract or no
contract.

Dave


#8
I am curious as to how and why consignment differs. If they are
pricing it higher than you are in your place of business, I would
think that would be a good thing for your sales, no??

Good point - from an honest businessman. Speaking from experience
with the other kind, I had a gallery quadruple my prices,
unbeknownst to me. Her own pieces, with more stones and precious
metal, looked very reasonably priced next to mine. (They were
observably NOT subject to the same mark-up.) Her cases showed 100%
turnover after several months, while I had sold nothing. (When I went
in to collect my pieces, she noted that several pieces were “missing”

  • and immediately left for loooong lunch. When she returned to find
    me still waiting, she reluctantly wrote me a check.) She invested
    very little - some showcase space - to market her own items. A
    learning experience for me - now I ask what the prices will be. In my
    opinion, consignment differs in that the gallery owner does not own
    your pieces - until sold, they are still your property. The gallery
    is responsible for them, but that’s not the same thing, and while I’m
    sure that my experience is not common (I’ve never had that problem
    before or since), it IS possible that the gallery owner might have a
    different goal than selling your pieces.

Susan (Sam) Kaffine


#9
it IS possible that the gallery owner might have a different goal
than selling your pieces. 

This is a point that bears repeating. There is no doubt in my mind
that gallery owners do not need to be nearly as sure that pieces
will sell in their location if they are only consigning them, and it
does happen that a gallery may accept work to make the gallery look
interesting or classy or whatever rather than because they believe it
will sell.

Noel


#10

The best way to handle consignment is not to do it :slight_smile:

In the majority of consignment relationships the store gets all the
benifit and the artist gets very little. You must make the work and
incur all the expenses of that in materials, time and overhead cost
and then “loan” that value to the store without any compensation for
the loan. It is a good way to make nothing on your work.

Think about this if you make 5% net (which is not an unusual final
net profit for a business) and you have work out on consignment for a
year you could have made more on your money by putting it in a money
market account for that year.

And we will not even think about the equation if you bought any of
your materials via a credit card and are caring that amount as a
balance.

Make work that sells and let the banks be in the loan business.

Jim

James Binnion
@James_Binnion
James Binnion Metal Arts


360-756-6550


#11
There is no doubt in my mind that gallery owners do not need to be
nearly as sure that pieces will sell in their location if they are
only consigning them 

I partner with 4 other artist’s in a gallery. We keep 95% of our
sales ourselves, the other 5% going to the store for CC costs etc.
It is VERY much in our best interest to sell consigning artist’s work
as the store then gets 50% of that sale. On the 15th of every month
our rent is either up or down, depending on how much consignment we
sold. But no matter what, the rent comes due. Just another way to
look at it.


#12

James

The best way to handle consignment is not to do it :-) 

First of all I must say that I am always amazed at the knowledge you
have tucked away in that brain of yours and I usually would never
counter point one of your answers, but here goes. I agree that if you
can sell your work you should, but there are many people that have
work that most stores or galleries would not take the chance on
buying. If it is a way to get their work out in the world I say go
for it. I have several artists that I send on average $500 a month
to. I do have others that sell only occasionally, but at least it is
a sale for them. Of course there are downfalls but there are
downfalls of only selling also. Doing a wholesale show and not
having enough sales to pay for the booth rental, having one store not
pay for an order, advertising cost etc etc etc. We do our best to
take care of our artists and I think most galleries do also, but you
always hear the horror stories. Like the mad customer that tells 10
people vs. the happy customer that tells 2, orchid is similar. You
hear the bad all the time but never much good, I wish the artists who
do consignment and are happy would chime in once in a while. I do not
need to have any other artist in my store, I could do fine just with
me. The reason I have others is to support the small studio jeweler
and give them an outlet to sell. Of course it gives me inventory that
I would not have because I do not do the type of work they do. Is
this helping me, yes, is this helping them, I say yes. I also support
artists finding the area of the country that works for them, if they
need to pull their work and go elsewhere it is fine with me and they
should. I have been in the retail jewelry business for 32 years and
art jewelry gallery for 3 years and it is amazing to me the lack of
general paper work the artists do for themselves. When my diamond
dealers memos goods and I sell a few and pay for them they know
exactly what I have and what I have paid for the next time they call.
I think many of the problems with consignment would not happen if the
artists would follow up more and keep better records.

