Consignment vs. Wholesale

Consignment vs. Wholesale


July 30, 2018

I get asked frequently by other product-based business owners whether consignment or wholesale is right for them. In this episode, I lay out which businesses are best for each method and talk about my experience trying both with my company, Rebekah Scott Designs.

Consignment means you have an agreement to pay a supplier of goods after the goods are sold. Many times, this looks like a commission check to the retailer who sold your goods.

Consignment pros and cons:

  • Must be well organized
  • Recommended for $70-300 product range
  • YOU still own the product
  • Products must be switched out frequently (every 6-8 weeks)
  • You help sell the product by letting your audience know it’s there!
  • You control the commission percentage (usually between 20-40%)
  • Do two “meet the maker” shows at the retailer’s location per year
  • You set the payment plan (once per month, every 3 months, etc.)
  • Renew contracts every year
  • Develop a relationship by checking in frequently and asking for feedback!
  • Provide them with as many marketing pieces as they need and will allow!

Wholesale means you sell the product to the store (usually at a discount or wholesale price) and they own and sell your products.

Wholesale pros and cons:

  • You sell at about 40-50% of the price
  • You get paid right away
  • Recommended for $5-70 product range
  • Provide 3 different options for the buyer (package A, B, or C)
  • Store owner will “keystone” it, most likely
  • They are fully in charge of sales
  • They market the products and do the set-up
  • Re-order quarterly or 2 times per year
  • Do two “meet the maker” shows at the retailer’s location per year
  • Develop a relationship by checking in frequently and asking for feedback!
  • Provide them with as many marketing pieces as they need and will allow! 

I recommend sending in a “mole” to shop the retail location to see how they pitch your business! 

We got this Encouragers!