Why you should not work on consignment

Let me preface this by saying that this is by no means supposed to tell anyone what to do. My stance when approaching mentorships or any conversation is always: do what you feel is right for you. The below is a personal opinion based on real world experience I feel quite strongly about, but it remains an opinion. If you have had great experiences with consignment, great for you. It doesn’t invalidate the reasoning below. 

Here’s why I will never work on consignment. I have tried it - when I thought I needed to be everywhere and say yes to everything - and it never worked. I only have bad experiences (one included a group of people going to the police because we never got our work back and the person in question disappeared).

How Consignment Works

Most importantly, I am opposed to it in principle. Let me tell you why. 

Creating a business is risky. You plan, you research, you put money and time in something and do your best hoping it will work out. Sometimes it doesn’t. I know it because I have failed so I know how it feels.

When a shop opens and wants to sell pieces made by other artists (to which I say: great idea!), there is risk involved in that the pieces may not sell and you end up with a lot of unsold inventory.

So when a shop reaches out to an artist asking to sell their work on consignment, it is a way for the shop to outsource part of the risk of their business to the artists whose work they feature. I am not saying it’s done with malice - but it is essentially an offsetting of risk.

It typically goes like this: your work will be sent to the shop in question and they will promote it and sell it. The inventory is out of your hands and if they sell one of your pieces you will be charged a commission (around 20%-30% depending on the store and conditions). If the store is an online store, there may be differences in conditions but the principle remains more or less the same.

The Downsides

I have heard a few arguments as to why working on consignment will help with visibility even if it does not lead to sales. Sure in principle more people will see your brand out there. Maybe the physical store has good foot traffic. It can be a way to diversify income. 

However, I am not convinced by these arguments:

  1. Plain and simple: Most of the times, the economics are terrible. The commission you are paying will eat into your profit in a way that artists that typically accept to work on consignment are unprepared for and, if the store is online, you will likely not be able to increase the price of your work on their platform (this is often a policy, for obvious reasons). Some places, especially physical stores, will also require a monthly payment so you’re basically just renting a shelf.
  2. Visibility is very difficult to track: a store selling your products will not encourage people to shop directly with you.  As an artist you have no influence on how your work is presented and displayed. There are a lot of competing products and the space does not allow for premium brand presentation. The store of course will do promotion and marketing, but it will not necessarily transfer down to you. It’s like trickle down economics - see what I am saying?
  3. If you are an artist making things by hand, it will tie up inventory in a sale channel that may not work. If you have a ton of stock, you may not miss it being tied up, but that’s likely not the case. 

Final Thoughts

Diversifying your income is VERY VERY important. 

There are businesses out there that are happy to buy wholesale from artists. If you are pricing yourself correctly, selling wholesale can be a way to have access to other markets. You get paid upfront and can decide how long it will take you to complete your order.

As an artist you get to decide how you run your business. Fear of missing out is a dangerous thing in our sector: you see other people doing it so we get dragged into it even if it doesn’t pay off. I am a big proponent of writing things down in excel sheets. Calculate your margins and make decisions based on what makes sense and what is profitable. We all need to weigh risks and benefits. I don’t think that offsetting risks to artists is the way to go.