# Consignment fee seems really nuts.. or is it me?



## cmonSTART

So long story short I have a chance to sell some things in a consignment shop a friend and her business partner have opened (just opened yesterday). Her partner who I get the feeling is in charge of the fees and such said they sell on consignment with 50/50 terms (50% to me, 50% to the shop). I have no experience with selling on consignment but this just seems nuts to me. Really nuts. The woodworker will always come out on the losing end with this.. big time.

So, typically what are consignment terms for you folks? Does this seem nuts to anyone else or is it me? It's a new business so I don't know if this is how it is or ignorance on their part with their fees.

They have no other craftsman selling there right now. I would be the first. It's mostly goods the business owns.


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## khop

cmon, I think they are trying to run you off. The max I have heard for fees is around 25% If they insist on selling your stuff, bump up your initial cost to cover the difference. I don't know what projects you want to sell, but DON"T cheat yourself. Hang in there.
KHOP


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## Dragonsrite

The rate I've always heard here in Minnesota is 20%


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## Dez

I feel that their prices are way high also. A coop here in WA has lower fees than that and they are very high end, with approval from the members before they will even consider your stuff! If I remember correctly the fees are in the 30% to 38% range. I agree that you shouldn't sell yourself short. Let them deal in 2nd hand junk, er I mean stuff.


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## a1Jim

Depending on your area studios that sell furniture and art usually get 40-60%


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## Timberwerks

The galleries I sell through get 40% for pieces over $500.00 & 50% for items under $500.00.


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## papadan

Around here the fees run about 20% for crafts or new items and 40% for used items like furniture and clothing. But Antiques go with the crafts at 20%


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## cabinetmaster

Wow. And I have never paid over a 10 to 20% fee.


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## okwoodshop

I thought about trying to sell through some of these but the rates always ercked me. I understand that they have overhead and there time is worth something but come on. the wood worker foots the bill for materials,design,construction,etc. they transport to the store. the store sets them up and if they dont sell you have to go pick it back up. they want as much to set in the store as we are supposed to get for all the work and risk??? I'm sorry, that just don't sound right to me. luckily I have a large family who are more than happy to take what I make for free LOL. I was approached by a friend of the family who was starting a consignment shop and asked if I wanted to put some things in it at 50%. I politly told her I would consider it at 25%. She refused and said I could just raise my price to make up the difference. I didn't want the reputation of being overpriced so we couldn't make a deal. I did visit her shop once (before it closed) and couldn't believe the prices she had on her items. sorry to ramble on but this really sticks in my craw. P.S. we have a local sales place on the net. that lets you advertise for free, kind of like craigs list but more local. It's great for occasional selling of low end items.


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## cmonSTART

See, I was thinking around 25% would be about normal.

Say I get paid 50% of the sale price which we'll call $200. That means I get paid $100. If I paid $50 for materials I'm making $50 from the sale and the shop is making $100. No way.

The way my pricing usually works is Materials x 2. So, I would make $0 and the shop would make $100. Even more no friggin way.

I could bump the price up but that reduces the chances of a sale.


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## okwoodshop

cmon, keep an eye on this place and see what kind of business they do, I'm betting it won't last long without some changes.


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## Porosky

I was doing 70/30 I thought it was a little steep but…. I told them what I wanted and then they put their 30 on top of that so in the end I got my bottom line. Somethings sold and some things were to expensive to sell. That about sums up consignment shops. If they don't like YOUR terms to bad. They could be seeing how desperate you are, trying to make extra from you being desperate to sell something.


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## closetguy

I would never consider consignment unless it was a very high dollar piece in a gallery. This subject was heavily discussed in this thread a while back http://lumberjocks.com/topics/6236.


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## North40

The shops around here charge a monthly fee for displaying items (usually about $50/month for 10' of wall space), plus 30-40% of sales. I get frequent calls asking me to consign items, but I've never done it.


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## SteveMI

I had a booth in a split antique and crafts place, pretty good size at 24,000 sq ft. It was 3' by 5' for $90 a month with six month lease. Then the store took 10% of sales. Antique side was well monitored, but the craft side was at least half China buy-sell stuff. One of the managers gave me the talk about how they had to keep the floor space filled or customers wouldn't come. I couldn't compete with the China prices and left after 6 months.

