Approaching stores for selling crafts on consignment is just the first step to getting your products into the hands of customers. The next step is looking over and finalizing the contracts with the store owner. Before you proceed, you must consider these things.
Tax ID
Stores will usually require you to have a tax ID number for their records and yours, when selling crafts on consignment. You can obtain one by going here. Some stores will be OK with just having your social security number since they will be reporting your earnings and theirs when it’s tax time. A tax ID, though, can give you the added benefit of getting supplies on wholesale, so you might consider getting one if only for that reason.
The Contract
First things first: read it and understand the store's consignment terms! You have to know what is being expected of you and what you can expect from the shop when selling crafts on consignment. In the contract, you will find everything you need to know about what consigning with that store means. There will be important information on the consignment split, payment agreements, and so on. Follow this link and click the download button for a sample consignment contract so you know what to expect. Don’t be afraid to ask the shop owner if you can take the contract home and read through the consignment terms first before you drop things off to sell with them. There is nothing wrong with being extra careful, and no shop owner should ever have a problem with it.
Inventory List
When selling crafts on consignment, some stores will ask that you also give them a detailed inventory and price list. Even if a store doesn’t, you should make and keep one for your records. Write down specifically what you’re bringing and how much you are bringing. Also, you need to write down the consignment price for each item. You should know how much they are selling your item for and how much you will receive from the sale of each item. This is also a good way to keep track of what is selling for them and if you should take goods that aren’t selling quite as well somewhere else.
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The Split
Selling crafts on consignment is different from selling online because the store gets a cut of your product. The store is providing a place and service for you to sell your goods. Most consignment splits are 60/40 (you get 60% and they get 40%). You need to realize this when pricing your products for consignment. The 60% that you get should be what you want to make on the product. This includes labor, materials, time, and packaging. It’s very easy to lose money consigning if you don’t price your items correctly. Make sure that you are getting the amount that you want to make the experience worth it.
Selling crafts on consignment is an exciting aspect of selling your products. It feels great to see your items on a store shelf and it signifies moving in a bigger and better direction with your business. But like any other business venture, you need to know exactly what you’re getting into and read all the consignment terms and contracts thoroughly. You will be more informed and ready to take your business to the next level.
