There comes a time in every one’s life that it is necessary to sell belongings – your own or someone else’s. Garage sales are one way but what if your stuff is of a better quality? You can sell direct to a dealer or you could might choose to consign your goods. Selling your antiques, or for that matter anything on a consignment basis, has both pros and cons.
Let’s look at the benefits of consignment:
- Consignment protects the price you want for the object – at least to start.
- The dealer is more likely to accept items that they may not otherwise buy because there is no financial risk in taking them. This is especially good when you have a variety of goods that may not generally appeal to a particular dealer.
- You get the items you are selling out of the house quickly which is a benefit when time is of the essence.
- Because the dealer works on a percentage basis (often 40-50%) it benefits them to get as good a price as they can for the item.
- You can arrange to take back things if they are not selling for the price you like. (Do this no more than once or twice however or you may find yourself with all your goods returned.)
Many dealers won’t even consider consignment because of the amount of paperwork involved. A reputable dealer will have a contract for you to sign explaining the responsibilities of both parties. They will have a complete list of your items and the prices they will be asking for your goods. They will keep track of the price realized for each item and the date it was sold and they will have a structured payment plan.
Some cons: Many sellers won’t use consignment because it takes a lot of trust to leave all of your goods with someone who has not paid any money for them. I could tell you a scary story or two… It is important that the dealer be a reputable one, and someone who has been in business for years. A storefront also means that the owner may not as easily walk away from his business and leave you in the lurch.
So how do you protect yourself? Here are some things you need to find out:
- How long have they been in business? How long at this address?
- How long have they been doing consignment? Can they provide a referral from another consignment client?
- How long is the contract for? (Three months is the norm as most things sell in the first two weeks)
- What happens to items that don’t sell? How long do you have to pick up the items before incurring storage costs? (Important to know if you won’t be around at the end of the contract)
- Does the dealer negotiate a lower price in order to make a sale? How much lower? Is there a standard percentage? (Some dealers have a standard 10% for negotiations and this is often built into the price).
- Is there a cost for researching the value of items?
- Can I change my mind if I decide I don’t want to sell an item? Is there a penalty for doing this?
- Is there a cost associated with getting the items ready for sale (cleaning, repair). How much per hour?
- How often do you pay out money owed to a consignor? Just at the end of the contract (risky) or some time in the middle of the contract?
- When can you expect to get a copy of the complete file?
A reputable dealer will be able to answer all these questions and explain other things you should know before consigning your goods.
Don’t abuse the dealer. I had some clients that brought in items to consign and would “change their mind” after they found out what the value of the object was. It did not take long to realize that what they wanted was a free appraisal.
It’s also a good idea to visit the store once in a while to see how your items have been displayed and how they have been selling. Vigilance keeps everyone honest and a reputable dealer will not mind at all. As long as both the seller and consignor respect each other, consignment can be a win-win situation.