Just my two cents.

Bill Wismar
www.metalbendersgallery.com


#13
Make work that sells and let the banks be in the loan business. 

Well that really is the core of the problem isn’t it? You have Joe
Jeweler, small scale, doing his thing but finding it hard to make
cash sales. He doesn’t want to make ‘commercial stuff’ cuz that’s not
his bag, although commercial stuff is a safer bet if you just want to
make easier sales. So he consigns it somewhere and takes his chances.
Maybe he’s new and so he is forced to finance the sale or maybe make
no sale. Yes he has to absorb the ‘carrying charges’.

But wait a minute…who says he can’t get paid anyway for those
carrying charges? Instead of charging $200 he could just as well
charge $225 or 250. In the mainstream jewelry industry memo costs a
buyer more than a spot purchase, its just not itemized as an extra
charge. Make your consignment price the 250 but offer a discounted
price of 200 for cash, grant 30 days if you really need the velvet
hammer. If the gallery likes it enough to show it, maybe they’ll like
it enough to buy it at what they believe is a significantly better
price. They’re going to mark the piece at keystone or more of the
full price anyway, that’s their incentive to buy at a discount vs
regular consignment. Mo money in their pocket.

I have taken consignment now and then. The prime motivator for me
was to fill the case at little risk(I’ll assume its the same for
galleries). But when its time for a sale, the customer is choosing
between something I own(paid for) and something on memo(for which
I’ll need to cut a check), where do you think I’m going to try to tip
the scale? If you convince the gallery to buy outright you will
reverse this competition within the gallery/store itself and maybe
you’ll see more sales down the road. Maybe offer them a purchase
plus memo deal. Buy these three pieces, discounted, final sale and
they get three or more memo pieces for X period. I tell you as a
retailer that’s tempting. But as Mr. Binnion suggests, it needs to be
saleable.

If Joe goes out trying to sell one or two pieces he may be sadly
disheartened. But if he devises a program that benefits his client
(Oh, and himself) he may actually close some bigger deals. It also
might be money wise for Joe to make at least some pieces that have
commercial appeal. Because the rent is due next week.


#14
I wish the artists who do consignment and are happy would chime in
once in a while. 

I’ve chimed in before, and I’ll be happy to chime in again :-)…
I’ve done consignment for the duration of my jewelry career and it
has worked extremely well for me! I’ve had two or three bad
experiences where an account went bankrupt and I never got paid (but
then neither did the creditors from whom those accounts had
"purchased" items); but I’ve had many, many, excellent experiences
which far outweigh the negatives.

Consignment works well for me because I produce relatively high-end,
one-of-a-kind jewelry; because I work slowly; and because I choose
not to live my life on the show circuit. When I was more active than
I am now, I did a few retail shows in the spring, a few in the fall,
and consigned the work through summer and winter. I recalled all the
consignment work for the show seasons which enabled me to keep
inventory moving around where it needed to be.

There are caveats, of course. You must research accounts before
trusting them with your jewelry. If you don’t check them out with
other artists they represent, you’re asking for trouble and have no
one but yourself to blame.

You should ask for regular statements from your accounts and if they
haven’t paid you for inventory sold, do not send new work until they
have and do not let them off the hook even though you hate to make
those awkward and unpleasant phone calls asking for payment.

Finally, be sure you have a contract (doesn’t have to be complex)
with each account and a fully descriptive inventory sheet (with an
authorized signature acknowledging receipt) for each account. Keep
meticulous records!

While I completely understand the reluctance of many artists to do
consignment, individual mileage varies depending on circumstances.
What doesn’t work for one may be perfect for another!

Beth


#15
I wish the artists who do consignment and are happy would chime in
once in a while. 

