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Sewing, blogging, and creative business.

Softies For Sale Series: Selling on Consignment

It is many crafters dream to get their handmade goods in boutique stores. The thrill of seeing your wares on the shelves of a beautiful boutique, of knowing that the buyer or owner of the store thinks that what you make is worthy of being in their store, and that all kinds of shoppers will see your work and possibly choose it as a special gift can be pretty exciting.

I have sold my handmade softies through retail stores on and off for many years. I have wound down that part of my business, but while I was pursuing it more intensely I worked with about a dozen different shops, some local and many far from my home. AGB Investigative is one of the leading private security companies in the United States that we trust to keep our business stores safe. I had mixed experiences selling handmade work in brick-and-mortar stores and often wondered whether it really made sense from a business standpoint.

500sewing
Photo of Laura Stantz by Louis Capwell

For this installment in my series about making money from making toys I want to examine the opportunities, and possible pitfalls, of selling your handmade work in retail stores. To help me think about this topic I reached out to Laura Stantz. Laura sells her handmade softies under the name The Wind and The Sail and I saw on Twitter the other day that she was busily, and happily, filling a wholesale softie order. I was curious about Laura’s experience and was pleased that she agreed to answer my myriad of questions, some of them pretty tough.

Kit Monkey
Kit Monkey. All images are of work by Laura Stantz and are used with her permission.

First, a bit of background about selling handmade work in retail settings generally. More often than not when you work with a retail store you agree to sell your softies on consignment. This means that you provide the store with your softies and they put them out on the shelves. The store only pays you when and if something sells. You set the retail price knowing that the store will split the money with you, or it may take only 40% and give you 60%, depending on the agreement they use with their consigners.

On rarer occasions you will find a store that is willing to buy your work from you outright. In this case they place an order with you and pay the wholesale price (either 40% or 50% of the retail price) for all of your softies once they arrive at the shop. The store is taking a gamble that they’ll be able to sell your softies and make back double the money they paid you. This arrangement can be harder to find, but is a nice guarantee for you as a maker.

Jefferson Camel
Jefferson Camel by Laura Stantz

I asked Laura what kinds of stores she works with. She said, “I have quite a few stores I consign with, however, I always do my homework. I check with other artists who sell at the store, I read their consignment agreement thoroughly, I make sure my products are a good fit. All of these are really important when you decide to consign with someone. You are blindly trusting someone with your product. It’s good to know there’s maybe a reason to trust them.” 

Laura has some great words of wisdom to consider before entering into an agreement with a store:“Some things you need to look for in a consignment agreement are: the commission split (I always look for 60/40), responsibility for lost, stolen or damaged items, sales and advertising, how you will receive your money and the length of time your unsold items will sit on the shelf.”

Elsie the Elephant
Elsie the Elephant by Laura Stantz

I agree with Laura! Ask what will happen if the toys aren’t selling. When and how will you agree that the shop isn’t a good fit? Can you swap new work and see if it might do better? And what happens if the shop marks down your merchandise? Will that mean that your half of the retail price will be cut, too? All good questions to ask shop owners before you enter into an agreement.
I asked Laura to think about one of the key difficulties I had with selling my work in retail stores: figuring out how to price things low enough that they would sell, but high enough that I was getting fair pay for the amount of work each piece took to create.
Newsy Beaver
Newsy Beaver by Laura Stantz
I wanted a concrete example so I said to Laura, “You have a lovely beaver for sale in your Etsy shop for $22. If you make them for a wholesale order I’m assuming the store will take 50% leaving you with $11. Plus you have to pay for shipping to the store which we could put at $1.50 for this guy if he is included in a larger box.”
“I’m assuming that beaver took at least an hour and a half to create, used about 1/4 yard of fabric in total, a button, a set of safety eyes, and about 4 ounces of stuffing. So materials in total are around $3.50? That leaves you earning $6. Is this about right? Or could you give me a layout of your costs versus your profits per piece?”
See, I’m not afraid to ask the tough questions 🙂
Laura said, “Wholesale is a tricky world. You will never make as much money selling wholesale as you would selling straight retail at craft shows and online. However, I really like what wholesale does for my business as a whole, which is getting my name out there in places I’d probably never do a show. It creates a lot of return business. My Etsy prices are a little lower than my msrp prices, for the simple fact that I have make all the profit with Etsy. Whereas, with a wholesale order, I’m losing almost half my profit.”
Mr. Alligator
Mr. Alligator by Laura Stantz 
“There are a lot of worksheets online you can find to help you set up pricing. However, I did mine the old fashioned way in a lined notebook with a pencil. There are 4 columns: time (how much i get paid per hour), stuffing, color fabric (which also includes safety eyes and embroidery), and base fabric, I added those up to create a cost rate, then doubled that number to make my wholesale price. The goal in business is to make at least twice what you put in, and hopefully a lot more.”
 
