Dear Design Doctor
I need some advice about ‘Sale or Return’.
I currently have some of my bags on sale in an independent boutique who will be taking a commission on goods sold. They will not take any responsibility on any damages caused by customers viewing the goods. I was a bit uneasy about this but still went ahead.
Yes, I am aware that if anything happens to my goods that I would loose out.
Do you know if I should have some sort of insurance cover to protect myself against any loss or damage? I feel that it is very difficult for a small craft businesses to get a footing into retail without taking any risk.
‘Sale or return’ or ‘in consignment’ is done mostly by galleries whereby the designer maker provides products or stock for nothing, the gallery will showcase the work, and the designer maker will get paid when they sell.
The main issue here is that most of the (financial) risk is with you as the designer maker.
You have invested time and money into making the pieces, and there is no guarantee that your work is sold or even safe.
On the other hand, if you select the right gallery to work with then you get some exposure (which is better than sitting in your attic!) and even sales.
In your particular case, I would be really careful with a boutique taking on your work who doesn’t want to take any responsibility for damage or loss. What if they would be stolen? Any product handled by clients or staff might get damaged?
You seriously need to consider how to protect your work for example to have one bag on display and available for handling, and to keep the others in stock wrapped up only to be taken out if somebody is seriously interested. I am concerned that the boutique doesn’t want to take any responsibility, and I doubt very much that any insurance company would cover this.
To make ‘sale or return’ work for YOU:
I do think that Sale or Return can be very useful, especially for new designers and makers, but you need to manage it:
1. Use Sale-or-Return to your advantage
Sale-or-Return can be a really great way to start building a relationship with a gallery, especially if you are a new designer maker it can be that crucial foot in the door.
But I would only do Sale-Or-Return if your work is on the expensive side, more of a statement piece than a commercial item, and if it is for a special exhibition. For example a pair of earrings selling at £24,- are NOT sale-or-return items, the gallery should purchase commercial products like that.
Sale-or-Return can work well for new makers and to try a gallery out. But if you have been in business for more than three years you really need to start negotiating better to get (at least part of your) products purchased by the gallery. Also if you have been selling for more than a year with a gallery start discussing that you want them to purchase from you instead of working on a Sale-Or-Return basis.
2. Select the galleries you work with very carefully
Sale-or-return is strongly based on trust. Can you trust them?
How profitable are they? (Be extremely careful with galleries who are close to getting into administration, see below)
How will they be presenting your work?
How knowledgeable and interested are the staff?
Go and visit them (anonymously) and find out for yourself. Ask how the gallery will be promoting and showing your work when you are discussing the options to show and sell your work.
Ask around with your peers.
3. Have a written agreement
You will need a written agreement and include your terms & conditions: How many pieces, for how long will they stay, when and how will you get paid, are they insured, what happens when work is damaged or stolen (see reader’s comment below!).
Make sure that you create a Sale-or-Return Record or Consignment Note, which is a form that you create whereby the gallery acknowledges that they have taken your work on a sale-or-return basis.
Make two copies, get them signed by yourself and the gallery owner, and keep one for your own records. Make sure this form is dated, state the retailer’s name, quantities of each item, description and price of each item.
Include also the following two sentences (which will ensure that you can recover the work if it is unsold or if the gallery goes out of business, which is extremely important in the current economic climate!):
‘Supplied on consignment – The maker remains owner of the work until sold and the maker is paid in full’, and include the sentence ‘(name of gallery) shall reimburse the maker (xx) for any loss or damage to the goods from whatever cause while in their possession.’
This will also cover any potential problems when work is damaged or stolen.
4. Stay regularly in contact with the gallery
Make sure that you manage any Sale or Return projects. Stay regularly in touch (every four weeks or so) to check if the work has been sold.
Try to visit some time to see how the work is presented. Get some feedback from the gallery staff on your work. What kind of work sells well? Have a conversation, as this kind of market research is essential to develop your new collections.
If work has been sold, send an invoice immediately for the right product and amount, and make a note on your own Sale-Or-Return Record.
Make sure that you move stock regularly around.
Keep a list of the amounts of stock outstanding. I recently worked with a jeweller who was very heavily in debt. When we started to check (as she hadn’t kept any records!) what was outstanding in various galleries it turned out that she had stock of more than £50,000 in various galleries. We collected all the jewellery and sold half of the work, which cleared much of her debts. (She was lucky as the gold price had increased dramatically.)
5. Negotiate before accepting Sale-Or-Return
What extra promotion can they do? For example present your work in the shop window, do a press release with local press, have a small exhibition.
Could they at least buy some of your products outright?
Could they decrease the markup on the Sale-Or-Return items? Then your wholesale price to them can increase, and you make a bit more money that way.
If selling now would be successful, can next time the work be sold?
Once you have been going for a while and become more successful in selling it becomes easier to negotiate a better deal.
6: Stay on top of any Sale-Or-Return contract
This is my main tip:
Stay alert, keep an eye on your work and be pro-active in helping the gallery sell your work in the best possible way.
If you take yourself seriously, then the gallery will too.
What are your positive or negative experience with Sale or Return? Are you a gallery who works with Sale or Return and want to share your side? Please add your comments or additional tips below.