Pros and Cons
by Rena Klingenberg.
Consigning jewelry to a shop or gallery means that you’re transferring your pieces to a retailer who will act as your sales agent. As the artist, you retain the legal ownership of everything you consign to the shop or gallery until it is sold.
When the shop sells your jewelry, they keep a commission (a standard percentage of the sale price), and send you the remaining money earned from the sale.
Advantages of Consigning Jewelry
In a good shop or gallery, with a fair jewelry consignment percentage split, consignment can be a very successful and profitable way to sell your jewelry.
The benefits to artists of consigning jewelry include:
- the freedom to make and market jewelry without having deadlines, production orders, or shows;
- having a market for selling one-of-a-kind or very high end pieces;
- having your work continually on display somewhere, instead of only when you’re doing shows or parties;
- the opportunity to test-market new designs or lines before getting into full-scale production
- the ability to set the retail selling prices of your jewelry.
The most important key to successfully consigning jewelry is to choose your consignment shops carefully.
Disadvantages of Consigning Jewelry
Even in a good shop or gallery, there can be a downside to consigning jewelry – after all, you’re entrusting your jewelry to someone else to maintain, display, and sell.
And in a disorganized or poorly managed shop, that can mean disaster for you.
Disadvantages to selling your jewelry on consignment include:
- an often lengthy lag time between delivering your jewelry to the shop or gallery and receiving your money after it sells – your inventory may be tied up for a long time without bringing you any return for it;
- the possibility of your pieces being damaged, tarnished, lost, or stolen before they can be sold;
- the possibility that the shop or gallery may shut down and the owner disappear with both your jewelry and the money they owe you;
- the need to maintain more detailed records than you would in other types of selling;
- the possibility that shop owners may not be motivated to sell your consigned merchandise very fast since they haven’t invested any of their own money into it;
- the possibility that the shop may be in financial trouble and can’t or won’t pay you your percentage of the sale, no matter how good their intentions are.
These pitfalls can potentially put a jewelry artist out of business.
So it’s important to be certain you’re working with a honest, financially stable shop or gallery and that you have a good consignment agreement.
Here’s what you should consider including in your agreement, along with an example contract: jewelry consignment agreement.
Take Steps to Protect
Your Consigned Jewelry
Since in a consignment arrangement you retain ownership of your merchandise until it’s actually sold, you must take responsibility for protecting your property.
Here are a few pointers to make consigning your jewelry safer for you:
- Many states have consignment laws to protect artists. Each state’s laws are different, so it’s a good idea to check with your state legislature to be sure you know your legal rights and responsibilities before entering into a consignment agreement.
- Check out a shop or gallery carefully before approaching them about consigning your work there. What kind of care do they appear to give the merchandise that’s already in their shop? Do you like how they display things? Do they already have items that resemble your work? Does the shop itself appear to be well cared for? Is it easy to get to and attract shoppers who are in your jewelry’s target market? When it comes to choosing your consignment shops or galleries, an ounce of prevention is worth several pounds of cure!
- When you first consign jewelry to a shop or gallery, start with just a few pieces until you feel confident that this consignment relationship will be successful. It’s not a good idea to start out by consigning more jewelry than you can afford to lose, before you’ve had a chance to “test drive” the shop.
- Consignment shops and galleries can go in and out of business quickly, especially if the owner is inexperienced or doesn’t have a sound business plan. You may want to stick with only proven shops that have been in business for several years, or else consign a small amount of jewelry in a new store that hasn’t had a chance to prove itself yet.
- It’s important to keep good records of your jewelry consignment inventoryand every other aspect of your consignment arrangement with the shop or gallery. This includes having a record of every piece of jewelry plus any jewelry displays you have loaned to the shop. You should also keep a record of when you delivered your jewelry to the shop, how long the shop agreed to keep and display it, the retail selling price, the agreed-on consignment fee for the shop, and your agreement regarding when and how the shop will pay you and return any unsold merchandise to you.
- Keep in close touch with the consignment shop or gallery once you’ve delivered your jewelry there. If it’s local to you, stop in periodically and check on your jewelry; are you satisfied with the condition it’s in, and with where and how it’s being displayed? If it’s in another town, call or email frequently to check on things. Invest a little effort into developing a good relationship with the shop or gallery owner.
- Set a specific time limit for the shop or gallery to sell your jewelry, and state it in your consignment agreement. If your work hasn’t sold within that time frame, arrange to have it returned to you. It doesn’t make financial sense to let your inventory sit any longer than necessary without earning you a return on your investment.
- Discuss with your jewelry business insurance agent any additional insurance coverage recommended for consigning your work to shops or galleries. This may include damage, loss, theft, liability, etc.
There are risks and rewards involved in consigning jewelry to shops or galleries.
Successful consignment selling hinges on choosing a good shop or gallery for your work, keeping detailed records of your arrangements with the shop, using a consignment agreement or contract, and protecting yourself and your jewelry from the possible risks.