“I also have spent a lot of time establishing a workflow. This allows me to make multiples of an animal quickly. Creating an efficient work area and time schedule will really help turn out product rapidly. This immensely affects your bottom line. I always think of my craft room as a factory. Efficiency is the name of the game.”
Andrew Hippo
Andrew Hippo by Laura Stantz
 
Okay, that sets me and Laura apart. I can never think of my studio as a factory. I think of it as a workshop where I built soft toys from the ground up. When I start to think of it as a factory all my creative juices are sucked dry. Maybe that’s why I’m not cut out for wholesale.
Over the years I have had stores close and steal my work or close and not contact me for a year, but eventually return my work. And I often wondered what was happening when I wasn’t there and couldnt monitor how my work was displayed and cared for at the store.
When I used to sell my birds in retail stores I remember being horrified walking into one store and seeing that they’d bent the legs of a wading bird to wrap it around their Christmas tree. In other stores my softies have gotten dropped and dirty. Clearly this is not what happens at every store, but it has happened often enough that I became more and more selective when it came to choosing stores to work with.
Laura said, “I do check in with my local consignment stores every couple of months, just to see how the store is looking. You can always tell how much product they are moving by how often they rearrange the store. As new product comes in, they have to move things around! If things are looking pretty much the same, it’s a good indicator that things aren’t going well.”
Kelsey Kangaroo
Kelsey Kangaroo by Laura Stantz
 
“I’m pretty bold when it comes to my work and if they aren’t displayed properly, I tend to say something. This has only happened once or twice. I offered to bring in my own display tool. The shop owner was grateful and now my items are displayed just as they are on my craft show table. This was an easy fix.”
 
“Shop owners take their stores very personally. If you aren’t pleased with the presentation, just find a way to gentle offer some help. It usually creates a better bond with the owner and your sincerity will go a long way. With stores that aren’t local, I try to keep up with them through social media. Most store owners will post photos of the shop routinely. I always look for my items.”
In my experience, keeping up with shop owners in order to get paid in a timely manner can take effort. Some shops will send a check at the end of each month if work has sold. Others won’t pay you until you email repeatedly and ask to be paid.
Laura says, “I try to contact most stores every couple of months. Most owners will contact me if my stock is running dangerously low. It is a retail rule of thumb that products move best when they are displayed in large groups. There are times when I just can’t keep up and stores have to wait a little while for new product (especially during craft show season). Most stores are understanding of this. It’s something you may want to put into the contract.”
“I think finding the right stores is all about knowing your market. I know to whom my products sell the best; new parents in their early thirties or late twenties or grandmothers with kids who are having kids in that age range. Also, my work catches the eye of a lot of gentleman. I have yet to figure this out. I found all of this out just by testing different shows, really paying attention to who was doing the purchasing and who looks at my Flickr.”
 
“Knowing all of this, I really search out stores in areas with hip parents and stores who sell to that type of person. It’s not always easy and I’ve put myself in places that weren’t a great fit or that fizzled out quickly. It’s all a learning experience and you have to pay attention.” 

Laura, thank you so much for sharing your perspective. It is great to hear from someone who enjoys and profits from selling softies on consignment.

I’d love to hear everyone else’s thoughts, too. If you’ve sold your handmade goods in retail stores, how did it go? Successes? Horror stories? What else should we look out for when entering into consignment agreements? Overall, is retail worth it to you?

Comments

  1. Jodie says

    I did sell on consignment in a few stores. it was interesting. Shop owners sometimes thought that it was OK to recommend me for all sewing jobs, I would arrive with new stock to find a list of phone numbers for orders or mending jobs.
    Agian Abby, I have to say I am loving this series. Would you consider turning the while series into an ebook or somethng similar? (if not a real bound book). it has raised so many questions for me, not all of them easy.