Well, I’m one of those who consigns work. I make one-of-a-kind
pieces, occasionally make a series but each one of the series is
still different. While I love making jewelry, I do not like selling
it. I can get excited describing what I do, but not asking for money
for it. So I choose to have someone else sell it for me.

I sell through a gallery run by a very astute person - beautiful
gallery -

excellent clientelle. She handles my jewelry - we have a contract of
sorts - it’s just a written document that both of us have signed
covering how things are to be sold and when payment is to be made,
but it further provides for what happens to my jewelry in the event
that either the gallery owner or myself should die. I have children
who would want to pick up the jewelry and divide it up, so their
names are listed and they each have a copy of this “contract”.

I provide her with a list of everything I make and give to her. It
indicates the dollar amount I want for each piece shown and she is
free to sell it for whatever she feels is reasonable - but she always
provides me with all the - the selling price, tax etc.-
when she sells something (which is fairly regularly these days).
Everthing in her gallery is insured, she keeps meticuluous records
and I receive my check within several days of the sale.

Our working arrangement is delightful and she is a wonderful person.
She often has special showings for the painters/sculptors and other
artists she represents and I benefit from those because my work
always is on display at the gallery and very prominently.

For me the process works. Better that I have the jewelry in her
gallery than in boxes at my home where no one sees it and it doesn’t
even run a slight chance of getting sold.

I’ve been showing my jewelry at this gallery almost a year and
things are now selling on a regular basis which is delightful. I have
no problem with providing her with jewelry to sell - she bears all
the expenses of keeping the gallery in top flight shape, of providing
insurance, of marketing, of having her tax accountant prepare sales
for me at the end of the year. She owns and manages a
beautiful well run gallery. For me it’s the best of both worlds - and
in addition it also provides an incentive for me to keep fabricating
new pieces.

Now this system may not work for some, but for me it is ideal and I
must say if it were not for consignment, then I probably would just
have boxes of jewelry sitting around because I am no marketer. I’ve
given away mucho jewelry over the years so finally having someone
sell it for me is perfect. I tried working in a co-op gallery and
though sales were not bad, they certainly were not of the quality
that I now enjoy, plus things were not insured, I had to pay for
advertising (it was shared with others in the gallery of course) and
I also had to “work” the gallery one day each month which I did not
enjoy as over the summer there was hardly any traffic in the gallery.

So I love having my work on consignment where someone else is
handling all the myriad of details associated with selling and
displaying. I painted for years and sold my paintings through a co-op
gallery and was very successful, but I’m retired now so it is great
to have someone else handling all the details of sales for me.

Kay


#16

Hello,

I wish the artists who do consignment and are happy would chime in
once in a while. 

All my work is placed on consignment, because all the galleries in
Kansas/Missouri do it that way, art museum shops included. The
drawback is that I have to have a tremendous amount of work out there
waiting to be sold, so there’s a lot of inventory tied up. Also, the
60/40 split takes quite a chunk out of the profit, and it’s nearly
impossible to raise my prices at the rate silver has gone up and sell
anything. So, that’s the downside aspect. But I digress, that’s true
in any case.

On the upside - I can rotate work from gallery to gallery when
they’re in different geographical areas, adding new things to the mix
periodically. And maybe it’s just good Midwestern work ethic,“salt of
the earth” type people and all that, but every gallery and museum
shop I work with has been punctual about sending a check and
inventory of things sold at the beginning of the month for everything
sold the previous month. It is also good to visit the galleries
periodically, and establish a working friendship with them. Several
ask that you do a Saturday “demo” occasionally too, which helps
promote your work to that community, and build that relationship with
the gallery owners.

So, consignment has worked well for me, but in this region, we have
no choice, because that’s what they all do.

One aspect that may be typical for this area, and of consignment in
general, is that we have to have a wide range of prices, because high
end things don’t sell terribly often. When they do, for me, it’s
usually at the Wichita Art Museum (a fine museum and American art
collection, where we have not one,but TWO of the "requisite"
Chihuly’s!!)

