With wholesale, a shop buys your products up front, usually at about half of retail, and the risk of selling them becomes theirs. With consignment, you lend the shop your stock and get paid a share only when something sells. For a new brand, consignment is often the easier way in, and wholesale is the better business once your product has proved itself. Which one is right depends on your cash, your margins and the fees, so do the math for each shop.
I've bought both ways for my own shop. Here's how each works from behind the counter, and what real shops publish about their terms.
How does wholesale work?
The shop places an order at your wholesale price, you ship it, and you get paid on your invoice terms. After that, the stock belongs to the shop. If it sells, it reorders. If it doesn't, that's the shop's problem, which is exactly why shops are pickier about wholesale.
Pricing usually works on keystone: the shop sells at roughly double what it paid you. So a candle with a $40 MSRP wholesales for about $20. Before you pitch, make sure $20 still covers your materials, labor, packaging and a profit. The wholesale price calculator works it out from your costs.
Wholesale shops will want a line sheet with wholesale prices and minimums. The OMCA Store (Oakland Museum of California), for example, asks for "retail and wholesale prices, and your minimum order." If you don't have one, start with the line sheet template.
How does consignment work?
You bring or ship stock to the shop, it sits on the shelf at a price you agree on, and when it sells, the shop pays you your share. Usually that's monthly. Unsold stock is still yours, so you'll need to collect or restock it.
The split is set by the shop, and many publish it. Some real examples from Open Shelf listings:
- Paperish Mess (Chicago): "Consignment: 50/50 split, sales reports and payments monthly"
- Experiment PDX (Portland): "Consignment: 60% to the artist, 40% to the shop (gift shop)"
- Parker + Scott (Austin): "consignment typically 60/40 in the consignor's favor, paid monthly by ACH"
- HereAfter (Denton, TX): "Consignment, split 70/30 (vendor keeps 70%)"
Of the 434 shops Open Shelf lists, 91 publish a split. The most common are 50% and 60% to the maker (30 shops each).
Which do boutiques actually prefer?
It varies by shop, which is why it pays to read the terms first. Going by the buying model each listing states, 125 shops are consignment, 75 are wholesale, and 29 do both. The other 205 don't say, and leave it for the conversation.
Shops that do both often use consignment as a trial. The WonderMart in Brooklyn says it prefers "to start on consignment; some local brands are bought wholesale via Faire." Paloma Consignment in Austin offers "Wholesale (bought outright) or consignment: maker earns 50% of the sale price." Fern and Skye in Denver runs consignment at a "50/50 split, monthly payouts; wholesale also considered."
Browse consignment shops for makers or shops that buy wholesale, or look at a city like Austin, where Paloma Consignment and Parker + Scott both offer either.
What fees should I watch for?
This is the part new brands skip, and it's the part that matters most. Some consignment arrangements are free. Others charge rent, a monthly fee or an up-front package on top of the split. 50 listings on Open Shelf are flagged as paid programs (rental or paid consignment).
Some are free and say so:
- Rue Saint Paul (Brooklyn): "No cost; brands get 60% of sales, paid monthly."
- Fern and Skye (Denver): "No upfront costs, rent or monthly fees."
- Paloma Consignment (Austin): "No upfront cost for consignment."
Some charge fees, and you should count them:
- The WonderMart (Brooklyn): "Brand Partner Fee of $35/month, billed separately (not deducted from payouts), plus a 50% commission on sales."
- Modern Mouse (Alameda, CA): "60/40 with no fees, or 50/50 with a $10 monthly fee."
- South Pas Vintage (South Pasadena, CA): artist tables are "$0/month rent + 30% commission on sales, with a $100/month sales minimum."
- Vroman's Bookstore (Pasadena, for authors): a "$298 paid by the author up front (8 copies for 90 days); Vroman's pays 55% of sales."
- Flying Solo (New York): the brand receives 85% of the retail price for items sold, plus a "Monthly membership fee on top of the split: $3,500/month for clothing, $2,500/month for jewelry & accessories."
A high split can still lose money if the fee is big. Flying Solo pays 85% of retail, but on the clothing program you'd need to clear $3,500 a month in payouts before you've made anything. A 50/50 shop with no fee might leave you better off. The calculator's consignment section lets you load several of these published splits and fees, including Flying Solo's, so you can compare.
How do I compare the two for my product?
Take one product and run it both ways. Say the MSRP is $40.
- Wholesale at keystone: you get $20 per unit, paid on the order, whether or not it sells.
- Consignment at 60% to you, no fees: you get $24 per unit, but only when it sells, and only after the payout date.
- Consignment at 50% plus a $35 monthly fee: you get $20 per unit sold, minus $35 a month. Sell two a month and you're at $5 for the month.
Then ask:
- Can I afford to wait? Consignment ties up your stock and cash until things sell.
- Can I afford the stock? Wholesale means producing and shipping a full order at your wholesale price.
- Does the fee pay off at a realistic sales pace? Be honest about how many units a small shop will move in a month.
- Who handles restocking and unsold goods? HereAfter, for example, has vendors "control their own display and stock."
So which should a new brand choose?
From my side of the counter: if you're brand new, with no stockists yet, a fair, no-fee consignment shop is a sensible place to learn what sells and at what price. Once you have sell-through to point to, pitch wholesale. It's steadier money, and a shop that has paid for your stock has a reason to sell it.
Either way, say on your line sheet which terms you offer. It saves a round of emails, and buyers notice.
FAQ
Is consignment bad for brands?
No, as long as the split is fair and the fees are clear. Shops like Rue Saint Paul publish "No cost; brands get 60% of sales, paid monthly." Be careful with paid programs, and count the fee.
What's a typical consignment split?
Among the 91 Open Shelf listings that publish one, 50% and 60% to the maker are the most common (30 shops each). Some go higher, like HereAfter's 70/30.
What's a typical wholesale price?
About half of retail (keystone), so the shop can double it. Check your margin with the wholesale price calculator.
Can I offer both?
Yes, and many shops accept both. Put your terms on your line sheet so the buyer knows up front.
How do I know if a shop charges fees?
Read its submission page. Open Shelf listings note published fees, like The WonderMart's $35/month Brand Partner Fee plus a 50% commission.