Should you do Sale or Return?
Sale or Return definitely gets a bad rap and there’s no question that it’s not the best business model for makers who want to sell their work through shops and galleries, but does that mean you should never consider it?
FIRST LET’S TALK ABOUT WHAT SALE OR RETURN IS AND WHAT IT ISN’T.
Sale or Return is a type of agency agreement where a shop or gallery agrees to sell and market your work for you in exchange for a commission on the value of the goods they sell.
The goods still belong to you, until they are sold to the end customer.
As such, you set the prices at which the goods should be sold and the agent (the shop or gallery) shouldn’t mark them down or offer discounts unless this has been agreed with you.
The rate of commission is negotiable (usually initially proposed by the retailer) and should be agreed upfront.
As the agent is promoting your work, they should be given credit for all sales they bring to you, regardless of where the customer makes their purchase.
So, if someone sees your work at their gallery and then shops on your website, you should still give the commission to the gallery although this can be hard to monitor.
This makes sure that the shop or gallery is incentivized to promote your whole range, rather than just what they happen to have in store.
The store or gallery should make payments to the maker once a month, with paperwork that shows what they have sold, the amount of commission they have withheld and the net payment made.
This is how Sale or Return should work and, done in this way, it can be a great relationship between the Maker and the Retailer.
Unfortunately this is not always how it plays out in practice.
What often happens is that retailers don’t take care of makers’ work and don’t pay them on time.
And makers often undercut their retailers and treat them like a form of free advertising.
All in all, it makes for a fractious and mistrustful relationship, which is a shame because it doesn’t need to be this way.
Perhaps the issue is that we don’t always go into a Sale or Return arrangement with our eyes open, but instead we feel like we have no choice and that we won’t get our work into shops and galleries unless we accept an arrangement that isn’t particularly favourable.
Let’s look at some of the positives and negatives of selling on Sale or Return so we can make well-informed decisions from a position of strength, instead of feeling resentful and missing out on the opportunity to build relationships and get our work in front of people.
THE UPSIDES OF SALE OR RETURN
THE DOWNSIDES OF SALE OR RETURN
SO WHAT DO YOU NEED TO CONSIDER BEFORE TAKING ON SOME SALE OR RETURN RETAILERS?
1. You need to have clear terms and conditions so that you set out what you expect. When will you get paid for sold work? What is the commission level? What happens if work is damaged or stolen while in the retailer’s care? Who is responsible for postage costs?
It is important that you have your own terms and conditions rather than relying on the retailer to set the terms. You can always negotiate but it’s important to know your starting point in terms of your expectations.
Sale or Return isn’t the best deal for makers and it definitely has something of a bad reputation but there are upsides and there are times when it can help you move your business in the right decision.
Like everything else you just need to know where to draw the line and that’s different for every business.
I firmly believe that if you make decisions based on what is best for your business and know where you can negotiate and where you have to say no, you can avoid that feeling of having no choice which can lead to resentment and lack of motivation.
I hope next time you get asked about Sale or Return, you can make that decision from a position of confidence and feel happy with your answer, whether it’s a yes or a no.
I'm Nicola and I founded the Maker's Business Toolkit to help all Artists & Makers to build profitable businesses.
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