Actually some of the more quality China stickered stuff faccinated me in how they could have a final retail price so low when even at my best could not buy the materials for that. And they had shipping!

One of the owners saw that I did woodworking and asked me if I could make tables as they were a fast moving item that they wanted more variety in. At first I wasn't interested and then decided to take a stab at it. Made a very basic hall table without a drawer and took it for review. Owner said they could sell it at $29 and they would take 40% as consignment fee. So, $17 dollars for labor, materials and profit? Would need to find a bunch of free pallets just to break even.

They did have bigger tables with drawers that were obviously local made for $99 a little bigger. I say obviously due to the router marks and pine construction. Buy they had multiple drawers and larger tops, which would drive the labor and materials up. I didn't want to make anything at that grade or craftsmanship and didn't know if the market would bear an increased price.

Steve.


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## bornagainresale

I own a resale & consignment store. It sounds like these new biz owners are unfamiliar with how consignment should work for what we call an "Artist Consignor." Regular consignment rates are usually in the range of 40/60 to 50/50 for gently used items. But for someone who is producing/crafting/constructing pieces themselves the rates need to be different. I did a LOT of research before I picked up any Artist Consignors. I found the range of normal rates to be 25-45% for the store to keep. We set our rate at 30%. Obviously, the Artist needs to be able to recoup their investment and make a bit as well.

Keep in mind what the store is providing to you. It is larger than just the sale of pieces. Yes, you could probably make more per piece selling on your own at craft shows or through word of mouth. However you will also benefit from the exposure. When the store pays for their advertising, whether they specifically mention your pieces or not, you will benefit from that at no additional expense to you; it draws people into the store which means more eyeballs seeing YOUR product.

There is the matter of sales space, as well. I know exactly how much money each square foot of selling space makes for my store each month and every inch is precious. Space is always a challenge and I will not waste it on unproductive or unprofitable product. If I cannot make enough on something to justify taking up space the product is discontinued in short order.

In addition, you have a skilled sales force working for YOU on commission…if you don't make money, they don't make money. I'm a good salesperson (it's what I love) and I train my people well. While my Artists are busy with their families or making other pieces we are busy selling their pieces! They get to focus on what they do well and we focus on what we do well, and that benefits both parties.

I've worked hard for the past five years to establish a stable, large clientele that have come to know my store as a unique place carrying local product at reasonable prices. If your product is added to my store's product mix you are guaranteed exposure to clientele you probably would not have access to otherwise…that's thousands of "hits" per month, to put it in eBay store terms. You benefit from my advertising (radio, print, tv, email), expertise (display, salesmanship), location & clientele (no overhead for you, established client base), and equipment (signage, displaying fixtures, credit card machine/Telecheck, invoicing, collection of funds at no charge to you), all for that 30% fee.

All that to say, maybe do some research on your own and print some sample Artist Agreements out to show to this consignment store. Or maybe this particular consignment store is not the right fit for your product and you need to shop around.

Best of luck in whatever you decide!


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## dennis

Those fees are what the galleries and stores have always charged me. They have to pay the rent, provide the sales force, advertising, ect. In my book if they can actually sell the items you have a winning combination. Go for it.


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## SteveMI

bornagainresale - You make points that I fully agree with. The value of me being in my shop (or day job) undisturbed by a retail customer is priceless. Only needing to travel to the facility when something has sold to replace the space is good use of time also.

My angst is in my local area they fill with people renting a booth and filling them with wholesale China, Vietnam and India goods under the roof of "crafts."

I have thought of looking into some retail space (plenty empty around me) and put up the sign "Locally Made." I would jury everything and ask for the proof that it was actually made by the individual. I'd probably need to apprentice for bornagainresale for a year first though.

Steve.


