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how does it work

Posted by danaoh (My Page) on
Wed, Oct 31, 07 at 16:04

talking to a guy who is opening a new restaurant in a building with extra space. Would like to put my purses and another quality crafter or 2 in there. But neither one of us knows how it works. They keep a % of the sale, but how much? What about tax? Do I have to get a vendors license, or do they sell under their license? HELP

Follow-Up Postings:

RE: how does it work

Consignment by me is about 20% to 25% and they take care of everything for you . ( Which is NICE !) That covers bags,charges with a charge card , all expenses associted with selling . They collect the tax ,too . I'm sure your sales are added onto their income and they pay the tax. I might be wrong - but I'm pretty sure this is how it works. I don't think you need a sellers permit .... no one in any consignment store has one. I'm excited for you !!!!!!!
I hope you do great !!!

RE: how does it work

At the Antiques & Collectibles store where I worked here in Ca., they would sell your items, take care of the taxes, checks, credit cards--all of that. It was a 60/40 split--you 40%. They said that was because they paid for the building, utilities, personnel, insurance, and provided you with the display space and the customer base. Hope that is helpful. Luvs

RE: how does it work

The commission split is always negotiable. 60% is far too high for me. When we started out doing consignment the norm was 30% commission on sales.

60% is a better deal than if that shop was to buy wholesale! Because then they would only double the wholesale price and end up with 50%. And they have NO money invested in store stock. So that's a REAL sweet deal for them!

And as a supplier I would want X dollars for my product. So the shop would have to raise the prices to THEIR market, but I would get MY price for my work.
As an example, I want $18.00 as my wholesale price. If that shop wanted 60% of RETAIL as their commission they would have to charge $45 in the shop. The problem is, my suggested retail would be $36. (Double the wholesale price.)

Here's how you establish the price in a consignment shop.
Your set price is $20. That's what you want for yourself. The shop's commission split is 40% to you on the RETAIL price. So you DIVIDE your price by your commission. $20 divided by .4 is $50. That's the retail price that is set by the shop. If it's too high, then demand a lower commission for the shop. At the MOST it should be 50/50.
But usually it's 30%. And 70% of the retail price is yours. So that $20 is divided by .7 and the shop's price is $28.57 But you still got YOUR $20!

When dealing with shops you work from the bottom UP, not the top DOWN. You get YOUR price for your work. Then the retail price is established at the shop's level.


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