Art Consignment is Unhealthy for Your Business

You wouldn’t give your wallet to a new friend or stranger . . . would you?

Think about that scenario the next time a retailer asks you to consign your work in their store or gallery. They are asking you to take a huge risk on an arrangement that leaves you out of control, while they take no risk and are in control – plus they have possession of your merchandise.

Consider the risks:

1. Consigned items require no “skin in the game” from the retailer, thereby making them low priority. They often end up in poorly lit, less visible retail space, or worse – in a box in the back room. The products being displayed front and center are the ones that the retailer bought outright from an artist. That artist should be you.

2. You have reduced your inventory by shipping product which you have made nothing on. Meanwhile, you could have sold the items at retail yourself, or shipped to another customer who bought from you wholesale, thus creating a receivable.

3. What if your product is missing, stolen or damaged? Sorry – you lose. Insurance covers the business personal property of the store owner only. That does not include consigned items, which belong to you.

4. Store buyers  seeking  consignment should be looked at as a red flag. Many have cash flow problems, and you don’t want that to become your problem, too.  When they go out of business, the chances you will get paid or receive your items back in perfect condition are slim.

Turn the tables:

The next time you are at a wholesale trade show and a dealer asks you right off the cuff to consign your art or craft work with them, take a step back and AVOID answering them. Instead, engage in conversation to get more information first. This is a negotiating process, and you have the upper hand because they have established that they are interested in your line.

Ask them:

  • Tell me about your store/gallery . . . .   (Stores operating on a 100% consignment basis are rarely successful.)
  • What other artists in this aisle do you carry? (This tells you if they are established, and the names of other artists you will use as a reference before you ship. Also realize that if they have well-known vendors supplying them, chances are high that they are buying wholesale from them, not consigning.)
  • Do you have photos of your store/gallery with you? What is your website address? (If these don’t exist, be very suspicious of this customer.)
  • What items are you interested in? (Are they looking to carry a broad selection or just unique, high-end pieces?)

If you determine that you want to work with the buyer, write up an order, but then present some strategies that will put them in the position of being an “investor” in your success. Here are some possibilities you might suggest:

1. If you purchase _________, I will consign ____________.

2. If you purchase _________, I will split the order and ship half in 30 days and half in 60 days.

3. If you purchase _________, I will split the bill, half net 30 and half net 60.

4. If you purchase _________, I will come to your store for an artist appearance or trunk show.

5. If you purchase _________, I will include the name of your store in my advertising.

Be prepared before attending the trade show by knowing which offers you are comfortable with and can afford to make. Stay in a position of control during the sales process by offering your chosen arrangements, which do not include straight consignment.

After the show, remember to check out each and every new customer who ordered from you. Extend only the amount of credit that you can afford to lose, and don’t be afraid to walk away from an order that doesn’t meet your terms. Understanding the risks, and making smart choices will keep your business sound and growing.

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  1. […] Even though consignment can be difficult for a lot of people, the area I live in has some wonderful regional galleries that I consign a lot […]