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Selling my banjos through a music store

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Jan 12, 2019 - 10:00:18 AM
6 posts since 12/5/2018

Hi,

I'm starting a part time business making banjos here in the UK, alongside my boring day job! I've got a music shop owner who is interested in stocking my instrument(s). Does anyone have any experience selling this way? What sort of percentage should I be offering to the shop owner?

Thanks!
Will.

Jan 12, 2019 - 10:05:06 AM
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Texasbanjo (Moderator)

USA

22143 posts since 8/3/2003
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I would think you would have to ask the shop owner what sort of commission he wanted for selling your banjos. If he does this for others, he probably has an amount in mind, according to the cost of the banjo. He may even want you to sign a contract before he takes any banjos on consignment.

Jan 12, 2019 - 10:08:25 AM
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614 posts since 1/25/2017
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If you are placing them in the store on consignment, you probably need to consult for legal advice. In most jurisdictions in the U.S. placing goods for sale on consignment with a merchant can place your instruments at risk of being repossessed by secured creditors, receivers, and bankruptcy trustees, etc. of the merchant. Certain public filings (UCC1's) are required to protect your ownership of the instrument.

Jan 12, 2019 - 10:08:56 AM

2472 posts since 5/29/2011

Music stores usually charge about 10 to 15% consignment fee. Willis Music, here in Lexington, wants 35% which I consider absolutely rediculous.
See if the shop owner would be agreeable to a 10% consignment and price your instruments accordingly.

Jan 12, 2019 - 10:24:50 AM

6 posts since 12/5/2018

Thanks chaps! Very good point about protecting ownership, hadn't thought of that. About 15-20% was what I had in mind, so glad I was in the ball park! It's an established store in an affluent area which sees a good foot fall so should hopefully be well worth it. Cheers! Will.

Jan 12, 2019 - 10:43:19 AM

1629 posts since 4/7/2010

When I accepted instruments for consignment sale, I charged 20% with a minimum fee of $200. It takes a lot of work to make the instrument look good for photos, take photos, write a witty description, publish on the website, talk to customers, make the sale, pack and ship, and pay 4% of payment for processing by Paypal or Credit cards.

I sold a vintage Fender bass guitar recently through Elderly and had no problem with the $1,000 they took for consignment fee. It saved me a lot of grief talking to everybody's brother and their uncle that would want me to give them a valuable bass at a bargain price and then complain that there was one slotted screw where there should have been a Phillips screw.

The point about a pending bankruptcy and potential loss is valid. You have to pick a retailer that is solid and be aware and accepting of risks when leaving your instrument in the care of any shop. I had a customer that lost a treasured guitar he had left in a shop for repair work. When the shop went bankrupt the shop's contents and other assets were sold for taxes owed. Nothing he could do to get his guitar back.

Bob Smakula
smakula.com

Jan 12, 2019 - 12:09:24 PM
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9390 posts since 6/2/2008

I believe my local instrument shop takes 30% on consignment sales and charges additional fees if they do eBay marketing -- which I think is totally unreasonable. Their commission is supposed to cover their cost of selling the item.  At least I would think so.

Consignment seems to me to be a no-risk/low-risk way for a shop to have inventory to sell.

In your case, rather than giving the music shop a percentage, why not have him deal with you the way he deals with other instrument manufacturers and buy your banjos with his money at wholesale then mark them up to sell at retail? 

This requires you to find a wholesale price that's high enough to give you sufficient profit on each banjo and low enough to allow the dealer to charge a marked-up price at which the banjo can actually sell.

You could start by learning the typical difference between MSRP (manufacturer's suggested retail price) and dealer cost.  Seems to me that discount dealers sell instruments at anywhere from 25% to 35% off "list."  Obviously, that still leaves them a markup.

Jan 12, 2019 - 1:51:13 PM
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bluenote23

Canada

1007 posts since 12/4/2012

Just a little dose of reality here. I am a former retailer (but not of musical instruments). A retailer will not really be very interested in your banjos if he is going to make less of a margin selling them than any of his other instruments (unless they are exceptional enough to attract customers and sell themselves).

Maybe in the musical instrument world, retailers get by on a 10%-15% margin but in the retail world that I know, those shops are are all bankrupt.

If you want to be in business (and not just a hobby) you have to think like a business person. If, say, your banjo is the same price as a Goodtime but the retailer makes more money when they sell the Goodtime, then, unless your banjo is absolutely fabulous, the retailer has no incentive to show your banjo to a prospective buyer. He'll suggest the Goodtime and the sale will be done.

Retail space costs money. All things being equal, the retailer will put the instruments that will make him the most money in the best spaces. 

Edited by - bluenote23 on 01/12/2019 14:04:32

Jan 12, 2019 - 2:56:52 PM
Players Union Member

Chris Meakin

Australia

2064 posts since 5/15/2011

Maybe try selling via the BHO first?

Eric only charges a very reasonable sum. You might be surprised at how well you do via here.

Jan 12, 2019 - 3:13:54 PM
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beegee

USA

21019 posts since 7/6/2005

I'd be more inclined to start my own website or FB page to market my products. Unless the store has a very high traffic volume that will expose your banjos to the buying public, I don't see an advantage of giving it a percentage.

Jan 13, 2019 - 4:53:08 AM

1688 posts since 4/29/2012

quote:
Originally posted by SimonSlick

If you are placing them in the store on consignment, you probably need to consult for legal advice. In most jurisdictions in the U.S. placing goods for sale on consignment with a merchant can place your instruments at risk of being repossessed by secured creditors, receivers, and bankruptcy trustees, etc. of the merchant. Certain public filings (UCC1's) are required to protect your ownership of the instrument.


Something similar here. I know somebody who had a vintage Mercedes on consignment with a specialist car dealer. Dealer went bust. She never saw the car again as the liquidators (apparently legally) included it with the dealer's assets. 

Jan 13, 2019 - 11:29:33 AM

6 posts since 4/26/2018

quote:
Originally posted by Culloden

Music stores usually charge about 10 to 15% consignment fee. Willis Music, here in Lexington, wants 35% which I consider absolutely rediculous.
See if the shop owner would be agreeable to a 10% consignment and price your instruments accordingly.


I run a violin shop and don't know of anyone who charges less than 25%. 10% would not be sustainable. The artists that I know report that the galleries that represent them charge 50%, which I consider unreasonable.

35% is not unreasonable. Consignment fees only drop to the 10% range when you are dealing with instruments(and art) in the high 6 and 7 figure prices.

I sell other makers instruments on consignment, but what you really need is to make a personal connection with the person representing you. Otherwise, it is just another item hanging on the wall and what you want is someone who likes you and wants to help you, not just sell your stuff.

Jan 13, 2019 - 5:13:24 PM

4587 posts since 5/14/2007

The typical wholesale cost of a new music instrument is 1/2 the Manufacturer's Suggested Retail Price. So if a banjo has a suggested retail price of $500, the shop owner paid $250 for it, plus shipping. With a consigned instrument, the shop owner may or may not have an investment in the instrument, either of time or materials.

When I was in the retail music trade in So California, the typical consignment fee was 20-25% of the selling price. The owner of the instrument set the price he or she would accept for the instrument and asking price reflected that plus the commission.

Just last week I sold a guitar outright to a shop. They gave me more than I expected, but less than half of what I suspect they will get for it. Trying to sell it myself would have been more bother than it was worth to me, so I'm pretty pleased. I have no problem with a retailer making a profit. I want the shore there when I need their goods and services.

Edited by - John Gribble on 01/13/2019 17:16:14

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