The idea of give someone solid food for free and set aside them to sell it will in all probability either excite you — for the advantages I list below — or appall you . But in certain circumstances , consignment might be a great pick for farmers who have a nimiety of green goods , want to sell more per retail client or who want to expand their market reach .
What is consignment ? Consignment is the act of taking someone a ware — in this case , nutrient — and letting them not give upfront . Whatever does n’t trade come back to you , but the consignment seller pays you for what did sell .
How Consignment Works with Food
Most of the time when you sell food for thought to retailers they buy what they believe they can sell , mark it up and sell it themselves . The transaction for you , however , end at the original sale of your produce to that reseller . In a consignment situation , the transaction does n’t end until the garden truck is no longer sellable on the shelf . At this point , the retailer pays you for what sold and returns to the sleep to you for inventory ( and so you could verify they are being honest ) .
Possible Advantages of Consignment
Why anyone would want to sell their intellectual nourishment this way might not be obvious at first , but if you are deal with a small-scale retail merchant who ca n’t buy a lot of produce up front , then you have an chance to trade more food through that outlet , especially when you have a bumper crop . I lately did this with lettuce . I ship 10 pounds of extra lettuce to a retail merchant who had not been initially concerned ( or did n’t have an adequate budget ) , and that person returned with a check and the few bags that did n’t sell two weeks afterwards . So , lettuce that would have gone to barren turned into money for both parties .
Moreover , retailers often corrupt your food at the down wholesale price possible because they need to mark it up . If you selling on consignment , you could set a higher price , thus make more money per transaction for yourself . extend some committal might also make you a favorite vender of any retail merchant who is game for this type of transaction .
Possible Disadvantages of Consignment
The disadvantage are perhaps obvious . Because the retailer does n’t have as much vested interest , your products might not get as much attending and upkeep . Also , getting compensate might be complicated as you are relying on the vendor to keep caterpillar track of the sales . If a retailer forget to pass items that did n’t sell , you will have to charge for all of it , which might sour the relationship . This is why designing the consignment deal is absolutely key to offering this successfully .
How to Design a Consignment Deal
First , verify both party are unmortgaged about the deal . The producer expects to be bear after the sales are made and expects any unsold items to be deliver ( or composted upon check ) . The retailer must understand that any remaining inventory must be turn back or verifiably cataloged or that person will be charge for all of it . A clear bill is attached to the product with a billet about consignment , and a second account with final total is get off to the retail merchant after the transaction is complete . That invoice should be pay within 30 days or less , because the retailer should already have the profits from which to give you .
verify to test the waters with these sorts of transactions slowly and on a little scale so if there are any mistakes , they can be address without harm to the relationship . Verify that everyone understands the goals and expectations .
I do see consignment as an chance , with the correct retail merchant , for granger to have an additional sales outlet for their produce , and for cash - strapped retailers to get a encouragement in revenue . It must be done carefully , but few thing will endear you to a retailer more than providing a fashion to make money with no up - front investment . Then that retailer might be more willing to near you first when a motivation arises to stock the shelves .
