consignment fees

[deltilogical]

in 2022, I was wondering what folks might share regarding any consignment fees on selling postcards for other people.   As we know, listing postcards or postal history items is work.   Maybe it depends on the quality of the items?  I seem to think 50/50 is right.  Maybe a large group of RPPC that are guaranteed to be successful would be more 70/30.  

[postcardcountry]

I belong to several different selling groups on facebook.  When it comes to commission selling, the majority opinion is "don't do it".  They suggest, most frequently, if you can do it, purchase outright.

Problem areas with buyers - returns and the length of time eBay gives for returns, the trend to jump to chargebacks, lost items.  To cover this, how long do you hold the consignors money?

Problem areas with consignors - patience is a virtue but most people want their money the day the item sells.  Consignors do not understand the pricing, the discounting etc.  They want their share of full retail value.  They will not understand why their item is priced $2 less than what they see on eBay (looking at listed, not solds).

Before you decide....what is an hour of your time worth?  How many cards can you process (scan to listing) in an hour?  Which percent will pay for for an hour's work ... 30 or 50?  How much are you really going to make?  Most of the consignment sellers expect the initial value of the item to be in the $25 and higher range.

In another lifetime (early 2000's), I sold vintage drum parts on consignment.  The consignor identified the item and set the price.  I just did the listing and shipping.  It was good while it lasted, I got 30% and nothing was listed for less than $15 dollars - a lot more was in the $30- $50 range with some items in the $100s.  That was an easier  time period with few returns and issues that happen now.

[deltilogical]

This would be a specific project for a large former dealer stock - I can't buy it outright  and this would allow me to sell it without taking any debt.    Terms would be clearly outlined to protect myself for any refunds. 

50% seems reasonable to me.  It's a lot of work. 

Its also the point where I wonder if I need to form an LLC, or get insurance.  

[njrtsr]

I don't do anything on consignment. Too much of a hassle, and that equates to lost time and money. And it could lead to a damaged relationship if I know the collector selling and we don't agree with some aspect of the deal, or if the cards bring less than they hoped.

However I would offer to buy anything that I would be interested in selling, and I would pay a good price. I take on all the risk, and give them immediate cash. 

[njrtsr]

You posted your reply while I was writing mine. You put it much better than I did 🙂

[paperpeasant]

Taxes!

Your income statements from eBay will not show that you gave 50% of the revenue to the consignor further complicated by the possibility that your consignor may not report it as income

[njrtsr]

You say 50%, is that before or after the ebay fees, shipping, etc? A card that sells for $100 with free shipping and a shipping cost of 3.50 nets $83 so a 50% take quickly looks more like 40% of the selling price. While postcard buyers are extremely nice and I hardly ever get returns, buyers do have up to 6 months to get their money back if they abuse chargebacks and paypal protections. I wouldn't touch anything on consignment for less than a $20 starting price *along with* a pretty high chance at selling because of the risk of doing all the work for little to pay.

[deltilogical]

On the previous consignment I tried to keep it simple, just a 50/50 split minus the Ebay fee on the item.  The shipping was separate and I kept all of that. 

I certainly appreciate everyone's points.

I would not do such a generalist consignment again with so many low dollar cards.   They were good cards just not really Ebayable easily.

The payment to the consignee is an inventory cost.  I guess if there was a chargeback months after the project close that would be accounted for like any refund. 

I think my decision, if the opportunity does come around, will depend on the quality of the items. 

[gothamcitytoys]

How are consignors ok with making less than the seller?  Unless of course you split all fees too.  But even still you make the same money as the person who owns the item?  I guess if it's small ticket items that works but is more problematic when it's big ticket stuff.