# consignment soaps



## Failte Gate Farm

My husband recently took a basket of my soap to a wedding. The owner of a local western wear store saw the soap and wanted to sell it in his store on consignment. I agreed, but am a bit concerned about his 40% mark-up. People smell the soap and fall in love with it. I've been selling 4-5 oz bars for $4 and 5-6 oz bars for $5. People seem happy to pay those prices, but I'm not sure they'll pay $8.50 for the same size soap in his store. It's an upscale store and he has a very nice counter display, but I'm afraid it won't sell at that high price. I'm sure if it doesn't, he will want me to lower my price, before he lowers his, but I'm not making enough soap to warrant buying supplies in a large enough quantity to make up the loss of profit.

The soap has only been there a week and I haven't checked the sales yet, (I could be worrying about nothing!) but it still bothers me that he may be pricing it too high for the average customer in this economy. What do you think? Do any of you do consignment sales and if so, could you share some tips?


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## MF-Alpines

Wait. $8.50 is not a 40% markup. A 40% markup on a $5 bar would be $7.00. $8.50 on a $5 bar is an 70% markup. Did you give him any kind of price break or no because they are on consignment? 

On a separate note, do you have a written agreement? Who is responsible if soap is missing or damaged? I refused a consignment account because they would not be responsible for loss or damage. Why on earth would I sell something on consignment at someone else's facility yet I'd have no recourse if it were "lost" or damaged?

I offer wholesale pricing to establishments that will sell my soap; no consignments (picked that tidbit up from Vicki).


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## Failte Gate Farm

Thank you! It IS more! He told me he normally charged 40% more, but I noted he had them marked at $8.50. He has some sample bars on the counter and the rest are in a glass display. The display IS really nice, but I worried about the mark-up. I hadn't thought about getting a contract for loss or damaged. Duh!


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## mamatomany

You know what has worked out for me...the few shops that do carry my stuff - I tell them what to price them at and then take 30% off of that. I told them...people who love the soap will come to your store to buy the soap. If you have it priced at $8.00 a bar and they have internet....they can buy the same bar from me for $4.50  My business card is in with every bar of soap, and my web address is on every other product so...if you want 30% on my products  here is what you put your prices at. Has worked out great. Granted my large 6 oz. soaps are next to other soaps that are half the size, but $3.00 more a bar....guess whose selling more soap? I have re-orders all the time.


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## a4patch

I would be concerned about the glass display. Is it enclosed? How will people smell them? the smell is what sells soap to new customers.


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## hsmomof4

Actually, from his perspective, he is doing about a 40% mark-up, even though the math seems wrong. Let me explain. When I was a kid, my grandmother, and then my grandmother and my mother together, had a women's and children's clothing store. One time, I asked my mom about their retail vs wholesale prices. She said that they used a 50% mark-up, which to me meant that they ought to have been taking a $5 wholesale item and selling it at $7.50, but to them meant that they sold it at $10. They considered an item that had a wholesale price that was 50% of its retail price to be marked up by 50% even though mathematically, it was really marked up by 100%. When I said that to my mother, she said, "Yeah, I know, that's just how they think of it and traditionally talk about it." :shrug But doing it that way, which yes, is backwards, a so-called "40% mark-up" puts the price at $8.33, so he just rounded off.

That said, USUALLY, if something is sold on consignment (vs being sold wholesale), YOU would dictate the price (since it is technically still your soap) and the retailer would take their percentage of whatever price you say it should sell at. It is not reasonable to expect that you will get your retail price for items sold on consignment, though you should get more than what you would sell them at wholesale for, since you are taking the risk (if they don't sell, you don't make any money). That 40% cut that he is taking out of the retail price (which IS what he is doing, instead of marking it up 40%) is high for consignment, but very reasonable for wholesale (ie you sell the soap to him, and then he sells it to his customers, that makes the risk all his).


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## NubianSoaps.com

But your wholesale price has nothing at all to do with what his retail price is. I have been asked by buyers what my soap is retailing for in other venues, but for a buyer to set a price because of what I said? It's none of our business! I can't imagine even having the conversation, but then I wholesale pretty much only...I won't do consignments period, there is no reason with a consignment for them to push your product, for them to even take care of it, because you are then responsible for bars opened, bars ruined, bars stolen and not the store.