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## MrHudon

A new consignment shop will be opening in my town in the next week or so.
I'll be putting a couple of hutches in the shop that will also be used to display other items. Because of this arrangement I don't have to pay the monthly fee and the shop gets 20% instead of the 30% being charged to other crafts people. I think it's a great deal for both of us. I like the idea of building what I like and letting someone else worry about selling it. Hopefully it works out, but if not the first couple of pieces are items my wife likes that will look good in our home ; )


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## MsDebbieP

lots of good information here. I have my cards for sale in a yoga studio and they get 30%. At first, when I calculated their profit vs mine I was really getting the short end of the stick and then I realized that I was comparing my PROFIT to their income… they, too, had expenses to cover … AND a lot of good my cards do sitting in my home where nobody can see them. The 30% now makes sense to me. Of course, I would like it if it was lower lol


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## yarydoc

When you sell something on consignment do you mark your price up or do they set the price. How do you figure your time? Who pays for damaged or stolen items? It doesn't seem right the store should make more than you with no risk. For me woodworking is pure enjoyment and I think this would kill that. Items that I make are mostly priced out before they are built unless they are for family (GRAND KIDS) and the payment is hugs. But if consignment works for you I say great.


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## BeachedBones

Consignment deals are tricky, sometimes the shop is just interested in getting money for nothing. A shop like that maybe isn't worth dealing with unless their cut is really low. Some shops have the customer base, reputation and display facilities that can really boost the sales value. If a consignment shop can get 100% more for an item that you can, in a reasonable turn over time, then yes they are worth a 50% share. Their market savey will also boost the perceived value of your work, which will only give you more options in the future.

Always ensure you get a fair price for time and materials, but don't underestimate the ability to get things sold at higher prices either.

I once knew a guy who did fantastic stonework, both artistic kinds and functional forms. Unfortunately he was off-putting and looked shady, and couldn't sell a life jacket to a drowning man. On his own his work would pile up unused, unappreciated and get sold or given away for a fraction of it's worth. When his work was sold or represented by others, it could get a premium price.


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## WhittleMeThis

I would give it to them at a 10 -20% discount to what I would sell it to a customer I found, if they can sell it for 2x my price great, I now know I am under pricing my items to my direct customers.


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## huff

Depending on what you are selling and what type consignment shop/gallery you are interested in having your stuff displayed. I had a few of my pieces in a gallery and their terms where 40%. This was not arts an craft, but different artist. This seemed a little high for me, but then again they were drawing the type clientle that would be interested in my work. Here's where I always had a little problem with consignment shops…...ask your retail gift store what their average % mark-up is. You will probably find that most can't get a 100% mark up on everything in their store ( that's paying 50% of what they are selling it for).......and they have to pay for their inventory. Look at a gallery or consignment shop and figure what their inventory is worth that is in their store and they don't have a penny invested in the inventory! Maybe selling wholesale is another avenue to look at…...........Just food for thought. Me personally, I love selling what I make. There isn't a salesperson out there that knows my work better or half as excited to sell my work them myself. Just part of my passion.


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## bill1352

i'm doing a Holiday Shop at a high end art gallery and they get 35%. My work isn't high end art gallery quality but they didn't have a woodworker so… I'm raising my prices a bit to cover it.


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## roman

50/50 is fine by me.

I put 2 carved loons in a gift shop, charging 75 bucks so they retail at 150 bucks.

2 months later, there they sat getting dusty so I pulled them out and put them in the store right next door, asked for 350 each so they retailed at 700 bucks.

Both sold the next day


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## SteveMI

After rereading this set of posts, I am changing my view. In the beginning of the post I was in line with a lot of people that were stuck on the consignment shop making such a high percentage with only providing a bit of floor or shelf space. I'm now of the opinion that you price it so your percentage/return is adequate for you, take a deep breath and let the merchant go. Roman made a very good point in that the merchant with the right shop is invaluable to the LJ by creating the environment that it can sell for the higher/proper price. Obviously you need to seperate the flea market mentality shops that want the same high percentages from the actual craftmanship ones that will be good for you.

Steve.


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## SnowyRiver

I know a consignment shop owner here…mostly antiques, and they get 40%. They are always willing to take my stuff, but I cant justify building it for that. I would accept 20% fee, but not much more.


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## OhValleyWoodandWool

If the shop is well managed with good displays in a high traffic area and a loyal client base they are worth a 50% mark up, especially if they buy the piece outright. If it on consignment 50% might be a little high bu not always, it just depends on the other factors.


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## doyoulikegumwood

i don't know what kind of relationship you have with these folks but first off it neer hurts to try and get a better percentage with them.

