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Hello,
I need some advice please.
I am opening studio in a month, and will be doing some retail sales of items, but some of the teachers that will be renting space from me would like to put up their items for sale (very different than what I will offer, I tend to specialize in Tribal, or beginners types items like zills and practice hip scarves). I would like to give these teachers the opportunities to offer a sampling of their items by letting them display a ‘showroom” (perhaps a display case of examples) and then have the customers deal with the instructors instead of me being a middle person. At least I think that is what I want to do; consignment sounds like a lot more work and bookkeeping for me and I have enough going on already.
So, how do I charge for this service? They are using space that I provide, and could be used for my own retail so I think it fair to charge a fee for this service. Or is that not the way this type of arrangement goes??
Your suggestions are appreciated!
Joyce
I need some advice please.
I am opening studio in a month, and will be doing some retail sales of items, but some of the teachers that will be renting space from me would like to put up their items for sale (very different than what I will offer, I tend to specialize in Tribal, or beginners types items like zills and practice hip scarves). I would like to give these teachers the opportunities to offer a sampling of their items by letting them display a ‘showroom” (perhaps a display case of examples) and then have the customers deal with the instructors instead of me being a middle person. At least I think that is what I want to do; consignment sounds like a lot more work and bookkeeping for me and I have enough going on already.
So, how do I charge for this service? They are using space that I provide, and could be used for my own retail so I think it fair to charge a fee for this service. Or is that not the way this type of arrangement goes??
Your suggestions are appreciated!
Joyce
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Alaska
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good thinking...
Sun, August 2, 2009 - 7:50 AMYou show wisdom in your cautious approach. Your studio will be seen as a resource by many people with something to sell. In the past we have had teachers and friends just drop things on tables or hang their merchandise on the studio coat racks and expect us to inventory it, deal with it, promote it and then pay them. When we had to move to new studio, we developed a much more structured approach.
Display case of examples seems like a great way to start. Have the teachers label each item with a product id, their contact info, and the price. And don't forget to charge them a bit to pay for the display case!
In KY, dance classes are not subject to sales tax but costume items are. So if you do get into consignment, check the sales tax situation. -
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Re: good thinking...
Sun, August 2, 2009 - 9:39 AMJoyce...
The biggest issue with consignment is the space that it takes up as well as the risk of loss of an item. Many consignment shops work on a percentage fee base where the split is anywhere from 70/30 to 50/50 with a reduction in the price of the item over time to move the goods out. Some shops charge a base fee so they are covered in the event the item doesn't sell or they keep the goods permanently so as not to suffer any loss. The process is complicated and involves sometimes lengthy contracts with specifics in the event an item is damaged or stolen.
If you want to make the process simple on yourself, charge a flat fee for a specific period of time and make sure you are not held responsibility for the items. If these items don't sell then they are removed and replaced or the length of time is extended with a new fee. Be specific about the amount of items, the way they are set up in regards to appearance as it is a reflection on your studio, the type of items and the owner's responsibilities. Make sure your insurance covers the items ( or someone's does, because you don't want to be responsible in the event of fire or natural disaster. theft and so on...).
I have a friend who owns a rather large shop and I can send you a copy of the contract she uses if you like. The laws in our state may differ for these types of transaction then where you are though. I would make sure I get someone knowledgable involved for your own protection.
I know it still seems like alot ( and don't let it discourage you as I think its a great idea!) but you want to cover your butt and keep your stress level to a minimum while ensuring a good working relationship with the community and your clientele. -
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Re: good thinking...
Mon, August 10, 2009 - 3:13 AMAnne's post got me thinking about how many consignment-ish shops do things these days - many will flat out purchase items they think they can sell and give out a store credit to the seller. Just an idea - probably more hassle & paperwork than you'd prefer to deal with...but if you keep their balance on a biz card they have to keep (and if they lose it...so sorry) it might be worth it. Some folks might be interested in that.
I will echo the others and definitely recommend you charge for display space - because if you're displaying someone else's stuff, it's less room for you to display yours.
Let us know what you decide to do!
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Re: Handling consignment vs "showroom" merchandise?
Fri, August 7, 2009 - 5:06 PMIf you are paying the rent, and could use the space for your own stuff, it would be foolish for you to let someone else use it for free. So definitely charge a display/space fee.
People forget or misunderstand things, a written contract will not forget and will provide clarification. So put everything in writing.
Make sure the vendors using your space sign a waiver of liability, just in case something happens to their stuff when it's in your space.
Retain the right to final say on the appearance of the vendors displays, the right to ask them to remove "stale" stuff that isn't selling AND keys to any and all display cases.
Specify when the vendors can access their displays, for example, any time during normal studio hours or by appointment at YOUR convenience (not theirs)
What happens if someone wants to buy an item, and the vendor is not there to sell it? If you will handle the sale, charge a fee for that. If you will not be doing any sales, insist the vendors leave you a good supply of business cards, so the potential buyer can simply pick up a card. Otherwise, you'll find yourself writing down the vendor info over and over and over again
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Re: Handling consignment vs "showroom" merchandise?
Wed, August 19, 2009 - 11:21 PMI have decided that to start, I am just going to charge 'rental space' for outside sales and not deal with consignment. Therefore, we will utilize a flat fee per month for certain display spaces at the Studio.
My studio is just over 1700 square feet, including a newly installed 24’x 26’ dance floor and a changing area. In the front ‘lobby’ area I have a locking cabinet to display smaller items (jewelry, zills, etc), and have 3 retail clothing racks.
$20 per month for a 8.5 x 14 tray in the display case. Seller provides the tray.
$30 per month for one arm of a clothing rack (could hold up to 10 items if they are squished). Seller provides hangers.
Items can be switched out at any time (all sellers are teachers that will have keys to Studio), including adding new inventory, or rotating of items that are not selling.
All items must be clearly labeled with price, and how to make payment (e.g. checks made out to XYZ) as well as provide business cards or other portable means of contacting seller for questions.
This is what I think is fair. What do you all think??
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Re: Handling consignment vs "showroom" merchandise?
Wed, August 19, 2009 - 11:26 PMI think Iposted this once but it is not showing up. Sorry for double posting if it is a tribe glitch!
I have decided that to start, I am just going to charge 'rental space' for outside sales and not deal with consignment. Therefore, we will utilize a flat fee per month for certain display spaces at the Studio.
My studio is just over 1700 square feet, including a newly installed 24’x 26’ dance floor and a changing area. In the front ‘lobby’ area I have a locking cabinet to display smaller items (jewelry, zills, etc), and have 3 retail clothing racks.
$20 per month for a 8.5 x 14 tray in the display case. Seller provides the tray.
$30 per month for one arm of a clothing rack (could hold up to 10 items if they are squished). Seller provides hangers.
Items can be switched out at any time (all sellers are teachers that will have keys to Studio), including adding new inventory, or rotating of items that are not selling.
All items must be clearly labeled with price, and how to make payment (e.g. checks made out to XYZ) as well as provide business cards or other portable means of contacting seller for questions.
This is what I think is fair. What do you all think??
