What would you do?

[samirish]

I have been approached by a customer that wants to sell my soap.
Have any of you guys ever had such an arrangement? Im wondering how that would work. Would I just give her a certain percentage off or a commision on every bar sold. I think she is planning on selling it through home parties.

Thanks guys

 

[ourwolfden]

There are two ways you could do this. One is to wholesale the soap to her. That is usually half the cost of the bar retail. So if you sell a bar for $5 normally you’d sell it to her for $2.50. This way she is responsible for ordering what she wants and when she wants it.
The other is to do it as a consignment. Normally you the split is 70/30 or 60/40 you getting the higher percent. But the way this works is you are not getting paid until she sell the soap. And you would be responsible for making sure she is stocked up.

 

[ourwolfden]

Or, I had another thought you could wholesale it to her but offer a price break. So a bar normally costs $5

1-10 still $5 each,
11-20 $4.75,
21-30 $4.50
31-40 $4.25
41-50 $4
51-60 $3.75
61-70 $3.50
71-80 $3.25
81-90 $3
91-100 $2.75
100+ $2.50

That’s personally the way I’d go. Offer more incentives the more she buys. Otherwise she may only buy 5 bars. Then it would be up to you to decided what you would allow for mixing a matching.

 

[kikajess]

Wholesaling is preferable in my experience. That way she buys them outright from you and you don't have to think about them any more. Consignment gets sticky. You have to remember what you give her, then you have to remember to get any unsold items back from her. The unsold items may be in poor condition due to improper or over handling. She doesn't pay for consignment items, so they won't be as valuable to her as if she would have bought them wholesale. If they don't sell, she doesn't have to keep them, so the motivation to sell them wouldn't be as high. Wholesale those puppies.

 

[Sihir]

Wholesaling is preferable in my experience. That way she buys them outright from you and you don't have to think about them any more. Consignment gets sticky. You have to remember what you give her, then you have to remember to get any unsold items back from her. The unsold items may be in poor condition due to improper or over handling. She doesn't pay for consignment items, so they won't be as valuable to her as if she would have bought them wholesale. If they don't sell, she doesn't have to keep them, so the motivation to sell them wouldn't be as high. Wholesale those puppies.

Agree 100% with you! Consignment offers her no real incentive to sell them, but if she's already invested in them then she has a great reason to move the inventory!

 

[DeeAnna]

Lots of threads on this issue:

https://www.google.com/search?q=consignment+wholesale+site:soapmakingforum.com

 

[Pawpaw]

I make soap and sell to retailers as well as doing online sales. What I do is offer a wholesale price (which is my cost plus my sales margin) then whoever buys my soap can out on own markup, they usually do 50-100%. This soap is now their own property and they are responsible for selling it. I have two customers who have consignment stock, the one I've been dealing with for over a year and she is one of my best sellers; had a high turnover. The other has had stock for a month and only sold one bar today. I'm thinking of taking it out her shop. Usually people with consignment stock don't have a financial investment and aren't to bothered if don't sell. In your case what I would do is sell the soap to the lady and she can sell it at what price she wants. Don't do consignment because as she travels stock could get damaged BUT what you could do if you want to do consignment is she takes it and pays when sold but is responsible for any damage or loss. Regarding price, it should be at your price or if you have a high retail price then offer her what would be a wholesale price. I use 100% on cost.


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