Looking back on the beginning stages of my business growth, the idea of selling my products in stores was wildly appealing. It somehow gave a legitimacy to my pursuits. It gave me credentials to use on a business card. I felt that I had “arrived”.
There is much more to retail than that, especially in selling handmade and artisan crafted things. When you sell handmade, the most likely way you will find to sell in retail is through consignment arrangements in boutiques and craft mall style stores. In my experience, the life span of most boutiques is usually very short. My business has outlasted all but one of the many boutiques I have been asked to sell through. If you’re just interested in short term sales, no problem. But if you spend time building clientele at those locations, it can be a frustrating waste.
Craft malls can be a similar experience, although I have had some long term success through a few well-run, well established locations. I have been selling through a home decor and gift, boutique style craft mall chain that has been in business, run by the same family for about 20 years. I have been successful at two locations in that chain for ten years. But even the best retail situations are a much bigger investment in time and money than you would think.
In every retail situation I have ever sold through, I have rented retail space, and I have supplied my own displays, shelving, hardware, decor, props, tags, and inventory tracking. My husband and I have even paid for paint and painted my booth spaces a couple of times. Those things can be a substantial investment.
The needs of your space can change over time, so that investment in those things can be repeated as those needs change. If the store goes from pegboard to slat wall, that can mean investing in entirely new hardware and display systems. If the store decides to move your booth space to a different area of the store, that can mean new shelving that fits the new space. So if you get into a retail situation, be prepared to plan for ongoing expenses related to your physical booth space.
I have a very visible location in both of the stores I sell through, so I have tried to change the look of my display at least seasonally, and I feel obligated to make sure to service my displays frequently to restock, dust and tidy up, at least every few weeks. Until recently, that has required substantial travel time, since I used to live hours away from those locations. Travel expenses and that travel time is also a consideration that has to be factored into the cost of doing business that way.
One of the things most people don’t think about when they do the math is theft. (And don’t even get me started on vandalism.) Shoplifting, depending on location, can be a significant cost. I have had some pretty large losses attributable to theft. And not just theft of product, also theft involving displays FULL of product. And due to the content of most consignment contracts, most of the time, it is not compensated for by the store you are selling through. When I have had this mass volume of loss, the store owner has been kind enough to credit me for cost of product materials, but I have had to absorb the loss of displays, production time, and the retail value of my lost product. It is an expense that is hard to factor into the total tally.
As with any sales channel, in retail, you have to have a sense of what your customer is interested in buying and how much they are willing to pay. In my experience, retail has some question marks that are hard to fill in. The demographics are difficult to pin down. Customers tend to be a wide age range, wide socioeconomic range, and a wide range of interests. Teenagers are interested in different things than their parents are (obviously), so if you have a retail location in a mall, you might have a demographic that is heavily weighted toward teenagers. If you have a retail location in a standalone brick and mortar located in a more remotely located area, you might have more older customers.
Because you are not physically watching the traffic that comes to that store and you can’t see how those customers react to what you sell, you don’t have that kind of “intel” to use when you are planning how to configure your product mix. I have always found that to be the most difficult thing about retail. Other than generalities, I can only base decisions about future products based on past sales. To me, that’s like flying blind. Each sales venue is different. You can maximize sales when you know the demographic of the majority of customers, and who is interested in your product.
There are many positives about selling on consignment in retail locations. Your interactions with customers are limited because you’re not on site when the store is open, but they do happen. I have had customers send thank you notes to the store, thanking me for providing the options to buy that I do. I have had customers contact me through the store other ways, to do custom pieces, and those relationships have been rewarding. And I have been servicing my booth when customers have come by to look at my items and have spent time talking with them. So it’s not all anonymous selling.
The relationships I’ve had with these business owners and their employees have been positive also. Some of the cashiers and managers have championed my little growing business, introducing new customers to my items, loving my jewelry and passing that love along. I have benefitted from the marketing efforts that these businesses have done to get people into their stores. The locations I currently sell through market using paid advertising, coupons and special offers that often include discounts on my items, but I still get full price. So the experience has been really positive overall.
The upside to doing consignment is that you can reach those kinds of customers without the commitments of creating your own retail location. You don’t have all the headaches of managing a brick and mortar location yourself. You don’t have to make those big decisions that can make or break your business, you don’t have to manage employees, and you have the freedom to do other things while someone else sells your items. You can also easily walk away if it doesn’t work out as well as you had hoped.
The pros and cons can only be determined by you. Some priorities carry more weight for some people than for others. So even if consignment doesn’t work for some people, it may work for you.