Sunday, September 27, 2009

Consignment vs. Selling Outright

I've found that making money on my crafts is extremely difficult to do unless you are able to tap into resources outside of your own shop. I have been trying and trying to make money at craft fairs and trunk shows over the last year or two, but have found that on my own, I am unable to draw enough customer base to create big sales. I get a mom or a grandma here and there that stop and decide to buy a necklace or a bookmark, but I am unable to attract high sales or traffic at my shop. I was naive enough in the beginning to believe that lots of little sales would add up and make it worth all the work, but I have now realized that things are more complicated than that.

Overhead is one problem to that equation. I never thought to consider how much money goes into paying for gas to go to the craft store usually once a day and to specialty shops across the valley at least 1-2 times per week. Gas is not cheap and I have found that with my busy and most productive weeks, I go through two tanks of gas and a lot of fast food to keep my girls happy in the car. Other overhead to consider is the extra utilities that I use during each day to power all of my equipment and keep me in the light at night. I am using the washer and dryer a lot while constructing my clothing pieces (pre-wash) and have other electronics and appliances running constantly to keep the girls preoccupied and happy while I work. Phoenix is not a cheap place to pay for electricity during the summers!

Keeping a large stock of already made merchandise is also a must when preparing to do craft shows or selling online, but the problem is that if you aren't able to sell any of your stock, then you're left with a bunch of cute items that are worth nothing. You lose all the money that you put into making the products and they are left in the closet collecting dust. The best solution I've found? Finding a store to feature your items. There are a couple of ways to go about this.

One is to consign. A lot of shops out there only allow consignment because they do not want to take the hit if your items don't sell. Consignment works by making an agreement with the shop choosing to feature your items. By allowing you to sell your items in their store, you must share a certain percentage of your sales. Although there is still the pressure of getting your items to sell, the marketing and traffic problem become much less pertinent because you are inside of an established store that has it's own clientele. You are pretty much piggybacking off of the store's advertising and success.

The second option for having a store feature your items is to sit down with the store owner and come up with a way for them to BUY your products from you at a discount and then resell them at a higher price. Although you will not make as much money off of each individual craft item, you are making up for it by moving a bulk of your items and securing a profit no matter what. You don't have to worry about your items not selling, because the owner of the store has bought them from you outright.

I have had the opportunity to sell my products through both consignment and selling up front to the owner. By far, I love selling them up front. I do not have to deal with unsold products lingering in my space and until I get my name out there and my profits pick up, I can't afford to not sell my things! Fortunately I have great friends and family who plug me to all their acquaintances, and through those simple acts, I have been able to find stores that are willing to do business with me.

I have items in a local favorite hotspot called Urban Baby Exchange in central phoenix that I sell on consignment, and have found a renowned shop in Pocatello, Idaho called Dellart Floral that has bought my watches outright. I hope for this to be the beginning to a successful business adventure!


  1. I love what you're doing. I am a business owner as well.

  2. I'm just getting into selling items that I find from estate sales, antique malls, and I have realized quickly that contacting shops and working out consignment or buying arrangements is the way to go. I'm trying Etsy as well due to the low fees and high traffic. Its good to know that I'm on the right track!


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