Wholesale or Consignment

By Jean Campbell, Exclusively for Fire Mountain Gems and Beads

What's the difference between selling jewelry wholesale versus selling on consignment?

Jean Campbell, founding editor of Beadwork magazine explains:

When you sell your jewelry wholesale, you sell it outright to a shop owner. They usually buy it from you for 50% of what they will sell it for, and often take orders for more of the same if your work is selling well for them. When you sell your jewelry on consignment, you agree to lend a shop owner your work with the expectation that they will sell it, but they have no up-front financial investment. Once the consigned work is sold, the owner gives you a percentage of the profits--usually 60% or more.

What are the advantages of wholesale vs. consignment?

The advantage of selling your jewelry wholesale is that you get your money right there and then. It's a done deal with no fuzzy edges. And, because the shop has put money down, it's in their interest to push your work to sell--they will display it attractively and price it to sell. Also, if your work sells well, it's to the shop owner's advantage to order more of your work, so you'll both earn more money. The downside to selling wholesale is that you'll most likely receive a lower profit percentage than if you sold it on consignment.

Unlike a shop who has bought your work wholesale, a shop who takes jewelry on consignment doesn't have any financial investment in the pieces other than providing the square footage to display it. Because of this, they can charge slightly more for it because they aren't rushing to return their investment. They can wait for the right customer to come along. The downside is, if the shop isn't feeling an urgency to sell your work, they may not push it too hard. Another disadvantage is that your work can often sit in the shop for a long time before it's sold (or not sold), so your own financial investment (materials and labor) isn't turning a profit for you as quickly as you might like.

How do I know if I should be an on-consignment vendor or a wholesale one?

Consigning is good if you don't have production pieces, but just a few really high-art or expensive pieces. This way you can wait to find the right customer who will pay more for what you're selling. Also, if you're just dabbling in all of this, on-consignment sales can give you a no-commitment flavor of how your work might sell to the public while you consider selling it wholesale down the road.

Wholesale works well if you've road-tested your work and know it will fly out a shop's door. To create a thriving wholesale jewelry business, you need to make a commitment to produce pieces in volume, fulfill new orders, and constantly market the work to your clients.

Customer Comments

Email Campaigns/Comments We would like to share some of the customer comments we received in response to the article, "Wholesale or Consignment," featured in a newsletter. Please keep in mind that the comments expressed below are those of our customers and do not reflect the views of Fire Mountain Gems and Beads.

"I enjoyed the article regarding consignment or wholesale. I'm considering selling my jewelry and have to weigh these options. Thank You,"
- Dana

"You left out an important market--selling it directly to the customer, which is what we have been doing. We could certainly use ideas on that."
- Carol

"Regarding the article on whether to sell on consignment or wholesale...I do both. When I sell on consignment, however, I establish the selling price to the customer. That way I can be assured that it's not too steep and my jewelry will be more apt to "move"."
- Marietta

"I finished reading Jean Campbell's article on wholesale versus consignment. While the article had good points, I have to disagree with a few points. Customers who purchase wholesale generally need a 60% margin, not 50%. The 50% is referred to as "keystone" and is a good starting point but most retailers can't survive anymore with 50%, they will need to mark up by more such that if you sell for $4, they sell for $10. Conversely, most consignment is 50%. The percentages in the article were true years ago but not now. For consignments, if they need less, be suspicious! (unless it is a non-profit) and MAKE SURE you have a signed contract that details who pays for the theft losses, breakage, and any shipping costs. The main difference between the two is not just when you get paid, it is how willing they are to test your products in their store. If your products are not selling and it's consignment, you will get it back since they value their shelf space (they are motivated for sales). If wholesale, they may not even be willing to try you since they have a harder return issue."
- Jamie

"I thought that the article consignment vs. wholesale was very informative and gave a lot of information on the benefits or problems with each. It was well-written and easy to understand."
- Linda

"The article on selling wholesale or consignment was very helpful to me. I have been thinking about selling my jewelry now I know which way to sell it."
- Diana

"Just finished the article on wholesale/consignment by Jean Campbell. This was a very informative article at this time because I am in this situation. I have sold a lot of my work by word of mouth and has went very well.I am debating on the wholesale/consignment issue now. Thank you for this article, it came at a very good time for me."
- Christy

"I thought the advice on wholesale selling or consignment was excellent advice. I have sold some both ways. Some consignment shops aren't in a hurry to pay you...very frustrating. I was part owner in a consignment shop and we did a great job for our artisans, but I haven't had such luck selling my items on consignment to other shops, therefore, I prefer wholesale."
- Sheryl

"Great article since I am asking myself the same questions about beginning a business selling my jewelry. Jean Campbell is a great one to have on your panel of experts!"
- Chris

"This little blog was a nice quick explanation of how, when and why to start selling. I'm sure this will help a lot of designers to make that next step."
- Salena

"I like the article Wholesale or Consignment? It is something to think about. I have just started selling at craft shows and online but have stayed away from stores. I may think more about the consignment - it may be a new outlet for me. I hate making the same thing over and over. "
- Susan

"Comment on article wholesale/consignment: the author should have included one more line about consignment: the risk of loss/"have the agreement in writing!" I lost some consignment pieces (fortunately of low value) when my "friend's" shop went bankrupt overnight and I had only a handshake deal. Otherwise, an excellent article."
- Jennifer

"Article on consignment or wholesale was critically good!"
- Leigh

"Regarding the wholesale/consignment article: while overall very good, I have been doing consignment for a number of years, and it is very rare to receive anything more than 50%. The article suggests 60% or more. Just an FYI; and oh how I would love to receive 60%, but alas, that's really not realistic with consignment these days."
- Missy

"Article on Retail or Consignment was very helpful...short and right to the point...I think I'll be reading more of the articles!"
- Shannon