Is Consignment Worth it for a Small Startup Designer?

Is Consignment Worth it for a Small Startup Designer? Fashion Consultant Christine DeAngelo Daal

As a startup designer, a common issue is getting stores to place a buy with you.  Often times boutiques are reluctant to take a chance on a new designer in fear of something going wrong, whether it’s late shipments or horrible sell through or worse!  So instead many retailers are now offering consignment only.  

What is Consignment? 

First, let’s define what consignment is.  According to Wikipedia, Consignment is…. the act of consigning, the act of giving over to another person or agent’s charge, custody or care any material or goods but retaining legal ownership until the material or goods are sold.

Sounds all good right?  Or maybe not?…..

Find out in our Live Q&A session!

Watch it now then let us know your thoughts below!  Tell us about your experience selling consignment and how it worked or didn’t work for you!

1. Do I need to go to fashion school to be a designer?

So our first question comes from Amy who asks, do I need to go to fashion school to be a designer?  I get this question all the time and it is a really great question. My answer kind of depends on what your goals and objectives are.  If your goal is to work for another company and become a famous fashion designer working for someone else then yes, I definitely would suggest going to a fashion school, I think it would be the best route for you.  It is very hard to get a job in the industry if you do not have fashion school experience.  However, if your purpose is to become a famous fashion designer and start your own fashion company and start your own fashion line, then my answer is not necessarily.  While I did go to a great school, (I went to FIT and graduated with a Bachelor’s degree), I really learned most of what it takes to start your own fashion line with my experience in the industry.  So with people like me nowadays, with mentors and coaches out there that are willing to teach you and show you what they have done and really give you their experience, you do not really need to go to fashion school. I highly recommend working with a mentor or coach that can teach you and show you exactly what they have done to help you along the way.  I also recommend taking some classes here and there. Whether it is an online course or just watching YouTube videos. You can practically watch a YouTube video to learn how to do anything these days. When I went to fashion school, we did not have YouTube.  So great question Amy, and my answer really depends on what your goals are.

2. What e-commerce site do you recommend?

Our next question comes from Joe. Joe asks what e-commerce site do you recommend?  So, Joe, I recommend Shopify. It is the only one I know that has the ability to allow you to sell directly inside Facebook and Instagram without having to leave the actual app in order to purchase something. That is really key, especially in today’s market with the way the technology is going and the way that everyone is so addicted to social media.  The fewer steps that someone has to take to actually purchase your products, the better chance you have of actually selling more items.  So I prefer Shopify. They have great apps and tons of features, and it’s super easy and user-friendly for those non-techie types. I am not a very techie type and I can figure it out, so it is good.  There are also other ones like Squarespace, Wix, and BigCommerce, but again, I do not have experience with them, so I cannot speak for those. So I do recommend Shopify; that is my number one e-commerce platform.  That’s a great question, Joe.

3. Can I put made-to-order on my website?

So the next question comes from Jen. This is a unique question.  She asks, can I put made-to-order on my website?  So Jen that really depends on a couple of things. If you are doing let’s say bespoke or couture garments where you are literally making them one of a kind and you plan to make them to order, then yes, you can put made-to-order on your website. But if you are planning to just presell your items in an effort to try to get a sense ahead of time of how many orders you are going to be taking and how much you need to cut, then I would not put made-to-order, I would put “Will ship by” and then the date. So “Will ship by March” or “Will ship by August”.  That way you can actually presell your line on your website. It is a really really great way to get your orders ahead of time. When you are in the beginning stages of the startup, and you are trying to get those orders and trying to get things going, it’s a really great way to get a lot of sales and to consolidate all your orders together so that you can meet your minimums.  So I would put “Will ship by” and then the date, for eg. “Will ship by March”, “Will ship by September.” Typically four to six months out is the typical time that most people are accustomed to. I would also put an asterisk at the bottom that says “We will only cut if a certain number of pieces are ordered; we will only cut if 20 pieces are ordered or if 30 pieces are ordered or whatever your minimum order really is.  That way, the person knows that there is a small chance that the item that they want will not actually get made.  If you just put made to order, people are expecting that the item will actually be made to order and that if they order it, it is going to be made.  You literally cannot go back to them and say “Oh, I am sorry, I cannot make your order because not enough people ordered it“, or “we ran out of fabric“, or whatever the case may be. You’re literally locked in and you do not want an angry or upset customer.  So, if you put “Will ship by” and you put the asterisk at the bottom, people will know that there is a small chance that the item might not be ordered. That way if you do go back to them and say “Hey I am really sorry, we did not get enough orders on this piece, would you like a different piece instead,” they are somewhat already prepared and they’re in that mindset. Great question Jen.

4. Should I have a boutique buy items up-front or do consignment?

Okay, our next question comes from Jessica.  Should I have a boutique buy items up-front or do consignment?  

First, let’s define what consignment is.  According to Wikipedia, Consignment is…. the act of consigning, the act of giving over to another person or agent’s charge, custody or care any material or goods but retaining legal ownership until the material or goods are sold.

