Selling on Consignment: Protect Yourself

Do not forget Rule #1, 'protect yourself'. Nobody else cares about your interests. It might seem like they care, they may pay lip service to your needs but the main concern of the shop owner is the success of their business. Nothing else matters to them. That is why it is imperative to make sure all terms and conditions are written down and agreed to by both parties. Each of you should have a signed and dated copy of the contract before any of your product goes into the shop.

What should the contract cover?

• Sales percentage - how much each party receives when an item is sold
• Any other charges, like an administrative fee or rental space, to be deducted, if any
• When payment for items sold will be paid to the seller (monthly/quarterly)
• Which party determines the selling price of the products offered
• Inventory tracking system and reporting method
• Proof of insurance and guarantee that your products are included in the coverage against fire and theft
• Minimum/maximum time period products must or will be in the shop
• Notice required if either party wants to remove the products from the shop, for whatever reason

Once all the terms and conditions are negotiated and agreed to, the contract is signed, then you are ready to go. See the next installment in the series that will discuss 'what comes next'.

The next article in the series can be found here.