Home › Forums › Random Thoughts › Consignment sales
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simplicio.
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05/04/2018 at 3:54 am #39031
Hi,
I think there are some sellers here that make consignment sales. Could you please share what kind of arrangements do you have with the consignees and may I ask for some advice on this matter?TIA!
Sonia -
05/04/2018 at 8:13 am #39040
I don’t really like to do consignment, but I will do it as a favor for close friends. I came up with a consignment agreement because I didn’t want there to be any misunderstandings about the commission or the service I am providing.
Here is the meat of my agreement including my commission table. Note that this was not reviewed by an attorney and is not a legal document bla bla bla:
For items with a purchase price up to $100, commission is 50%
For items from $100.01 to $400, commission is 40%
For items from $400.01 and up, commission is 30%Commission is calculated after taking out fees and other costs. The following are fees that may be taken out of the purchase price before calculating the commission:
1. eBay’s final selling fee at the time of the sale: the fee is currently 9.15% for most items since I have a premium store subscription. Certain categories have a reduced fee (examples are certain consumer electronics, musical instruments, automotive tools), and I will adjust the percentage.
2. PayPal fee at the time of the sale: the fee is currently 2.9% + $0.30.
3. Cost of shipping if it is included the item price. Usually I price shipping as a separate cost.
4. An unusual sized box or specialized packaging materials if I need to buy it. Most of the time, I will have the boxes and packing material I need.
5. Repair costs or parts.
6. Extra shipping insurance for valuable items ($100 is included in Priority mail & FedEx).
7. We agree that payments for sold items will deposited automatically into my Paypal account.Listing costs are not deducted as they are included in my store subscription.
You agree to my setting the price of the item, which is based on what similar items have sold in the past. In general, the value of an item is what someone is willing to pay for it. eBay provides sold information for the previous three months. Right pricing is an art based on research, previous experience, and an innate feeling. If you have a minimum selling price, then please provide those amounts either via email or in writing when the item is provided and prior to listing.
You agree to bring me the items for sale as they will be stored by me. eBay rates sellers on many metrics including whether they ship on time or not. If I do not have the item in my possession, and I am not able to get to it right away, I could ship late, which affects my rating. Any exceptions to this term must be discussed and agreed to in writing ahead of time.
All sales will be tracked using a unique identifier that is not visible in the listing. You will be paid via check or through paypal (preferred) for the previous month’s sales within the first two weeks of the following month.
I allow a 30-day return window. If a customer decides to return an item, then the refunded money will come out of subsequent sales (or you will need to refund what I paid you after 4 weeks if it is not resold). The money will be returned when the item is sold again. In certain circumstances, the item may not be able to be resold, and, unfortunately, may result in a loss of money. This does not happen very often.
If an item is damaged in shipping, your payment may not be affected if it was insured. Many shipping services such as Priority mail and FedEx Ground have some insurance built in. The cost of shipping is not covered in the built-in insurance, so your payment will be reduced by your portion of that amount. Your portion means that we split the net cost based on the commission percentage.
Sometimes I purchase extra insurance for an item that is valuable or is sent via a non-insured service such as first class. In this case, the cost of shipping is part of the refund and your payment is not affected at all. Note that the cost of additional insurance, if needed, is deducted out of the purchase price before calculating the commission fee (as described above).
If an item is not that valuable (less than $30) and isn’t fragile, I will send it at risk. I am a very careful packer, but it is possible that I will have to refund the buyer the purchase price plus shipping. We will then have to “eat” the cost according to the commission fee schedule.
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05/04/2018 at 4:22 pm #39075
Hi Sharyn, that was incredibly helpful and detailed. I was just tinkering with the idea and thinking it should be hard to pull together and you came to show me I wasn’t overthinking.
Thanks for taking the time!
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05/05/2018 at 6:01 am #39093
Sharyn,
I would charge for the listing time. I pay my lister $4 per item. I would include that cost.
Mark
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05/04/2018 at 8:15 am #39041
I also attach a list of the steps I do to sell something on eBay. This was so that they understand all the work I am doing to get that commission.
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05/04/2018 at 10:23 am #39045
I sell (or try to sell in some cases) items for friends/family/co-workers etc. when they have something worthwhile.
I clearly let them know it takes time, and a lot of fees to sell an item on eBay – all the stuff we all know – and then tell them I would take 50% of the sale price (excluding shipping) to cover fees and pay myself a bit for my time.
The problem I have with people asking me to list/sell on eBay for them is that they have an inflated idea of what their item is worth. They will see someone asking $200 for something that really only sells for $20 and think they will be getting $200 for there item (which may be in worse condition).
In my opinion, some people are appreciative when you sell on their behalf and have reasonable expectations. Others are a pain in the … and it does cause some friction in the relationship.
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05/04/2018 at 4:22 pm #39076
Another great input. I can see all those hardships coming together so easily :)))
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05/06/2018 at 11:45 am #39132
Anonymous
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I tell them I deduct the costs for item research, listing, photography, answering buyers questions, picking, packing, standing in line at the post office, eBay listing fee, eBay selling fee, postage fees, box, packing, label and delay payment for 90 days and deduct 20% for income tax I have to pay .. THEN we can split what is left. I seldom finish my expense list and they say “FORGET IT”
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05/06/2018 at 12:01 pm #39136
We’ve spoken often to sell consignment items thinking it’d be easy money. Not true. Even 50% after fees is honestly worth the headache.
People want their items to sell quickly for big money. Unless its sold gold bars, why put yourself through the hassle?
There’s so much stuff you can scavenge and sell for yourself, keep all the profits, and have none of the hassle.
For those who do sell consignments, what’s the appeal?