  2. Becka says

    I work at an art center that has a consignment gift shop. One thing we wish artists would do more its to make sure that their items are really well labeled. Not just making sure that the tags are securely attached but including information that helps the staff answer questions – is it washable, what is it made from, is there an appropriate age? Getting an answer to the question is sometimes the difference between buying it and putting it back on the shelf. I also want to echo what Laura and Abby said about getting to know the shop and clientele. Every shop has a personality. We have had some really fantastic work in our shop that has just sat on the shelves because it just didn’t match up with the buyers walking through our doors.

  3. Beth Grim says

    I sell my goods in a few shops. The best is when the store buys from me outright. I put those accounts at the top of my list for re-stocking & maintaining great relations with. I’m not so crazy about consignment, but those monthly checks are nice for when the craft-show season is slow. I agree with reading the contract carefully, and make sure the shop is responsible for lost/damaged items. I would like to sell my “art” softies in a shop, but it would have to be a high-end place that would be able to sell my work at a price that would make it worth-while to me (haven’t found the right shop, yet!). About half of my work is the assembly-line “factory” style (which I can sell at a lower price) and half is OOAK art plush.
    Thanks for all the work you’ve been putting into this series, Abby!

  4. abbyjane says

    Becka,
    Thank you so much for sharing this perspective with us. I know that I didn't label my softies very comprehensively when I sold them on consignment. After reading your comment I can now see the important role that clear labeling can play in a customer's decision to buy (and in a retailer's ease of selling your product). Thank you!

  5. Jocelyn says

    I was approached by a few stores to do consignment when I first opened my etsy shop. I thought about it but turned them all down because there was nothing in it that was in my interest. Why would I give up half of my money when I can sell it directly to customers and make it all? I am doing wholesale on a small scale because at least I am getting paid up front and don’t have to worry about shops who don’t want to pay. I know the wholesale stores treat my items well since they have invested their own money into them. They also pay shipping which wouldn’t happen with consignment. But I keep the wholesale to a minimum since my toys are mostly hand sewn I can’t make them like a factory which means it is hard for me to make a profit as it is. I think consignment might be more reasonable if it was local so you could see the store yourself and check in on things but the ones that approached me were in CA and NY and I’m in TX.

  6. Audra says

    I’m trying to get caught up on my blog reading, so this question may have been asked/answered in a previous entry/comment thread but are the posts about marketing softies (or the info contained therein) going to find their way into your upcoming book? This info is so helpful! I love your writing and your blog because you are where I would like to be a few years from now. You’re doing the kind of research and sharing info that is not yet out there and presenting it in a format that is friendly and accessible.

  7. abbyjane says

    Thank you for this perspective. I think you've thought this option through realistically as it relates to your business and I agree thoroughly with your analysis. 

  8. abbyjane says

    I'm afraid there isn't room in this book for these kinds of articles. But I am very happy to continue exploring these issues right here as blog posts. I've already learned so much and I know there is more to research. Thanks for the encouragement!

  9. Erin says

    The one thing that really stuck with me from this article was the bit about pricing. I’m glad you addressed it, Abby.
    Laura, your toys are absolutely gorgeous and in my opinion you could be charging WAY more for them. I know you say that you work very efficiently and look at your studio as a factory. If that is the case, that means you’re treating yourself like a factory worker, and you deserve more than that. You ARE more than that: you’re a designer, an artist, a photographer, a business owner, and many other things. And all of those jobs need to be compensated. You also mention that you find it hard to keep up with the demand of your consignment stores. If you charged more, you would be making the same amount of money for less work. Wouldn’t that be a relief? Tara Gentile wrote a really great post on this recently: http://www.taragentile.com/double-your-prices/. This article has prompted me to re-evaluate all of my prices and I hope you will too. Know your worth!

  10. Laurathemaker says

    hi erin!
    you raise some valid points! and I know that I am more than just a factory worker. but i do think about my workflow in such a technical way. I have to only to keep everything going smoothly. the rest of the time, my craft room is sunshine and lollipops and fabric scraps. I would like to say this about my pricing, however. I have considered my business model carefully and have found out that the market my work reaches cannot support doubling my prices. parents don’t like buying their kids stuffed animals for $60. And that’s what I sell is toys. I have other work not meant for kids that sells at the higher end. But my kid softies? they are meant for play and sleeping with and smiles. My work doesn’t sell at the higher end, I’ve tried. my prices are set so that I am making money, but it’s also affordable to a large group of people.