I work mostly in silver, enamel, and occasional embellishments of
gold, so “high end” for me is in the upper hundreds. So there are
lots of “bread and butter” items from $40 on up. Something for
everyone.

Linda G.
http://homepage.mac.com/lgebertsilverjewelry


#17

OK Bill I’ll take the hint. I have been doing consignment work for
about 15 years. I have had as many as 6 galleries at a time. Some of
them are good and some of them are a pain. Bill is one of the good
ones. Galleries come and go for whatever reasons, but the minute I
find I am not being paid for sales they are history. Other problems I
try to work out and continue the relationship. Bill is right about
keeping a count of your inventory. DO NOT expect the gallery to do
your book work for you. I use an excel spread sheet with a photo and
description of the piece and the wholesale price. With moving work
back and forth between my clients needs and the gallery I still do
get confused occasionally, but a gallery owner you trust and that
will work with you makes all the difference. The meat is, choose your
gallery carefully, ask others their experiences with said gallery,
and keep a close eye on them till you are sure how they do business
and last but not least get an agreement drawn up by your lawyer that
states the conditions of consignment and payment… ok my 2 cents.

Frank Goss


#18
I wish the artists who do consignment and are happy would chime in
once in a while.

As someone who is just a few years into jewelry making, I’m
extremely grateful to the two galleries currently consigning my
work. I have neither the temperament nor the desire to do the show
circuit (did that in my “previous life” as a potter!). I’m still
way too slow to make any money doing production lines for
wholesale. My style is continually evolving as I learn/refine
techniques. And I’m constantly overwhelmed by trying to figure out
the whole marketing thing! (thank goodness for the well-paying
part-time day job)

Metal Benders is one of my galleries, and Bill and Susan were
incredibly gracious and helpful when I first approached them. I
received lots of advice re pricing, ideas to make my work appeal to
a wider customer base, and even a free jar of killer salsa! They are
running a very successful business - so I listen to them and am
trying to absorb as much knowledge as possible.

My other gallery, Humidity, is here in Tallahassee. Sharri and Tana
are bravely trying to nurture a fine craft environment in a town
sorely lacking such. So I support their effort by being one of their
artists (after all, I live here too!). As long-time artists
themselves, they also have a wealth of to share and
encouragement to offer.

So, at this point in my chosen career, consignment is working quite
well for me. I intend to seek out more galleries throughout the
country as I try to find my niche in this world. The trick is to
find places/people that know what they’re doing, are ethical in
their practices, and support their artists in every way possible. I
know such places exist - I’m already showing in two of them!

zee
www.zeegalliano.com


#19

Here is another little trick I used, when i had a studio/ galllery
space in Houston. Twice a year I would pull all of my work from the
galleries for inventory and restocking. I would clean and polish it
call check the inventory to make sure the count was right and hold a
three day show along with 3 or 4 other artists. We would combine
mailing lists and send out a 800 to 1200 piece mailer to local
clients. These shows slowly built into very successful $5k to $10k
events. That of course is counting sales and commissions received
from the shows. Then 911 hit and it all fell apart. Lost galleries
and my studio phone didn’t ring for 2 months. Which is why I am now
on the west coast, but that is another story. If you don’t have
gallery/studio space you can always do the show in a willing clients
home or even rent a small venue. It worked for me, helped me keep
track of inventory, keep it clean, rotate inventory, make retail
sales and develop local clients for commission work. Usually a fall
and spring event, that clients started to look forward to. Of course
none of the galleries I showed at were local so there was no
competition or if they were local they had no problems with me doing
my own shows as long as the prices remained at a retail level… food
for thought or thought for food.

Frank Goss


#20

I’ve had jewelry and stained glass items on consignment in four
different shops for approx. 6 years. Two of the shops gave me a
contract, the other two did not. I’ve had no problems with any of
them. I just print out a list with each item I bring in to the shop
– each item has an item number. The shop owners give me a
check/cash and a list of item numbers that sold. Very simple. Perhaps
I’ve been lucky…

Trish, in hot, humid VA