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Consignment standards

#1

Hello orchidians,

I am a jewellery maker based in Istanbul and recenly I’ve been giving
some of my work to be sold on consignment here in the local stores.
The problem is, there are no clear rules about how the profit should
be shared between the maker and the shop (or gallery) some of them
ask for %30 of the total price some of them want to take the %50!
Could you people with experience on the topic tell how the things
work in the US or UK?

What happens when the production cost of the piece is already high,
we share %50-50 but I already have spent %25 of the total price for
materials, so the seller takes %50 and the maker only %25 of the
profit?

All the best,
Senay Akin

#2

Senay - begin by pricing your work so that your retail cost is at
least double your wholesale cost; and your wholesale cost gives you
back your investment, pays your time and overhead, and a bit of
profit. How much at wholesale is up to you. Then when you sell
retail, you do very well from a profit standpoint! It is actually up
to the gallery to set the retail; you just give them a suggested
retail. They can increase it and make more for themselves, or cut it
and make less for themselves. Your percentage is based on the retail
you named, not on the actual sale price, unless you set your contract
up otherwise.

As far as consignment, if the gallery does a good job promoting
themselves and the work of their artists; carries insurance on the
work; and pays in a timely pre-arranged manner, then 50% is normal
in my part of the US. They are taking the risk of advertising and
insuring and displaying the work, and they must take those costs out
of their 50% plus get their profit. The less the gallery does, the
lower the percentage of retail they should get. I’ve never had one
take less than 20%, and as overhead has gone up that has become
increasingly low and uncommon. A consignment of 30-40% is more
common, but the better galleries do get - and deserve - 50%.

Do be sure you have a written contract that specifies the
percentage; what it is based on; insurance; and when you can expect
payment. A few pay on sale, but most pay monthly. Just make sure it
is all clearly stated. Also be clear on how to get work back if you
want it back.

I have had both excellent and horrible consignment experiences.

Good luck!
Beth in SC

#3

Hi Senay, I deal a lot on consignment, and it seems to depend on
where the gallery is located as to what percentage of the sale price
is charged, e.g. in cities galleries here take 50% ( or sometimes
more), and if they are in the country or outer suburbs the amount can
vary from around 30 to 40%.

This makes a lot of sense when you think about the galleries’
overheads. When your production cost is high, your final amount
should reflect this.

Also remember that the galleries’ percentage is not all profit, they
have their costs just as we have ours. I always think of this as a
partnership between the gallery and me, which should be profitable
for us both,

cheers, and good luck with the sales,
Christine in South Australia

#4

Thank you for the answer Beth, I guess it’s the same all over the
world. My personal opinion on this topic is that up to %40 for the
gallery is fair, %50 for a very high standard one would be OK too, in
my case I have a very professional one that works with lower
percentage (%30) than another two that are asking for the half of
the price but don’t give anuthyng in exhange, (I mean bad decoration,
over-loaded displays, inconvinient payment terms ect) this is the
absurd part of the story and anyway, more options you have more the
choises you make are correct, right?

All the best,
Senay Akin

#5

Dear Senay,

I am partners in a gallery and we ask for a 50/50 split with our
consigners. Don’t forget that the store has overhead, they are not
walking away with 50%, they are paying for rent, insurance,
utilities, salaries, merchandising equipment, I could go on and on
and on…bricks and mortar cost! But do enter into an agreement
with your store owner and get rid of the shades of grey you are
dealing with, know where you stand and what you stand to profit. If
the store bargains, who picks up the 10, 20 whatever percent, you?
the store? are you willing to negotiate 10 or 20%? We actually have a
"cheat sheet" under our counter of our consigning artists and whether
they are willing to discount their work or not.

Our store is in the US, specifically, in The Conch Republic.

Lainie

#6

I work in a very upscale art gallery (our jewelers are Rosen show
participants, at JCK shows, etc.) and all of our jewelry that is
consignment is on a 50/50 split or even marked up 2x than the
jewelers asking price. Different artists/jewelers set up different
perameters. For example, one of our jewelers whose work goes for over
10k a piece, we do a 50/50 split. Another artist selling jewelry
under 500$ a piece just wants X amount of $$, so we mark it up 2X,
basically what we think the market will bare. Hope this helps!

Nicole

#7 
Another artist selling jewelry under 500$ a piece just wants X
amount of $$, so we mark it up 2X, basically what we think the
market will bare.

Wow! That’s OK if you buy the work outright, but I hope the artist
knows what you think the market will bear, otherwise this is way
unethical! I cannot imagine a consignment artist finding it OK to get
a third of the selling price instead of the half that others in the
same gallery are getting. Sounds underhanded-- though perhaps I have
misunderstood.

Noel

#8

50% is the going rate in my experience. You should be cautious about
putting your work up for consignment. I have had a few unpleasant
experiences. From the artist’s perspective you are actually lending
the gallery capital and receive no interest on the loan. The gallery
in turn takes no risk if the pieces do not sell but the space that
they take up in the showcase. They will have the same overhead if
they outright purchase your work (assuming they do not have to
borrow money to buy it) at wholesale or have you “lend” it to them.

Be sure you have a meeting of the minds as to when you are to be paid
if your work sells. Some galleries want to hold on to your money for
as long as 30 days. Now not only are you lending them capital with no
interest they have your payment that they earn interest on. Then
there is the concern about how your work will be cared for and if
they are insured in case of theft. I recently got some work back from
a gallery that was tarnished and covered with fingerprints. Not how I
want my work represented.

On the upside if a gallery has a good reputation and will promote
your work and have events featuring your work and give the customers
and prices your work where you both are making money then
consignment can be a good thing.

Rick Copeland
Silversmith and Lapidary Artisan
Rocky Mountain Wonders
Colorado Springs, Colorado
rockymountainwonders.com