Most sellers remain on the prowl for new and enticing goods to sell. If you’ve built your online selling strategy around unique collectibles or compelling curiosities, yet wonder if you can maintain a profit-bearing inventory, why not consider selling other folks’ goods?
This is akin to mining garage sales and flea markets for inventory. Sellers can strike up relationships with friends, neighbors and whoever else has plenty of good stuff to unload but lacks the skill or motivation to market it online, by offering to sell the goods for them and share in the profits.
Often, the folks who own the stuff would love to turn their trash into treasure, hearing how so many others have already done so, but they’d prefer if someone else would manage the work for them, offering a cut of the earnings for the trouble. So emerges your inventory opportunity, consignment style. Here’s how you can grow your inventory of goods through development of a home-grown consignment service.
Consign to keep inventory levels level
Ask any online seller who actively sells items for other people why consignment can be a profitable path to maintain revenues, and they’ll likely give you plenty of reasons. In a nutshell, here’s what consignment selling can do for you: Selling on consignment allows you to explore the sales potential for goods you might otherwise not have handled
- Relieve your stress of running out of inventory. When you gain access to other folks’ goods, you’ll likely have more inventory to choose from than ever before.
- Save you time and money by altering how you source inventory. When you offer a consignment service to sell other people’s items, they’ll often bring it to you rather than you having to go get it yourself.
- Reduce your risk as you utilize the consignment inventory to exploring selling different goods and catering to a different audience of potential buyers. And, if something doesn’t sell, you merely return it to the original owner without taking a loss in inventory investment.
- Minimize the cost and coordination that comes with managing a full inventory of goods. When you sell on consignment basis, you manage only the items you’re selling at the moment, letting the other goods remain with the original owner.
- Develop a completely objective attitude toward the items you’ll offer for sell. When you don’t have emotional ties to the items you’re selling—which is a common bugaboo to collectors turned sellers—you can offer goods with business-focused impartiality.
As you can see, selling on a consignment basis brings additional benefits beyond just the inventory itself, and allows you to explore the sales potential for goods you might otherwise not have handled.
Establish your value proposition as a consignee
When you decide to become a consignee for the selling of other peoples’ goods, you need to provide your statement of value to the owner of the goods. That is, you should be prepared to let the owner of the goods know why you’re the person who can sell their items for them and for their benefit. Consider developing a list of benefits, such as the following:
- You’ll provide a reliable review and appraisal of the items you’ll put up for sale on the owner’s behalf. Many folks stumble at this important first step; offer to manage that for them as well as set their expectation based upon current market value of an item.
- You’ll properly photograph and develop a compelling description for the items that will be offered for sale.
- You’ll launch auctions or fixed-price listings, depending upon the client’s wants and the market’s best potential for the items.
- You’ll actively monitor the listings and will field all potential buyers’ inquiries.
- You’ll promptly go about collecting payment from buyers, and will package and ship the sold items.
- You’ll deliver the agreed-upon profit split to the consignor (owner of the goods).
- You’ll provide an on-going consultation and assessment for additional items to be offered for sale.
You’ll need to decide for yourself how much you should charge for your services and online selling expertise
When you become a consignee entrusted to sell another person’s goods, you step into a slightly different dimension of online selling. Not only are you managing the online sales and delivery process, but you’re also managing a consignor client. In this regard, you’re providing a valuable service to help an individual sell their items. And, as you can see from the preceding list of services you’ll provide, you’ll manage the time-consuming work for your client.
The matter of your consignment fee
In the world of consignment selling, establishing consignment fees is sometimes as market-volatile as the value of the goods you’ll sell. In other words, it’s not an exact science, and you’ll need to decide for yourself how much you should charge for your services and online selling expertise. But, to get you started, consider this fee structure as an initial foundation from which to work:
- Collect all site listing fees where you’ll offer the items for sale (and work with the consignor to discuss which fees are useful and which can be avoided to improve the profit to both of you).
- Establish a flat-rate fee charged for each item to cover your sales services (anywhere from $5 to $15 per item seems to be the norm, but it can be adjusted based on the value of an item or the volume of inventory you’ll sell). Be clear that you’ll collect this fee even if the item does not sell.
- Collect a portion of the final selling price, usually between 20 percent and 40 percent, often dependent upon the item’s final selling price.
These are merely starting points, and you should actively and continually research what other consignment sellers are charging. It’s important to remember that you could eventually be competing with other consignors, so you’ll need to try to establish a competitive pricing structure that will attract clients, especially when word of mouth about your good results and fair rates begins to spread.