We have a local landscaper wanting to put our plants in his nursery on consignment. What do you suggest the percentage be? Does anyone else do this? Is it profitable? Would you recommend it?
We were thinking 75%us/25%them.
We are a retailer so this is new for us. So any help would be appreciated. Thanks
i would think 15% is enough for them, unless you take care of the product you are going to have losses!
I would never work on consignment with a perishable product. Are you willing to take back product that is not taken care of and looks crummy, is burnt or looks like it hasn't been fed in weeks? Are you willing to re-grow poor quality returns and trim back product that may have gotten too large? I would give him a cut and sell outright to him at "wholesale' and be done with it. People are more responsible with perishables if they have paid for it with their own money. If it belongs to someone else they tend to slack off knowing they have nothing invested. :)
Michael's on track here. You would be just like a wholesaler selling to the big box stores for pay by scan. If they want it enough they'll be more then glad to pay for it.8)
As Michael and Eric have said Consignment is a path to disappointment and frustration, offer wholesale and low minimums to them instead.
Been there done that never again. We are a very small start-up greenhouse. Our retail location is my backyard. I thought I could sell my inventory to other small retailers on consignment. I reasoned that other small businesses would be willing to give us a shot if their losses could be non existent. I delivered beautiful plants and the agreement was that the retailer would pay for product that they sold or killed. You would not believe the amount of discussion that can be had about weather a particular plant is truly dead.
Consigment or as we noow call it vendor maanged inventories can work if you apply the right business rules and work with honorable customers.
You should have input in to determing the retail sell prices
You have a trained merchadiser who visits the store several times a week for the express purpose of dispalying , cleaning and watering your merchandise
You should get daily reports on what's selling provided by your cusotmer's, if not your working blind
You should get paid weekly
Your price should include a loss factor of 20% to 25%, if your losses are higher than that then you either have products the public does not want or they are not well maintained at the point of purchase
The retailer should recive 25% to 30% for providing the retail trafffic and colllecting the money