Consignment in multi-brand shops, design markets and concept stores

A multi-brand shop, a permanent design market or a concept store rarely buys what it sells. Brands leave their merchandise, the shop displays it and rings it up, and every so often it pays each brand what sold minus the shop’s share. That’s consignment: the piece sits on your shelf, but it isn’t yours until someone buys it, and even then most of the money isn’t yours either.

It sounds simple, and it is while you have three brands and a notebook. With fifteen brands, hundreds of pieces and two people working the register, consignment turns into a record-keeping problem: whose piece is this, how much did each brand sell and how much do you owe.

Who owns the stock

Under consignment, the merchandise still belongs to the brand while it sits in your shop. That has three practical consequences:

• What doesn’t sell goes back. The brand can ask for its pieces back, and you can return what isn’t moving. Your inventory isn’t an asset you bought: it’s a loan you have to be able to count.
• You need to know what came in. Every time a brand drops off pieces, someone has to record what it left and how many. If that record slips, the day the brand asks “how many of my candles do you have left?” you won’t have an answer you both accept.
• What gets lost has an owner. If a piece disappears or is damaged in your shop, someone has to decide who absorbs it. That’s agreed beforehand, not when it happens (What to agree with a brand before taking its merchandise lists what is worth settling up front).

How the money from a sale is split

When the customer pays, the money lands in your till or your bank account, but not all of it is yours. One receipt can hold pieces from several brands, and each is split on its own. An example with made-up figures, a customer paying cash:

Piece	Brand	Price	Shop commission	To the brand
Soy candle	Brand A (25%)	$350.00	$87.50	$262.50
Silver earrings	Brand B (20%)	$500.00	$100.00	$400.00
Receipt total		$850.00	$187.50	$662.50

Of the $850 that came in, $187.50 belongs to the shop and $662.50 is owed to two different brands. Had the customer paid by card, the terminal fee would come out of each brand’s share, and had they used a coupon, someone would have to absorb the discount. Those rules change the last number on every line, which is why they get written down before you open.

The consequence is uncomfortable but important: the cash in your till at the end of the day is not your profit. A good part of it belongs to the brands, and you’ll pay it out when the period closes.

Three ways to charge a brand

There are three models, and most shops use one of them or mix them brand by brand:

• Commission per sale. The shop keeps a percentage of what each brand sells.
• Space rent. The brand pays a fixed amount for its rack, shelf or display case and keeps what it sells.
• Mixed. Lower rent and a lower commission.

Which one fits, and how to run the numbers on a real sale including the terminal fee, is in How much commission to charge a brand in your shop; the Consignment calculator does that math with your own figures.

What goes wrong without a system

Consignment works on paper as long as nobody makes a mistake. The typical problems show up as the shop grows:

Stock that belongs to no one. A piece sells, but the notebook doesn’t say which brand it came from, or two brands carry similar products and nobody knows which one went out. At closing, one brand is over and another is short.

Settlements by spreadsheet. Someone copies the month’s sales into Excel, filters by brand, subtracts commissions and sends the total. It works until a sale was entered twice, a coupon was applied halfway or the card fee formula broke in one column. Every mistake is discovered after the brand has already been paid.

Numbers the brand can’t check. The brand gets a figure and has to take it on faith. If it can’t see what sold, when and at what price, any difference becomes an argument about trust instead of data.

Returns after payout. A customer brings back a piece you already paid the brand for. If it isn’t recorded, you either pay twice or eat the return.

The slow month. The brand pays rent but sold less than the rent. Without a clear rule, every slow month gets renegotiated.

What a brand wants to see

On the other side, a brand leaving merchandise on consignment wants to know three things, and wants them without having to ask:

1. What sold. Which pieces, how many, at what price and with which discounts, in the period you’re about to pay.
2. What’s left. How many pieces are still in your shop, so it knows when to restock and how much it has tied up.
3. How much you’ll pay and why. A statement that starts from its sales and arrives at the final amount with each deduction in plain view: discounts, terminal fee, your commission, rent and any balance carried over.

A shop that delivers those three things unprompted gets fewer calls on payout day and has an easier time signing new brands. How to build that statement, and what to do about returns and rent larger than sales, is in How to settle with your brands every period, without arguments.

The bare minimum

With or without a system, a consignment shop needs:

• Every piece tied to its brand from the moment it arrives, with a label that identifies it at the counter.
• A record of every piece in and out, with dates and quantities.
• Each brand’s terms in writing: percentage, rent, who absorbs discounts and card fees, how often you pay.
• A fixed cut-off date and a statement per brand at each cut-off.
• A way for the brand to see its numbers without waiting for you to send a screenshot.

How Atiéndalo handles it

Atiéndalo is a point of sale built for this model. Every product belongs to a brand and carries its barcode; every stock delivery is recorded; every sale stores, at checkout, the discount, the card terminal fee and the brand’s percentage, so the period report already shows what each brand is owed. The Consignment & settlements page shows what a settlement looks like.

For brands, the Brand portal is a read-only portal, signed into with each brand’s email, where each one sees its sales for the period, its stock and its statements, without logging into your account or seeing anything from other brands. If you already use Atiéndalo, Brands & suppliers explains how to set up a brand with its terms.