Our first major consignment sale was a 19th century empire sofa, very similar to the one pictured above. This was back in late 2006, when we still had our store on Main Street in Valdese. A woman walked into the store and asked if we'd be interested in purchasing an empire sofa. She wanted $300 for it. Now, I had never heard of an empire sofa at the time, tho I think Patti Anne had (being a girl and all), and $300 was a lot of money for us to spend on a single item of inventory. So we offered to try to sell it for her on consignment, gave her our rates & terms & she agreed. A couple of days later we went out to her house, took a bunch of pictures of it, then very shortly had it written up and posted as a 7 day auction, buyer pick-up, 'cause we knew nothing about shipping things freight. She kept it at the house, and we assured her we would not give out her contact info until we had the money. It worked like a charm. The sofa sold for $600 I think, the buyer paid immediately and we took $120 + expenses (listing fees, final value fees & paypal fees). Everybody was happy - the buyer got a very nice piece of antique furniture at an unbelievably excellent price, the customer got more than $400, over $100 more than she wanted, and we got $120 for selling a piece of inventory we didn't have to buy, transport and keep in a mildewy, moldy little hovel of a store.
That was pretty good.
Most consignments don't work like that, and I have since developed a love/hate attitude toward them. At one point, we probably had close to 100 items (maybe more) on consignment with various customers, now a bit less. We have to track every expense associated with a consignment item - listing fees, final value fees, PayPal fees & our commission . We don't have any special software to do this, just have a simple excel spreadsheet that I created and developed myself. I created formulas to do the math, but I have to do a fair amount of input, record the listing fee when I list an item, search sites to figure out the final value fee, and logon to PayPal and search it to find their fee. The spreadsheets (one for each customer) have a line for each item. Consignments create double or triple the work per item, at least.
I doubt any customers understand the amount of extra work consignments create - and really, why should they care? It's just part of what we take on when we agree to sell an item for them.
Customers understand and accept our commission rates with no problem. But very few are prepared for the amount eBay charges, no matter how much we tell them. Us telling them is one thing, them seeing it on the statement I provide with their check is quite another. I look at it and shake my head, so I can just image what they are thinking - those charges are profit they don't get.
We have formal contracts, but we haven't used them in awhile. If we enter into an arrangement with someone we don't know, we'd print off the contract, go over the charges, our responsibilities, answer all their questions, and they'd sign two copies, one for them and one for us, or we would go no further. However, we have consignors we know quite well, and with them, it's just a verbal agreement. Our commission plus expenses involved in listing and selling.
Some customers are very particular about what things sell for, which can put us as sellers at a disadvantage. Other customers just give us a general "whatever you can get for it" type instructions.
Consignments put you in contact with people - the consignors are your customer, you are working to sell their item & get them the best price you can. I find that you also end up negotiating with them sometimes, managing their expectations, especially about starting price and the types of things they want you to sell. We've returned more than one item without even listing it because we felt the odds of it selling were very poor. There are times when we've not accepted an item to list. If you are a people person, then this is no problem. If you're like me, and aren't really a people person, and just want everybody to get along and be happy and be at peace with the world, well, you let Patti Anne do this part.
I've just scratched the surface here. If you delve into selling on consignment, just accept that you've taken on extra responsibilities. Not only must you satisfy your customer (the buyer), but to also must satisfy your customer (the consignor). Although it is your business, it's sort of like you're working for someone else, who may or may not take a very active interest in how you market their items. You've given up just the tiniest bit of control over your life.
Thanks again for reading. I know I ramble, but tough.
I think my next post will be about postcards, since that is what we sell most. That may turn into several posts, I'll have to see. I love postcards.