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Should You Sell Your Handmade Products on Consignment?

Consignment involves placing items for sale with the agreement to get paid only when the products are bought by customers. Personally, I love selling my jewelry on a consignment basis. It’s allowed me to have my work in many stores, it’s a great boost to my profits, and the store owners I work with are amazing. If you’re new to consignment it can be a little overwhelming at first. Here are a few things to consider when deciding to sell your handmade produces on consignment….

The Positive Aspects:

1. It’s a great way to start selling in boutiques and shops.

When you’re just starting a handmade business, consignment is perfect for getting your foot in the door at stores. There’s not too much risk involved and you don’t have to have a huge product line to begin. Shop owners are also more likely to take a chance on new artists and makers if they don’t have to purchase a big wholesale order (where they pay for the goods upfront). Consignment allows them to see if a line will do well in their store without a huge initial commitment.

2. You can bring new merchandise regularly.

Restocking your work consistently is important for success when selling on consignment. It’s also a fantastic way to try out new styles, colors, and product types. Always ask the store owner first if it’s okay to bring in different pieces or if they’d prefer just the same kind you’ve been stocking. I’ll periodically check in with the shops that carry my work to see if they want a cool new product I’ve been developing.

3. You’ll get paid throughout the year.

When you sell on consignment you’ll get paid after your products are purchased by customers. Some shop owners “pay out” every month (when you have sold items), some every other month. Checks, PayPal, or direct deposit are the typical ways you’ll get the money owed for the goods sold. It amazing to get paid throughout the year! Those consignment funds can really help your overall sales numbers.

Extra tip: With consignment you also usually get to set your own retail prices, unlike wholesale where you give the shop owner what’s known as an MSRP (Manufacturer’s Suggested Retail Price).

4. It provides an increase in custom orders.

A lot of the boutiques that I consign with also take custom orders for my jewelry, which is a fun change of pace! They typically take notes down about what the customer wants and then email or call me with the request. Sometimes it’s not possible for me to make an item that is wanted, but if it is I then create the product and have the store take the payment as usual. Then I’ll drop off the custom order to the shop and they can contact the buyer.

The Negative Aspects:

1. It can be more difficult if the shop is far away.

Restocking and picking up checks (if they don’t get mailed to you) can be harder if the store isn’t local to your handmade business. Also, if anything goes awry it’s more difficult to stop in. For these reasons I tend to stick to nearby shops for consignment selling. This doesn’t mean you can’t have a good experience selling in another state or city. I’ve made it work successfully- but I wouldn’t necessarily do it when just starting out.

Extra tip: If possible, make a pre-arranged visit to the store at least one time when you start consigning. This way you can get a visual of the displays and also introduce yourself to the owners in person.

2. You won’t get paid all at one time.

Unlike wholesale, consignment arrangements mean you’ll get your money only when your items sell. If you don’t keep a big inventory level due to high material costs or a lack of fluid funds, this can be frustrating. The amount that you’ll sell in the holiday season can vary- some years are better than others. These are all factors to consider when making the decision to sell on consignment.

3. It doesn’t always work with every kind of product.

If you make certain types of products consignment might not be right for your business. For example, if your items are very large they could take up too much space in a boutique. Or they could be too specialized and therefore unlikely to sell on a consignment basis. Very expensive items might create too much liability for you and the shop owner. Not every kind of selling works for every artist and maker- and that’s okay! There are other options for your business that might be a better fit.

Have you placed your handmade items on consignment?