View Full Version : Consignment contract ?

Dru Lee Parsec
Mar-09-2004, 11:58am
Hi folks. I've been building mountain dulcimers for a while and I'm bulding a guitar and a mandolin for myself as well. I've place some of my dulcimers in a music store on consignment and even sold a few that way. But the store owner and I are good friends and we pretty much just do business on a handshake.

I was wondering if any of the pro builders here have a standard contract that they use when putting an instrument into a store on consignment? If so would you be willing to share it here?

I wrote up a short contract that essentially says the following:

The price I need to get.

The fact that the owner can sell it for whatever price he wants. If he gets a lot more money then my price doesn't go up.

The music store will take all resonable care of the instrument.

If the instrument doesn't sell by a particular date I can take the instrument back.

During the time that the instrument is in the store if I have a customer instrested in that instrument then I must sell it through the store. I cannot remove the instrument and undersell the store (which is something I would never do. The music stores are my window to the world of customers. I want to support them so they will support me. )

Is there anything else that I should add that I may be missing?

Thank you for your opinions and thoughts on this.


Mar-09-2004, 2:01pm

You may want to stipulate when and how you get paid by the music store. If, for example, the store allows layaways, do you get your money when the customer first agrees to purchase your instrument and places it on layaway or must you wait until it's paid for in full and picked up by the customer.

Also, how do you handle things if, for whatever reason, the customer decides to return the instrument to the store?

Just some thoughts...

Mar-09-2004, 2:27pm
What if seeing your consignment pc in the store results in a request for a custom order? Is the store entitled to a commission? WHAT you decide to work out is up to you, but you may want to have it specified in writing so there's no mis-understandings.

Dru Lee Parsec
Mar-09-2004, 4:32pm
What if seeing your consignment pc in the store results in a request for a custom order? Is the store entitled to a commission?
Good point. We already agreed on that one. The store gets 15% for simply placing an order. From that point on all the communication is between the customer and me, but I give 15% to the store as a finder's fee and to continue the good will between the store owner and myself. As you can tell, I feel very strongly about supporting the local mom & pop music stores. I'd rather take a little less cash and keep a good working relationship than to take a bigger sale and lose a friend and partner.

Mandodude: Those are some good points. I hadn't thought about either of those situations. In the past the customer always just paid for the instrument outright and the store owner called me up.

Joe, the owner of The Wandering Sage where my instruments are, said that every time he works with a luthier and he sells their first instrument there are 2 pauses on the phone call. He says the conversation always goes like this:

Joe: I have good news. I sold your instrument and I have your money.
Luthier: [pause as the good news sinks in] http://www.mandolincafe.net/iB_html/non-cgi/emoticons/biggrin.gif
Joe: How soon can I have another one?
Luthier: [Longer pause as the news sinks in of "Oh My Gosh, I have to build another one QUICK!"] http://www.mandolincafe.net/iB_html/non-cgi/emoticons/wow.gif

Mar-09-2004, 4:45pm
One other consideration is in case of a fire, theft or vandalism ... are you going to be a rider on their insurance policy or ... do you need to supply your own?

Ugly things do happen ...

Mar-09-2004, 11:39pm
As a retailer I would never agree to those terms. I would dictate the percentage based upon what my costs to represent that instrument are. I know what it costs for each hook in my store and what I must get for that space. Secondly, if I were to take a luthiers work into my store on a consignment basis I would talk to the maker and decide what I thought it would bring. If I got more, he would get his part and I would only get my percentage. If I sold it for less, he would get less and I would still get my percentage. If the sale was below a certain limit, I would call the owner first to determine if he wished to make the sale. If the product did not move or show substantial interest in a given period of time I would recommend the builder do something else with his product. I would not likely take a product that I felt was not going to move in a reasonable time whether I paid cash for it or took it on consignment. I would rather just buy the product for a wholesale figure and make what I can on it. While the builder may not get quite as much that way, he gets it out front and he no longer has to worry about the product. He can focus on what he does....build more...and has the funds to do so. Consignment sales may be the only way a small builder has to display or get recognition for his product, but it is not a good system of selling product. If the product is good and a market is there, he does not need to consign it. Just my thought.