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## [email protected]

I only have one consignment contract. I set the price, I get 60%, they get 40%. THEY are responsible for lost, stolen, damaged product--it is in the contract. 

Most places that ask about consignment, I just tell them 'No, I don't do that. Product does not cost that much and I don't have a minimum for wholesale. If you want to try just a couple in your store to see how it sells, that's fine and we can go from there.' I had one store only buy two bars of soap. I don't care. It's a sale. As far as what they charge for it...again, I don't care, as long as they pay me my price. I do set my wholesale price so that even at the usual minimum 40% mark-up it is close to my retail price so that I'm not getting undercut. They could also mark-up 100% and still not be unreasonable. Good for them. I figure the more money they make, the more they order from me and the more I make.


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## eam

Sheri - your post is perfect timing for me. A neighbor has an upscale jewelry store in the next town over and has asked me if I'll consign some of my soaps with her. She'll take 40%, I can set the price to whatever I want. I haven't spoken with her yet (this was all through email) so I don't know what her goals are for this. We'll see. I'm inclined to try a bit with her because her business is fairly new (just about a year old), she's young and ambitious (and I'd like to support that), her store looks very nice, and she's a good neighbor.

So, I'm interested in hearing what others have to say about consignment. If I do go for it, I'll post sometime down the road with my results.

Elizabeth


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## Anita Martin

I have done a few consignements, regretably. Out of all I've done, with several different places, I've made exactly $105.I hate consignment, period. People ask for it all the time and to them it makes sense but to me, I have had to struggle with inventory to be able to have enough soap for me to be able to stock my market plus have enough left over for events I want to do. Then someone wants a bunch of soap to consign...usually around 20 bars or so. So, now I'm out of 20 bars that I could make cash money in my pocket, and have to tell paying customers I have run out of that bar if I was low on it, etc. meanwhile my consignment soaps are sitting there getting dusty, dirty, handled daily, sneezed on, etc. I love handing someone a box of soap and them handing me money, which I can turn around and put back in my business...buy more oils, etc. but handing them over a box of my soaps I've taken the time to make, then carefully package and prepare.....not having a clue if I'll ever see a dime on them, or when...if I do it's always months away.....and then wondering how I'm going to find the money to purchase supplies contained in what I just handed over. It's usually people I know in the community that want to consign...people I hate saying no to, who really love my products but don't have the money to invest in them, although somehow they can manage to come up with the money to stock their other products....

I think you should do it at least once, and if it turns out well, that's great. It will be a learning, but do expect to lose your soap if you don't have a clear contract...and if it doesn't sell after months and months and you get it back, you will have to take it as a loss because it's probably been dropped and dinged 400 times.


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## Jenny M

I've had bad luck with consignment & said never again. A good friend told me about a shop she was selling in that was really merchandising her products well. So I checked it out. The owner & manager know their biz & the shop is very succesful. It's a retail operation but they had a whole room that they had turned into a space for local artisans. They have helped me so much with pricing & merchandising. And I get a check the first of every month like clockwork - better than some of my shops that "loose" my invoices.

So check out the shop & if it looks like a well run operation, if the space they have for your products is good & if there are other people doing consignment check with them to see how they are doing. Try it for a month. If you don't get some kind of feed back, decent sales, & respect for your products pull your stuff. Their are a few shops out there doing consignment right.


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## NubianSoaps.com

I was hoping Sherrie C in Indiana would post, she has the best consignment shop...something I was thinking about opening a few years back (God intervened as the roof of the whole mall was ripped off in a hurricane


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## CindyB59

From a consumers perspective - it kind of paid of for someone from me. Found soap in a higher end gift shop. Bought one @ $6.95 to try (raspberry). I then found the website & ordered direct after that for $4.00 ea. The nice part was that I could smell some other scents & know if I liked them or not before I ordered. There were a couple that sounded good on paper, but I didn't care for at all in person.


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## tlcnubians

I've done consignments from both sides (took in riding equipment on consignment when I had my tack shop and sold soap on consignment when we first started the soap business). I don't like it either way. When you're selling someone else's stuff on consignment that means you need to keep what you owe them separate so you don't inadvertently spend it, and when you sell your own stuff on consignment you need to keep track of your inventory so you get paid what you're owed on a regular basis. Wholesaling your product is much easier for both the seller and the buyer. 

