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OT: Commissions for work being placed in a retail store

I'm opening a shop in May, probably more like June depending on how much prep work we need to do with the site, and we are thinking of having people provide quilted items to sell besides the fabric I will be selling. We are in a touristy spot and now think we need another draw into the store. Actually, my husband thinks this. So now he is giving me the task to find out what people are getting for commission on their works that they put out into local businesses to sell for them.

I'm thinking it is probably 10-15%. The creator sets the price and then I would add on an additional 10-15% above what the creator wants. Is that too low, too high. For those of you who put work on on commission in stores, did you sign an agreement of some sort?

And while on the topic, does anyone have a spreadsheet of sorts that would work to calculate the cost of creating a quilt for someone who comes off the street asking how much a quilt would cost if it was custom made for them? I just saw the tail end of Ginger's post but didn't find the original post so if I am duplicating a question, can someone direct me to the original post? Thanks.

Marilyn

Reply to
Marilyn
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Having been in retail for years, 10% is WAY too low. You can count on 2-3% just in credit card fees, and most people will pay with a card. You'll need to be able to talk up the item, it will take your employees time to sell it, it will take you time to track it for accounting, it will take up space you could be using for selling more profitable stuff (i.e. more profitable than

10%), and you'll have all the other costs associated with sales.

Art galleries that deal with fiber arts generally charge 25 - 40%. When we've sold home dec items on commission before, we've had commissions in the same range. In return, the gallery is expected to keep the item in good condition, insure it while it's in their possession, deal with all sales costs (including credit card fees, filing tax returns, etc.), etc.

What does your accountant say is typical for your area? And if he/she doesn't know, should you consider using someone more familiar with retail?

And yes, you absolutely, positively need a written agreement that spells out

*exactly* what you are and are not responsible for. If you ask over on Quilt Art, I'm sure someone there will share a sample agreement you could modify for your needs.
Reply to
Kathy Applebaum

We used to have a consignment shop here that had 2 pricing contracts. One the seller set the initial price & the shop added it's cut. Every month the item didn't sell the price dropped by a certain amount. If the item was still unsold at the end of the contract the seller was notified & if she didn't pick the item up in 30 days it was donated to Goodwill. The other contract for bigger ticket items the shop got a fixed amount per month for displaying the item plus a percentage if it sold- say $5/month display fee and 5% of the sale price, but the sale price didn't change. The seller paid, say, $15 up front for 3 months display. If the Item sold right away the store counted the 2nd & 3rd months payment as part of their percentage- so if the item sold for $300 their share was $15, ten of which came out of the display fee. This was almost 20 years ago, so the amounts may need to be changed for modern costs.

Jane in NE Ohio

Reply to
Jane Kay

Years ago, I used to sell smocked dresses at a shop in town. Had to sign an agreement that they were not responsible for loss or damage. I think their commission was around 20%. For most items, they marked the price down after

30 days, or you picked up your item. Because the dresses were a specialty item, they agreed not to mark the price down, and I also took orders through the shop, as many customers wanted a different size or colour. Good luck with consignments.....

Reply to
Susan Torrens

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