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Wednesday, August 8, 2012

Wholesale & Consignment?

I have some items on consignment at a museum gift shop and I'm working on items that I'll be consigning at another museum shop in time for the holidays.  The buyer from another museum gift shop has said that they usually buy the products at wholesale with the right to exchange items that do not sell for other items from a collection.  My work is typically one of a kind or limited to a few pieces that are similar so, I don't really do "collections".  I thought that automatically excluded me but she wants to see my work in early October.  ~Fingers are crossed!~

I would like some advice and anecdotes about your experiences selling wholesale or consigning items--especially to museum gift shops, etc.  This is very new to me and I think it helps to know how the process has worked for others.

A question for those who sell on Etsy:  Have you had a problem with wholesale buyers expecting a full 50% off your Etsy prices?  Etsy prices are so depressed that a 50% price cut would actually take away all profit and fail to even cover supplies on many of my silver items--especially those items that are more labor intensive.  I know that the solution is to raise prices but I have my items competitively priced.  Those of us who sell on Etsy know the point at which upping the prices will elicit laughter rather than buyers making purchases.

I'm especially interested in hearing about local pricing across the country.  I have a very good friend in Indiana who always tells me that my prices are too low and her friend in California has said the same.  From what I can tell, jewelry designers & metalsmiths can set much higher prices in those two areas than we can along the upper Gulf coast.

What are your best venues for sales?  Do you prefer gift shops, museum shops, farmers' markets, art markets, trunk shows, displays in hair salons, online only?  It's clear that I need to further diversify and I think that collecting everyone's experiences here could help those of us who are in need of more info and that extra little push.

I look forward to reading your comments!

7 comments:

  1. I wish I had some good solid advice for you but I haven't wholesaled yet in the jewelry world. I can tell you that most retailers want to know that any public forum you are selling in that your retail will be the same as theirs so you are not "in competition" with each other. A company I used to work for in sales had many upset retailers after they sold to a big box retailer. The big box retailer got a huge discount and ended up selling the product at a price the other retailers were buying it for. That being said retailers do not always expect a 50% margin, especially in handmade, one of a kind art pieces.

    I did see a brief discussion on Etsy Labs by Megan Auman regarding wholesale, she may have more info about it on her website too.

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    1. Oh, and CONGRATS on getting some wholesale accounts!

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    2. Thank you, Ali!

      The good thing is that because most of my work is OOAK, that nothing could be in competition with a lower priced version on Etsy but even so, it really isn't fair that 50% off is expected. The buyer didn't even check out my prices before requesting it! I'm hopeful that the in person meeting when she can see/touch items will result in me getting to do consignment, after all.

      I'm just grateful that the other museum shops want me to consign items which I think is a better deal for me and them. They can't end up stuck with an item that doesn't sell.

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  2. When I was first looking into Etsy as a venue, I read up on the sellers stats, and I recall that the percentage of sellers who also did wholesale was very low--and no wonder, from what you've pointed out. Personally, I just don't think handmade and wholesale can work unless you get a very big name--and then I can't afford to buy from those folks anymore! I hope you'll figure out a compromise....

    I'm getting ready to head to the Philly Bead Fest, and I have one anecdote from last year's experience. I headed straight to the main silversmith there, but there were NO others at his booth the whole time I stood talking with him. I asked how the price of silver was affecting his business, and he told me he'd have to quit using silver altogether if he didn't make the cost of that show. Don't know how that panned out for him, but I did check his wholesale prices online, and they were so much lower that I was sure sorry I didn't have a business account! But I don't know how he was staying in business.

    Sorry--I think I should have been more upbeat!!! As far as I'm concerned, you can never have enough silver, so maybe you can work out something with the museums that is more satisfactory. I'm pretty sure folks will plunk down more money for an item when they can see and touch it (even if the same item might be somewhat less expensive online), while online I think a lot of buyers are surfing for a bargain. I've pretty much decided, for example, that I'm not bothering with sales on Etsy because then buyers expect and wait for them (as I do). Maybe you should raise your prices at least until you see how you do with the wholesale venues and then adjust your goals from there....Or keep the prices low and take a loss at the museums until you see if your work takes off in those venues. Good luck with your strategy!

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    1. Hi Gail!

      Etsy and wholesale are a strange combination. I think it really only works for those who make simple, uncomplicated items that can be easily replicated. That doesn't apply to us. I've read about sellers (especially those who make wedding jewelry) who remake the exact same 10-20 designs over and over and have for years! I couldn't do that because I'd die of boredom. But, they say it's worth it because of the high volume of sales and not having to photograph items or write descriptions for listings. Simply renewing sold listings does have its appeal!

      I really feel for the silversmith you talked with last year. I'm (yet again) feeling the crunch because PMC just went up. The cost of silver went down but the PMC manufacturing costs rose so, up went the price. I'm out of the clay right now but I'll be using up my syringe and sheet before I think about ordering any. I've got to sell more silver items before I'm going to invest more money.

      I've got my fingers crossed regarding that one shop. I'm lucky that the other prefer consignment which is so much better! I've decided to divide my work into categories. One category will include only high margin, low labor items that I can afford to sell at wholesale while the other category will be consignment only. I'm going to make money one way or another. I didn't get into this business to lose money--no one would expect a shop in the mall to lose money!

      Something you might find interesting: The Woman's Exchange Shop chose 8 items and 6 of those were *copper*. Kind of validating, yes?

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  3. If you want to go through with the wholesale account, let the buyer know there is a minimum quanitity of pieces she must buy from you. This way you can be sure this is a profitbable venture for you as well.

    I've done consignment in an upscale gallery that charged 50 percent. My prices had to go up so much just to make a profit, and while I made a few sales, I eneded up loosing money on the deal, and never made any new customers from it.

    If you are considering consignment make sure you sign a contract to protect yourself. The contract should show the percentage they take, how long the items stay on display, who covers the loss, damage, or theft of your jewelry, terms on returns such as length of time and if the piece was not damaged after purchased. Make a list of each piece and email that list with photos of each piece. Check to see if you need to bring your own display or if they provide this service. Also ask what promotions they do in terms of kick-off parties or other events. Ask if you can attend these in order to help sell your jewelry. Ask them to insert your business card with every purchase. I'm sure there's lots more in regards to consignment. You can probably find more just by searching.

    Congratulations on this new venture!

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    1. Thanks, Alice. Those are some great points and I'm glad you listed them! They'll be especially helpful for anyone who hasn't had a consignment relationship with a shop or gallery and is looking for a checklist of what to watch for in a contract.

      So far, I'm only dealing with museum shops. In my experience, they have always had really straightforward, fair contracts that detailed all the points that you listed. But, I'm not so sure about individually owned gift shops. I've heard of some awful cases where shops suddenly closed and the owners walked with consigned items. I'm avoiding individual shops for just that reason.

      I'm sure that over time, I'll meet legitimate shop owners who will be amenable to a fair contract. I'm not totally excluding the possibility of dealing with them but I think it's important that I proceed with caution.

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