Consignment Fees

[wasabi]

I am branching off from "art" and trying to make a few bucks in the garden crafts arena. I have created a line of basic rebar trellises and plan to add some other rebar garden items like plant stands, etc. The trellises are my foot in the door so I can also place more artistic (and higher margin) sculpture pieces with the garden shop.

I currently have 60/40 for my art in a gallery. One up-scale garden shop wants a 75/25 consignment ratio (I get 75%) and this sounds quite generous. A new nursery (less garden crafts and more plants) wants my trellises but only at a 50/50 consignment fee (they can't buy them outright due to zoning issues). The 50/50 split raises the retail cost of the trellises beyond where I think they will sell although 60/40 hits the sweet spot. I can not lower my costs or I will lose money. I am trying to convince the owner to accept 60/40 but they seem offended. Any advice for helping them understand? I know some galleries charge 50/50 but it seems a bit high for this environment.

Here are the trellises if you want to take a look... trellises (http://www.earlysvilleironworks.com/trellises.html)

[JamesDFarrow]

Well I don't know much about this sort of thing but was just wondering. Is there any reason why you aren't going with the 75/25 split place?

James :)

[wasabi]

One word, James...volume!

I am going with the 75/25 split place too. I want to sell my items to as many places as possibly so it makes sense to have several garden shops hawking them. So far the 2 shops are easily 60 miles apart.

[JamesDFarrow]

O.K. Thanks!

So the way I understand it the 50/50 split (sold at a price you have in mind) doesn't make you, or may even lose you, money. And the same 50/50 split (at their price) does but that price may put them over the price you figure they would sell better at. Right?

If you sign with them how long is the contract for? Or does it specify a number of pieces?

What was running through my mind was that you could, if they definately won't budge from the 50/50 split, is have a "limited" deal with them. Only so many pieces. If they sell really well, then you would have ammunition to renegotiate to the 60/40 if they wanted you to supply more pieces. Just a thought.

Of course, they may turn around, even if they do sell well, and still not budge. To them, it could be they want to make a certain amount per piece or they are not interested. They may figure it as extraneous business that doesn't matter one way or the other.

James :)

[wasabi]

They buy jams/jellies/honey outright from local producers and sell them at 50% markup. This 50% markup seems quite common in the retail places I have spoken to for good purchased wholesale. But consignment is different (to me, and to a few places I have spoken to). I carry the risks associated with a piece not selling, I have the investment in the goods/materials/labor, etc. The nursery has no costs/risks associated with inventory. Space is not an issue in this case.

I could see them wanting to mark things up 50% if they bought them. It just seems like a high consignment fee for them to take 50%. I will still place them there at 50/50, just feel the market will be price sensitive for this commodity style product. Hopefully the handmade aspect and the designs I can offer will be enough to garner the premium over buying cheaper made-in-taiwan competing products.

[JamesDFarrow]

I guess the point I was trying to make was if you get them in the position of "them calling you" instead of you calling them, you will be in a better bargaining position.

Anyway, good luck in you endeavor, and maybe others here have some other suggestions to assist you as well.

James :)