2end i have sold a few pieces with a lady i know and we have a deal i tell here the price tag price and the bottom line price cuz we all know folks like to haggle.

and pricing is very difficult but materials times 2 i don't know if your giving your self the right end of the deal on that one


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## reggiek

The consignment fee is supposed to cover their overhead and make a reasonable profit….depending on the customary markup of items that could be way high…or way low….take groceries for example…the markup on them is pennies…as the costs are quite high….so asking a 50% fee would be rediculous….now take an item like a plastic flower…the markup on them is typically 140% or higher…so asking a 50% fee might not be too unrealistic….to understand the logistics of what they are doing…you would have to know the cost of their overhead - i.e. do they advertise? whats the rental per sq ft where they are at? etc…etc….They may need to make a high percentage to cover that….and the profit could be pennies….so in other words there is no flat answer here….if you are not sure…do some research…call other consignment stores in the area…or check online. You also should insure that the store sells items close to what you want to sell…i.e. a clothing consignment store would not be a good place to sell woodworking items….


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## skidiot

I have some items in a shop in a well traveled tourist area. I get 60%. But I know what I want to get out of my items and she marks them up to get her cut. Im not doing this to make any real money. Just kind of an experiment. I have sold a few items over the last year. I use use all free materials so I only have my labor in it, and I dont figure that being worth anything.


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## OhValleyWoodandWool

I've never calculated prices on a multiple of materials basis. I calculate material + supplies + waste + labor then divide the sum by the gross profit I need to determine the wholesale price and double this for the retail price. I try to keep the best records I can so I can make adjustments to my formula as needed. I don't make my living at this just try to pay for tools, supplies for personal projects and some travel now and again. It also means that I don't have to be quite so anal about record keeping which keeps thing more enjoyable.


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## dragginbutt

I recently attended a show in my area, and most were selling what I'd consider to be tramp ware. There were a couple guys that did really quality work too, but they had zero customers. The people selling junk beads, and knitted doilies were selling tons of stuff, but the wuality work was just dead. And they paid $250 for a 3 day show. 
I doubt I would be into wood working if I wanted to make a profit. I have enough projects in my head that I think I can keep busy till i am pushing up daisies. so it really isn't important to me …


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## roman

to be blunt

it doesnt matter what "mark up" they demand, ask for…..............what matters is your own "profit margin" and if your happy with your own own "profit margin" who really cares what they make…...........all the more power to them.

the projects that are as of yet, those that float around in my head, have little consequence when it comes to feeding my family.

There is one rule in business. ............make more money then you spend.

It isnt rocket science.


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## OhValleyWoodandWool

Well said roman


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## chriswright

I've never really liked the idea of selling on consignment. If you can do it, see if they'd be willing to buy the products from you to sell at what ever price they want.


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## mynoblebear

As long as I get what I need to produce the piece that the gallery is selling The gallery can have whatever the gallery needs to continue to produce sales. Sales are what keeps my phone bill payed.


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## bruc101

I've had dealers for a lot of years and I've had all kinds of experiences with them. Over the years I developed a system to protect myself and to make my dealers feel like I appreciate the business they do with me.
I have a database for my sites that have secured logins to it for my dealers, builders. vendors, etc. The furniture dealers can log in to their private section and see all of their history with me. They can then go to a secured gallery for dealers only and see new pieces, regular pieces etc. They can pick and choose how they want each piece built for their stores. They then send this information to me via a secured email form so I can contact them with the pricing and or to discuss the product with them or if it's a standard in their shop then they can do the buy me button with their wholesale price. They can also ask me to contact them to build a special piece on commission to one of their customers.I also have a message board in the database so I can leave messages to them. When they send me an order they can login to their account with me and see where I am in the process of their build and when I expect the completion and ship date. 
If a shop wants to be a dealer for me then I have a dealer application form on one of my sites for them to complete and send to me that is also secured. After I check out their store then I'll contact them with a phone call. 
I don't do consignments anymore unless it's a store or dealer near me and i know them well and then the consignment doesn't last forever with them. 
This is a lot of work on my part but it has everything organized so everyone knows what's going on with less frustrations and confusion between myself and the dealers. This is something that took several years of work to achieve but it's paid off for me and my dealers. 
I never let a dealer or shop tell me how much they'll pay me for a product, I tell them how much their wholesale cost is and then they can take it from there and make their own personal commission above the wholesale price.


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