Splitting the Proceeds Fairly
Between the Artist and the Shop or Gallery
by Rena Klingenberg.
What’s a reasonable jewelry consignment percentage when selling your work through a shop or gallery?
In other words, how much of the proceeds from the jewelry sale should go to the artist, and how much to the shop?
It’s a good question – the one that jewelry artists ask most frequently about selling their work on consignment.
How Consignment Works
When you sell jewelry on consignment, the shop or gallery keeps a percentage of the money from the sale as its commission for displaying and selling your work, and sends the balance of the money to you.
Most shops and galleries pay artists on a monthly basis, for items sold in the previous month.
(For example, the check you receive in August would be for your jewelry the shop sold in July.)
The shop or gallery uses its percentage of the sale of your jewelry to cover its operating expenses, employees, and displaying and marketing your work – with hopefully a little left over for profit to the owner.
Common Consignment Percentages
In jewelry sales, the most common consignment percentage is 60/40 (60% of the money from the jewelry sale goes to the artist, and 40% to the shop or gallery).
But depending on the shop or gallery, the consignment percentage may be anywhere from 80/20 (80% to the artist and 20% to the shop) to 50/50 (the artist and the shop split the proceeds of the sale equally).
When I consign my jewelry to shops or galleries, I don’t go lower than 60/40 (where I receive 60% of the proceeds from the sale).
I consign to one shop that splits the sales 70/30 (with me on the 70 end), which is very nice for me.
And although it’s nice for the artist when the commission split is as high as 80/20 (80 to the artist), that’s a rare deal.
Unless the shop sells a lot of high end pieces, an 80/20 consignment split may not leave the shop enough money to cover its operating expenses – and it may not be able to stay in business.
I Don’t Do
50/50 Consignment Deals
Why wouldn’t I accept a 50/50 consignment percentage?
Because I believe jewelry artists deserve better-than-wholesale earnings to compensate for the greater risks, increased paperwork, and slower payment cycle of consignment sales.
If the shop or gallery keeps 50% of the proceeds, then in my opinion it should purchase the jewelry from the artist up front and operate on a wholesale basis instead of consignment.
Remember, consignment arrangements are riskier for the artist than wholesale selling.
In consignment, your inventory is basically tied up while it’s on display in the shop or gallery, so you can’t recoup any of your investment on it till the shop sells your jewelry and work through its payment cycle.
Unfortunately, that’s often a slow process, with a long stretch between the time you deliver your jewelry to the shop and the time your check arrives in your mailbox.
Meanwhile, you face the opportunity cost of not being able to sell the jewelry yourself at shows or home jewelry parties unless you take it back from the shop.
The Risk of
Your Jewelry Becoming Unsellable
Another risk you take when consigning your jewelry is that consignment pieces are subject to wear and tear, so that if the shop doesn’t sell a piece and you get it back, it might not be in its original sellable condition.
That happened to me a few years ago.
A shop that had sold a good volume of my jewelry on consignment suddenly went out of business.
I got my unsold inventory back, but the owner just roughly wadded everything up together and shoved it into a plastic bag.
All my jewelry tags and earring cards were trashed, necklaces were hopelessly tangled, earwires were bent, and nearly everything was badly tarnished (where I live, metals tarnish VERY rapidly).
I spent a lot of time untangling, cleaning, and repairing my jewelry – and making new jewelry tags.
How Motivated is the Shop?
In addition, since a consignment shop owner hasn’t put out any of their own cash to acquire your jewelry for their shop, they aren’t quite as motivated to sell it quickly for you as wholesale buyers are.
So I believe that if the shop or gallery keeps 50% of the retail price, then you should receive your 50% up front by wholesaling your jewelry.
It makes good business sense to look for shops and galleries that will pay you a fair consignment percentage for your jewelry.