As a jewelry designer for K. A. Mace Jewelry, I found very early on that many boutiques and retailers are hesitant to take a risk on new designers, or designers that are not "established". I went to great expense to send out countless catalogues, postcards, emails, samples and other very time-consuming information to retailers interested in my jewelry. I, of course, wanted to wholesale my jewelry creations so that I could ship the orders and be paid. Instant gratification, right?



Unfortunately, those retailers often came back to me with the challenge that they only buy wholesale from more "established" designers. They would offer me a consignment arrangement, but at the time it seemed too risky, not "upscale" and overly complex for my simple business plan. It becomes a bit frustrating for many designers: If no one takes a risk on you, how can you get the exposure that you not only want but, more importantly, need?

And, really, what exactly is consignment? Consignment is defined by Wikipedia as:

"the act of consigning, which is placing a person or thing in the hand of another, but retaining ownership until the goods are sold or person is transferred. This may be done ... for sale in a store (i.e. a consignment shop). In the context of sale, it is usually understood that the consignee (the consignment seller or the party to which goods are sent) pays the consignor (the person with items to sell or the party by which the goods are consigned) only after the sale, from its proceeds."

Bottom line: Retailers minimize their risk by merchandising and sellling your product without taking your art and designs into their physical inventory.

With that said, consignment need not be the "mystery" business arrangement that it once was. I have found with my business, K. A. Mace Jewelry, that consignment has been profitable for me. However, early on, I was on my own to figure it out. Not as many jewelry designers and artists were on the internet, a fraction of the forums and community groups existed, and to be down right honest, with less public information, other designers were not as upfront with their experiences. Now that the internet has opened up the flow of ideas and information, more and more designers are openly discussing what has and has not worked for them.

You can now easily research consignment online, contact other designers in your tier and/or market, even ask your local boutiques and galleries if they consign goods. Different artists may encounter different challenges to consignment. For example, paintings and other artwork on consignment has to sometimes go through an authenticating process. For jewelry consignment, you may be asked to provide documentation of the gemstones that are in your pieces of jewelry. The more you educate yourself to what consignment means to your goods and services, the more likely you are to know if it is the right fit for you.

Question #1: Are you willing to be creative, think outside the box, and experience different business paths to expand your audience and obtain the exposure and experience that you want and need?

Consignment is not for everyone, but more and smaller retailers are moving in this direction. It reduces one of their big expenses--inventory, and makes them far more flexible when they can move in and out of goods more quickly. The retailer avoids markdowns, dealing with worn or "dated" goods, and provides fresh, new merchandise to returning customers. In the current retail environment, consignment will become even more vital to the smaller retailers, boutiques and galleries to even survive.

You, however, may find that you truly need to take the risk to get your product into the marketplace and in front of potential buyers. This is about your survival as well, your ability to survive in a highly competitive market of jewelry and other artisan creations. Do your due diligence and you can ensure that you are indeed putting your product in the right hands! Consignment does not equate to a low end tier of the retail market. That is simply false. Many very high end boutiques in major markets across the U.S. bring on the next wave of new designers through consignment agreements.

One of the great upsides to consignment is that it is a way for both the artist and the retail to initiate and develop a long-term working relationship. The relationship needs to work for you, as the artist, just as much as it needs to for the retailer. I have found new wholesale customers through a "trial run" of consignment, I had customers that became repeat customers through my website, and I made great business relationships and enjoyed traveling to do trunk shows and appearances. It can be really rewarding in many aspects for an artist to sell through consignment, you just need to be armed with the facts, and an ironclad consignment agreement or contract.

Question #2: Are you comfortable with negotiating agreements and contracts?

Negotiating a sound consignment deal with high end boutiques, galleries and other retailers can be the answer to that very dilemma. I stress a "sound" consignment contract, as consignment can be confusing, intimidating, and even downright scary to some designers. Many of us have great creative minds, but need some help in the other business realm of numbers, contracts and such.

You must have a consignment contract or written agreement to ensure that both parties are covered. Most often, boutiques and galleries have their own agreements already typed up, or online, that they can cover with you and can be edited to match shared expectations. If you find a retailer that does not have a contract, be wary. If you find a retailer that refuses to enter into a consignment contract with you, be extremely wary! You do not want to put your work into the hands of a retailer that is not willing to protect you and themselves.

If you have a friend, neighbor or family member that is well-versed in the law, this might be a great time to ask them for their help in reading a contract, or assisting you with creating one. I have sample contracts that I have brought with me to meetings that covered my basic legal needs and questions. While it may not have been the contract that we used, it certainly established with that owner or manager that I was savvy, I was educated and informed, and that I was professional.

Question #3: Are you able to take some leveraged risks with your inventory and the flow of your goods and payments?

No doubt, consignment can be a complex business relationship. You are putting your work in the hands of the retailer to sell, but no transfer of money is completed until the item is sold. Does that sound a bit scary? Yes? Well, it can be, and it is a legitimate fear to address. After all, we have worked extremely hard to learn our craft; we have huge investments in our educations, materials, websites, and more.

I know many artists who just "refuse" to do consignment because they feel that they deserve to be paid in a wholesale arrangement for their work. First of all, some do not need to, they are established, they have wholesale and retail work that keeps them busy, they are profitable and they are content and comfortable. Furthermore, some just truly do not understand how consignment works. And, candidly, some cannot carry the financial risk that consignment can pose to an artist. After all, again, you are not paid until the consigned items sell.

Early on, I found that the percentage of consignment to my percent of wholesale was pretty high, at first about 80% consignment to 20% wholesale. I had to very quickly find and work with resources that were willing to give me terms., With terms, instead of having to pay for materials on the spot, I could establish an account with them that would give me 30 days to pay, or even 60 days. I have even used credit cards that offered 0% interest for an extended period to purchase materials, knowing that I could pay that balance over a few months in full before any interest hit. You have to know what timing works for you, how turning inventory is factored into your business plan, and if you can build a resource base that can be flexible with you.

Consignment is already becoming a more prominent and necessary manner for small retailers, boutiques and galleries to obtain new and exciting art and jewelry for their customers. By educating yourself to the facts of how consignment can work for you, you will find yourself a hot commodity to these retailers, you will establish yourself as an artist by creating a wider audience, and you may very well see just how consignment can help you grow and develop your business, even in challenging economic times.