Sellling on consignment

[Ohiobeek]

Hey gang, I have an opportunity to sell both our honey and pure Maple Syrup at a local ice cream shop. They sell other local products too. The owners are people that we know and have known for a very long time. They are really good and honest people. They want to carry our product on consignment. My question is, what is the going rate for consignment? I don't have a fear of not being paid. I am not sure if we should offer a percentage of each item, or a set amount. I am sure that they will put the ball in our court to start negotiating details. I just want to figure out a starting point. Thanks for any help!

[David W.]

I am interested in this to . I have a couple stores that I would like to place our products and I'm not sure as what the percentage should be.I have a friends wife that has a thrift store that I have placed products in and we agreed on 20% but on some of my products I had to raise my prices to cover some of that. I don't know if that is the going percentage or not she said that was the same deal that she had with other people she is selling for in her store.

[beemandan]

In my experience, I cannot think of a single instance where selling on consignment has worked out in the long run. Including some honest, friends who had a shop nearby. When their business folded…they were full of genuine apologies with promises to pay everyone back every cent owed. This was ten years ago.
And then there is plenty of opportunity for disputes about how much was sold. Lots of potential for hard feelings.
I wouldn’t even consider it myself but would advise you to price it accordingly.
Good luck.

[hpm08161947]

We have done it that way.... 20% sounds like about what we did, but we no longer do it that way. Instead we get a set amount per unit sold and the merchant can charge whatever he likes.... they usually know what the market will bare. Our preferred method is to simply sell the product to the merchant at delivery or within 30 days. Most merchants who start out with consignment soon switch to just purchasing outright, as we give a better deal for this option.

[rainesridgefarm]

We do net 30 on all of our stores. Most cut us a check when we are there but we give them the choice. I have done Consighment and like the others it just does not work as well. They have no incentive in moving your product as fast as they would if their money is tied up in it. If they are short on cash then the net 30 gives them some breathing room.

[rlsiv]

raines hit the one problem on the head - the store doesn't have any skin in the game taking your product on consignment.

I prefer to offer them lower order quantities (as few as 12 jars), COD payment terms, with rapid replenishment should they get close to selling those out. If they get low and need some more I usually have it to them within 24 hours. This works for me because the few places I deal with are fairly close to home (or to my day job). It lets them get the product on their shelf, I supply the "advertising" and sometimes literature, recipes, etc. I've also gone on a Saturday and attended the display with some beekeeping stuff to answer questions, sell my product for them, and talk up their store.

As far as pricing, I don't really like to let the store "set" the selling price - I get a pretty penny for my honey (well above the area average), and prefer to give them a pre-negotiated discount and sell it for the same price as they can get it from another store or from me. That way nobody is getting "undercut" and the value of my product isn't dilluted. This also lets me offer a deeper discount should they like to order in larger quantities compared to one case at a time.

[rtoney]

I tried a 1.00 off per jar for consignment in some gift stores and did not do good to much work trying to keep up with what they had or sold. I now sell to the store or sell it myself. If I don't sell it today it won't go bad tomorrow, I sell quarts for 16.00 and had a guy call and said he bought it by the 1/2 gallon for 15.00 about 40 miles down the road I told him to buy it down the road.

[kbfarms]

20%-30% is a good number. I sell on consignment in addition to direct sells. I do increase the price of the honey to cover the consignment fee, so I still get my baseline price per a pound.

[beedeetee]

We sell amost of our honey at one place (fruit/vegetable stand) on consignment. They are open from June (strawberries) through October. Over the years we have agreed that they keep 20% but we set the prices. Our family has known their family for 50 years I suppose. Our farms are next to one another and they lease some of our land for cattle and filberts. So we know each other well. They sell over $5000 of honey each year.