–Not having to find stiff to sell?
–Wanting to help a family member or friends?
–The dream of easy money?
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05/06/2018 at 12:55 pm #39138
I only sell for friends and family members. I am doing it as a favor, which is why I have the commission percentages that I listed above. I put together a consignment agreement because I wanted the terms to be very clear. I do not actively go after commissions.
A friend of mine had some legos from her grown children plus some other stuff that she wanted to sell. After looking at what she had, I realized that she has much more than I can handle. I suggested an online auction company to her, and I will help her set that up. She may pay me a commission (depending on whether we do a seller managed sale or not), and I will add some of my larger items I don’t want to sell on eBay.
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05/06/2018 at 4:20 pm #39164
I can speak on this as I have done consignments for at least 13 years on a few occasions.
There is only one consignment deal I am going to continue, we have become friends, he picks good stuff, he is EASY, not a pain. When I am busy with my full time job and other stuff, he gets the picking done since he is fully retired. We share similar interests as well, so I’m not listing linens and skirts and glass, something that would be tough for me to do all the time. Now for the others.
I ran an ad on Craig’s once for consignment. It was OK, yet the guy was pretty much a pain, we ran out of stuff so it naturally ended.
I just finished up consignment for a friend of a friend, he had great stuff, was easy, yet his wife got involved and became a pain. Luckily, it naturally ended as we sold out.
Another business friend of my Wife’s was a great consignment deal for some time, yet I’m simply tired of consignments and stopped. There truly is plenty out there, and the freedom to control all aspects of your business is bliss compared to consignment. Changes in return policies, fee raises, and TRS discount drops have also reduced consignment bottom lines for me, and has complicated the process some.
I cleaned out a neighbors garage of what I love to sell about 2 years ago, it went rather quickly. He was REALLY laid back, it was a success with all items sold. He later tried to get me to sell some junk, so it spoiled the relationship a bit when I declined.
I sold for my son, sometimes we partner, we’ve done some great cache buying, yet he tends to require faster money than me. I have ceased selling for him because he is more than capable and needs to get his own side business going.
I have had no contracts, and none of my partners required anything in writing. Sometimes I sensed certain individuals wanted to see something on paper, and quickly lost interest in everything except the money I Handed over.
So, to sum it up, I do consignment with one person, going on at least 13 years. It accounts for maybe 20% of my business. I pick the stuff up, pay him, and give back anything not worthwhile from the last haul. We more or less split the fees, and do a 50/50. We exchange a couple of cigars, a cup of coffee, a bottle of wine, some banter, and part ways for a week or two or three. If I’m sizing up a big buyout and I’m short, he is right there with cash as well, like I said, it has become a friendship.
If I were to advise anyone, regardless of my moderate success, and counting the one current consignment worth keeping, I would still say do not do it. And if you are in the midst of one or more consignments, be totally honest with yourself if it is really a good thing. The money isn’t everything.-
05/06/2018 at 4:24 pm #39166
Do you partner with this long term consignment guy because you personally dont like scavenging? If you only make 50% after fees on his items, does he only give you items worth $100+?
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05/06/2018 at 5:04 pm #39171
Jay,
I like scavenging, love to in many cases. He has good connections with certain goods that I would have to pay much more for, or let alone even, resulting in a consistent pipeline for me in certain areas. He does not sweat returns, and let’s me slow dime or fast nickel as I see fit. Also, he scores big from time to time, and always has cash. I don’t just accept $100+ items. Sometimes I will go even as low as $40 if it is a cache of similar easy to list interesting items. If I was full time, I would not do the consignment, as I would have an abundance of time to scavenge for myself, broadening my offerings. I also have to mention that this man owns a very successful pizza joint in Chelsea, although not involved in day to day, residing full time in Fl. He is brilliant with business and pizza yet he cannot read a word, severe dyslexia! He wants to do eBay, has had his wife and sons help him, yet they are not scavenger minded, they screw it up. So that plays into it as well, where I am not tempted to say, “we don’t you just do it”. This partnership is not typical for more than a couple of reasons, it is not perfect, yet it works for me at this time. Keep hammering though if you see a crack here!-
05/06/2018 at 5:18 pm #39175
I see no issue if you like to the relationship. The older I get, the more obvious it is that our lives are enriched by good relationships wherever we find them.
To other people looking to do consignment, I only warn against selling items under $100, after fees etc, even 50% cut is only $40 for all the work you do. In that case, its just so much easier to scavenge your own goods.
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05/06/2018 at 5:28 pm #39178
There was actually a small store in my area that would list your items on ebay for you. It operated like a consignment store. I never went in there so I don’t know what the pricing was like. I just always imagined it was like that “ebay store” that was in the 40 year old virgin movie.
The store closed down around 2012. I would guess because by that time smart phones were coming online.
I also once saw a classified ad in my local weekly newspaper that said something like “looking for person to sell my collection on ebay.” The person didn’t list any details though such as what type of collection were they trying to sell.
I was tempted to call the number, but never did.
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05/06/2018 at 5:41 pm #39182
I agree completely, 100%. I’ve lived it!
The biggest deciding factor with my one lone remaining consignment relationship is the friendship that has evolved, and wanting to help, even if it is only really a hobby for this man. -
05/08/2018 at 12:49 am #39356
I used to do this with a local used goods shop. The deal was we’d agree on a base price + 10% commission and I took the items home, then came and paid 30 days after the sale.
I did ok with it and one of my first big sales was on commission. But ultimately, it’s harder to get stuff really cheap and I didn’t like the attention of “so, did that thing sell yet?” I still buy from that store but I just buy stuff outright. It’s mostly cheap enough that the cashflow aspect is minimal anyway.
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