Regarding differences in pricing between a retail store and your website, we tell our retailers that although our soap may sell for a bit less if it's purchased through our website, the buyer then has to pay for shipping, so that usually takes care of any perceived savings. 

Caroline


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## Jenny M

The shop I consign with uses bar codes which they email to me & I stick on every item along with a price tag. They have a good inventory system & seem to be meticulous in their accounting. I'm pretty comfortable with them so far. 

And, yes, I am getting online sales from people who have bought from them. Just sent an order out Monday.


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## Anita Martin

For those of you who consign, how do you keep track of inventory? Do you visit the shop regularly or does the shop owner call and say they need more, or? I still have one shop on consignement. It's an upscale shop and the owner came to my market and asked me to consign with her last winter. I've recieved exactly one check for $25 several months back. She did, however come back to the market and ask for another box of soap, which I regretably gave her. Getting a check once a month, no matter how small, would be so nice. The shop is an hour from me, out of my way, and for less than $5 a month I hate driving out there for nothing. 

If it wasn't such a beautiful shop I'd never have even considered it. The items in it are exquisit and it is clean, clean, clean. It is is a location that gets a lot of traffic driving by, but rarely does anyone stop. It's a shop all by itself and doesn't seem to attract customers.


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## Jenny M

I just invoice like I do all my accounts & keep track that way. I have been reluctant to commit too much inventory to my one consignment shop but since they are doing so well I upped my last shipment.

That's the thing about shops. Even if they are very nice if they don't get much traffic then what good are they? If the biz is just a hobby or off shoot of some other biz the owner has & they are not making a real income from it then you may be better off going somewhere else with your products.


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## hsmomof4

Anita, I would drive out there and see what is going on. Maybe I'm too cynical, but I'd be suspicious of her getting more soap but you not getting any money in return. How much soap have you given her? Since you aren't getting any money out of it at this point, I'd be asking for my soap back. If she wants to keep it, then I'd tell her that she can if she buys it (wholesale). I've had a store ask about consigning soap and I just told them that I didn't want to do that but I'd be happy to wholesale to them. They bought the soap.


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## Lynn_Theesfeld

:yeahthat


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## Anita Martin

I guess she cannot afford to put money into more items for her store. She's got quite a few things on consignment. Furniture pieces, etc. She did give me a check when I managed to get out there to check on it, but she'd only sold 7 bars in 5 months. She wanted another box of soaps to do a display for christmas. I gave her another 20. 

I never thought about invoicing for consignment. How would I charge when I don't know what she's sold, or is it just a reminder that she might owe me money? 

I do need to develop a different attitude about it....


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## hsmomof4

Someone who cannot afford to buy products for their retail business is having problems, wouldn't you say? People get themselves in over their heads, and you don't have to let them drag you down with them. If her store was doing well, she'd have money to re-invest. I think that people think to themselves, "Oh, I'd love to have a store" without fully realizing what the overhead is going to cost them, how long it will take before they're in the black, etc. A grocery store opened up near us and closed again within the year. It was brand new construction, not a chain, but higher end in terms of the cost of items without the items themselves being anything special. It was somewhat out of the way for anyone who didn't live in that town (pop about 8k, although people from a few other towns would probably drive past on their way to something else). And 10 minutes from a Super WalMart and a Price Chopper, so if you can't compete with those prices, then you need to have something better to offer, which they didn't. I don't know what they were thinking when they built that place, but it never made any sense to me. And it folded so quickly, that it seems to me that they somehow thought that they'd be making money right away. Completely stupid.

I guess that's a long way to say that if she's not prepared to buy wholesale, I wouldn't be giving her 20 bars of soap.


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## Jenny M

Anita, I just keep the invoice open so I can post payments to it. I only take them product when they run out so I know I have been paid before letting them have more.

But really, consignment is a gamble. You can hedge your bet if you know it's a viable business & get good feed back from others who consign with them. The shop I'm with is a franchise - "Life Is Good". I think the owner has limited selection of items he can sale but he has an extra space that he has turned into a gallery for local artisans. Luckily he sees that space as valuable real estate that he can cash in on & promotes the little annex just as he does his regular store.

Yep, if you are only getting a few sales every once in a while then I would not continue. I mean, your soap is sitting there getting dusty when it could be sold somewhere. That's like letting that lady hold your money when you need it to keep your business going.


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