Creative Ways to Boost Holiday Sales
If you own a retail gift shop, chances are, the holidays represent some of your most profitable seasons; still, heavy competition for customer dollars means you have to be on your “A” game to generate the greatest profits for Christmas, Easter, New Year’s Eve, Independence Day, and so many other holidays throughout the year. One excellent way to boost holiday sales is to sell on consignment. The following offers an overview of consignment selling and details how you can leverage selling on consignment to boost holiday profits.
What is selling on consignment?
At first glance, it’s easy to dismiss consignment selling for its secondhand-store connotations. Many people equate consignment stores with selling used goods; however, selling on consignment doesn’t restrict you to selling used merchandise at all. In fact, small retailers and major chains alike have adopted consignment sales strategies to boost profits.
Here’s how a typical consignment arrangement works:
- A distributor, retailer, trading company, manufacturer, or entrepreneur (the consigner) has a product to sell, but doesn’t want to/struggles to get brick and mortar retailers to purchase it in wholesale or bulk.
- A retail shop (the consignee) thinks the product might be a good fit for its customers but isn’t willing to take the risk of purchasing in bulk and trying to move the merchandise.
- The consigner and consignee come to an agreement in which the consigner retains ownership of the products and the consignee agrees to display the products at its store and process sales. For each sale made, the consignee retains a portion of the profits for itself and delivers the remaining profits to the consigner.
In this scenario, a consignment arrangement eliminates all risk for the retailer yet provides an opportunity to boost profits. At the same time, the arrangement allows the consigner to get its products in front of the retailer’s customers.
Here’s a potential real-world scenario: a small gift shop sells collectibles for special occasions. The shop offers gift wrapping but does not carry greeting cards; the overhead of purchasing greeting cards in bulk represents more risk than the shop wants to take. A consigner, then, might sell holiday greeting cards on a well-designed holiday display, meant to be positioned near the cash register to motivate impulse purchases. The shop agrees to let the consigner place its display near its cash register and to process all sales. The greeting cards sell for $5 each; of each sale, the retail shop gets $2.50 and the consigner gets $2.50.
As you can see, selling on consignment can represent a mutually-rewarding business relationship in which both the consigner and consignee stand to profit – at at no risk to the consignee, who also gets to fill a product gap customers are likely to desire and purchase.
Should you sell on consignment?
The decision to sell on consignment is yours, of course, but it stands to reason that if a retailer can assume no risk in an endeavor that requires minimal effort yet has a good chance to turn a profit, an opportunity is at-hand. The holidays are some of the best seasons to venture into consignment selling because customer traffic is already up and because customers are willing to buy extra items they might normally pass on. Moreover, many vendors offer exclusive holiday-themed products, perfect for seasonal consignment sales.
As a retailer, you have the upper-hand when it comes to consignment negotiations. This isn’t to say you shouldn’t strike a fair deal, but it does mean consigning vendors are willing to do more for less in order to get their products in your retail location. By agreeing to sell on consignment, you’ll still sell the same products you already do, but you’ll also have additional products to tack on to purchases and boost profits. A well-performing display could net you hundreds or even thousands of additional profits over a single holiday season. All this is to say: if you’re in business to make money, it’s worth considering selling on consignment to boost holiday profits.