Sunday, 15 April 2012

Selling: Sale or Return


I have recently been working on finding new stockists to sell my cards and prints - a number of the responses I've had have asked to work on a Sale or Return basis and it got me thinking about the ups and downs of sending products without receiving upfront payment.

Sale or Return (SOR) does what it says on the tin, the idea being that you send a selection of work to a retailer or gallery who will sell the item on your behalf and pay you a percentage or agreed price if and when the product is sold...

Now, the optimist in me sees the benefits.
-It is better to have the work out there in the 'real world' than sitting in my studio.
-If things sell amazingly well the stockist may decide to make a wholesale order.
-There is the possibility of finding a great new customer base.

However, the more I think about it and the more experience I have the less keen I am to work on this basis.
By taking goods on an SOR basis, the stockists have no risk attached. There is a great deal of trust needed to hand over your work and rely on another person to dedicate their time to selling it - and notifying you once those sales have been made.

I can see that small and fledgling businesses do not have the budget for huge stock outlay but there must be a compromise. Small initial orders perhaps?

Some potential stockists have requested postal costs are paid by the supplier too, in essence charging the supplier (me) to send on a big box of no-risk-attached-freebies... Something in this doesn't sit well with me.

Talking of costs, there then comes the questions of liability for damaged goods and how to chase payment for stock should a company enter into financial difficulty. The Sale or Return agreement is huge and a complete minefield for the small business person.

There are echoes of the creative dilemmas of providing illustrations for the exposure or interning for the experience in Sale or Return. It's a fine balancing act.

Though it may seem as though I'm on a complete Sale or Return downer I'm not totally averse to working this way. And I'm not saying that Sale or Return cannot work. Some of my stockists and I do work on this basis. The ones who have committed to promoting my work and have already placed large or regular orders, or those who I genuinely have faith in and see working successfully and honestly with my peers... they are the exceptions.

Even in these cases I have decided to monitor my SOR stock much more closely, not because I don't believe these stockists aren't doing everything they can to make this situation work for both of us, but because ultimately the risk lies with me.

The Prince's Trust website has some good tips on Sale or Return here.

What have your experiences been? Have you made Sale or Return work for you?

xx

9 comments:

  1. Great post Stacie! When I started selling in stores I did several SOR deals with your pro points in mind - I was just excited people wanted my stuff in their store and didn't think too much about the potential down sides! I had mixed results with it. In 2 cases, shops closed down and disappeared with my stock and there was nothing I could do to get it back - a good lesson! These days I have a couple of stores I still do this for - small, independent places where I have a relationship with the owners and it works well for both. As you say, I'm open to it, but I'm far more careful these days. I also make sure retailers know I have no minimum order - they can order 2 cards if they want to see how people react to them!
    Goodluck with it!
    PS My husband and I are dreaming of starting a little store in Tasmania soon and I would LOVE to sell you cards!

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  2. I found this most helpful Stacie and thank you for sharing your thoughts on the matter. It seems indeed to be a scary side to our creative world. There is lots to think about isn't there.

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  3. You've definitely hit on the key points from what i can see. It's always exciting when someone wants to stock your work, so it's very easy to get carried away and not really think of the business side.
    From my experiences i've learnt it's definitely worthwhile to keep a detailed inventory of the stock you send.
    Always have some sort of written agreement with the shop - include things like how often you'll get paid, responsibilities over stolen or damaged stock etc - write your own terms if the stockist doesn't provide any for you, for both parties to sign and keep, that way you have something to refer back on just incase!
    Also with postage costs, if it's going to cost a lot to send a large amount of stock, it's always worth asking for half to be paid by the shop... if they're unwilling or kick up a fuss it's probably a bad sign!

    I wish this post existed when i first started selling things in shops! xx

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  4. Ah thanks for such lovely comments!

    Glad this is of some help - It has definitely been a big learning curve for me. Some great tips Harriet, signed agreement is definitely a good idea!! I am still trying to navigate the minefield :) I also don't have a minimum order so completely agree Jen, this is hopefully an incentive to avoid working to SOR.

    xx

    Ps - Jen, I hope your shop dreams come true!!! x

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  5. Hi stacie! What a great post! I really need to get on top of all of my paperwork...So far i've had mostly good experiences with SOR however you can end up investing ALOT of money and not seeing a return for a good while.I have some shops who are really great and on top of sales and pay me on time and others where its really hard to get paid what your owed..Mainly though the shops are good. Nowadays though I tend to say cards/mirrors small thing have to be bought out right and prints can go on a 3 month SOR basis..Thanks for the link to the Princes Trust too! x

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  6. Hi Rebekah, I completely agree it depends from shop to shop, it's just taking the risk when the shops are ones you don't know! I am sure there is an answer out there!! :) x

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  7. This strategy can probably add up more accounting tasks, too. Considering the fact that you have to monitor this along the way, the expenses are likely to increase as well. Those kinds of changes can make accounting very crucial, because it’s never constant. How are you dealing with this?

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  8. You may want to consider using simple accounting software. Doing your own accounting of what comes in and goes out is so much easier nowadays with the creation of these kinds of programs. Not only will you be able to keep track of sales; you’ll also be able to keep track of your clients and your supplies.

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  9. Ivo’s right. Accounting software comes in different varieties, all great for different functions of accounting. I’m sure there will be at least one suited for your needs. But, I think you should also keep offline records of your inventory just in case the Internet goes out, and you can’t access your online or software records.

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