So please Jessica, do not do consignment. I see so many designers burned by doing consignment. It is not good. It is not in your favor. It is always in the store’s favor, so please, do not do consignment.  I do not recommend it.  For one, you are splitting the cost.  So for those of you who do not understand what consignment is, basically you are lending your pieces to the store and then once the item is sold, you are splitting the profit. The problem is, a lot of times when you split the profit, it is not a 50:50 split. It might be 60:40, so you are getting 40% and the store is getting 60%. Also, you have no control over whether the store puts the item on sale. So at the end of the day, you might actually make less than your wholesale price. Keep in mind, your wholesale price is literally the bare minimum that you need to make because you need to make double your cost in order to be profitable. A lot of times you won’t make the wholesale price, so I do not recommend doing consignments.  The other downside is if your items do not sell, they are going to be returned to you and most likely they are going to be damaged. There is likely to be makeup or deodorant stains, or items ripped or stretched out, so you have no control over the quality of your samples. The store does not really care about the quality of your samples, so it is really in the store’s favor and not in the designer’s favor to do consignments. I definitely recommend selling to the stores upfront and when you do get your orders from the stores, try to get a 50% deposit on a credit card. Get their credit card number, run their credit, charge the 50% and then charge the other 50% when you ship. That’s really the best way to do it and that’s how you are going to make the most money; you will be the most profitable and you will get the most amount of orders ahead of time that you can consolidate everything and really meet your minimum.  So hopefully Jessica that answers your question, great question though.

5. How do I contact buyers?  

The next question comes from Anam and he asks how do I contact buyers?  This is a great question and my answer to this is, you are going to do it very carefully and very methodically.  You need to have a strategy when you approach buyers, and it is good to understand that it could take 7 to 12 times of you approaching a buyer before they’ll even give you the time of day and actually look at your stuff.  So start having that mindset, knowing that this is a process; it is going to take a long time. Your goal is to get them to know you, like you and trust you. That is very important, the KLT factor, know like and trust. People want to do business with people that they know, like, and trust. Click To Tweet  So that is very important when you are approaching buyers.  Also, you want to make sure you are approaching buyers in the right season.  You want to use a variety of methods, such as email, mail, phone call and going there in person yourself. I actually teach a 12-step process on how to approach buyers in my Successful Sales Secrets Course. It’s an online course, 100% completely digital which you can take any time. It’s amazing. I give you email scripts, two different phone scripts, examples of what you could send in the mail, exactly everything is done for you, (templates, worksheets and cheat sheets on how to approach buyers and how to really get them to say “yes I want this stuff in my store”). I teach that and more in the online class.  But yes, it is a long process, and you want to be sure that you are saying the right things.  One thing you definitely do not want to say to a store buyer is “I just know my stuff is perfect for your store,” or, “I just know my line is perfect for your store.”  They hear this every day all day long and they are so sick of it.  You need to tell them why it is perfect for your store, who is your target customer, who do you hang with.  They specifically want to know prices and how much they are going to be able to make off of your stuff.  The stores are scared, they are afraid.  A lot of retail stores are going out of business, so it is really important that you have the mindset of a buyer and understand where they are coming from. Think of it in the way of how you can help them, how can you help them make money so that you can make money.  That’s the key.That’s the goal at the end of the day, that both of you can win and walk away with a really great relationship and future orders which would be amazing.  So that is the goal when you approach buyers.  If you are interested in the course to learn more you can sign up here. You definitely do not want to look desperate when you are approaching buyers, so having that confidence really really helps when you approach buyers.

6. Is it okay to collaborate with other designers on a pop-up shop?

Our last question comes from Desiree. Desiree asks, is it okay to collaborate with other designers on a pop-up shop?  So to answer this question is I would really need more information from you, Desiree. I would need to know what type of product you are producing and what the other designers are producing.  So for number one, you definitely do not want to do a pop-up shop with competitor designers; people that are in the same category, the same product as you. You do not want to compete with anybody at that pop-up shop. But at the same time, you want people that have the same price point, the same target customer, the same look, the same feel, the same vibe, the same style. If I am a wealthy woman in my 50’s, I am going to be purchasing a certain type of garment, a certain type of jewelry than if I am an 18-year-old girl in high school. You want to have the same target customer as these other designers that you are collaborating with.  That is really-really important. Let’s say you are doing high-end evening wear; you do not want someone that is doing costume jewelry, that is just not going to work. So definitely look at that.You also want to be really clear about where the pop-up shop is. How much foot traffic are they getting? What’s the vibe and the price point of the pop-up shop? What is the location like; is it easy to get to, is there parking, is it by the subway depending on where you are?  These are all really important things and you want to do your research. Do your homework ahead of time to really see what is going on and whether this is the right venue for you.  Also, even more important is when you are doing the pop-up shop. Are you doing it on a weekend, is that a holiday, what is the timeframe?  Is the store busy during that time? Is it going to be a sunny day when everyone decides to go to the beach and they are not shopping that day? All of these things play a huge role when you are doing pop-up shops. I talk about pop-up shops and how to do them in my sales course as well. If you are interested, you can go to Online Courses to sign up.

We will be doing these Facebook Lives inside the Fearless Fashionpreneur Group every week, so let me know if there is a certain topic you would like me to speak on. Let me know if you have any questions, you can ask Fashion Angel Warrior at #ASKFAW.  That is the hashtag to let me know your questions so that I can answer your questions for the next one. So, I will leave you with my favorite quote which is “Don’t do your best, just do whatever it takes.” Click To Tweet  It is very easy to say that you did your best; anybody could say that they did their best, but it is not very easy to say that you did whatever it takes.  So do whatever it takes to make your business a success; whatever your goals are, whatever your dreams are, whatever it is that God has put in your heart.  Don’t do your best, do whatever it takes to succeed and to achieve your dreams and goals, and that’s it.  

Thanks so much to everyone for joining.  I will see you next week inside the Facebook group.  Take care everyone.

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Fashion Consultant Christine Daal



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