ADVICE ON HANDLING CONSIGNMENT STOCK.

Consignment is when you are provided goods by any supplier large or small, business or individual to place in your shop and only pay the supplier once the goods are sold or returned to the supplier. It is common arrangement with local markers and artists.

Here is our advice for handling consignment products. 

1. Document all terms in writing and have the supplier and yourself sign with as the terms. Included in the document should be:
   • Details of the parties.
   • A statement: this is the entire agreement.
   • Percentage commission for sale. Our suggestion is 50%. You could use this as a qualifier on proceeding. i.e. low commission = a no to proceed.
   • Who is responsible for theft.
   • Who is responsible for breakage.
   • Details on when the supplier is paid – i.e. on final payment in the case of a Lay-By.
   • Details of any other obligation in your business.
   • Your ability to refuse any item provided.
   • Agreed restrictions on anywhere else the supplier may place the goods to compete with you.
   • The returns process.
   • Agreement on discounting.
   • Your margin / commission.
2. Sign for the receipt of each item. This should show suggested retail and refer to the agree terms and conditions.
3. Immediately label the item.
4. If you are tracking in your software, and this is RECOMMENDED, add the item into your software and place a barcode or PLU on the item. If you do not do this you will have to pay for what is supplied less what is returned and that could cost more than the revenue you make.
5. Pitch items from local makers and artists together in an area of the business set aside for this. Note: newsXpress is planning to provide art for signposting this area.
6. Request from the supplier a fact sheet about them that you can place with the products. This fact sheet should ‘sell’ the local market / artist. This should be updated as they evolve.
7. Always do your own count of stock – count when stock comes in, count when you are being charged for what is sold, count when products are being returns.
8. Ensure employees are trained in the stock.
9. Have a policy regarding discounting consignment stock or whether discount vouchers can be used to purchase it.

Before you commence any consignment arrangement, ensure that it fits with how you see your business, that it makes sense to you and to the narrative on your shop floor. This is what will make sense to your shoppers. 

The right consignment stock can be a terrific add on to the business if you bring it on in a structured and professional way that respects your business plan.