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Step 1
Understand that when you consign your goods you are loaning your crafts to a gallery until the art work is sold or returned to you. As a lender of your goods, you need to be sure the gallery is in sound financial shape and is not likely to go into bankruptcy.
Would you give a gallery $1000 without asking about the financial security of the borrower and the probability of return of your loan? Your goods are valuable. Be sure the loan of your goods is protected and the terms are clearly set out in writing and understood by all parties.
Remember that the gallery may not decide if it will go into bankruptcy since creditors can force a gallery into bankruptcy so that the creditor can get paid. -
Step 2
As you decide whether this gallery and its offer of consignment is right for you, be sure to consider the financial health of the gallery. Ask for a copy of the galleries financial records. This can be uncomfortable, but it is important to determine the safety of your goods in the care of the gallery. If you are not able to get financial records, ask for references from the gallery. Be sure the gallery gives other crafts people regular accounting and pays their artists on time.
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Step 3
Is there a written consignment contract? If so, ask for a copy of their written contract and review its terms. Be sure you get a copy of the signed executed contract (including a list and description of all the goods you consigned to the shop and the locations of your goods if the gallery has multiple locations). If the gallery has no written contract, consider providing your own written contract.
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Step 4
Visit the store or stores and evaluate the merchandise. Does the store carry imports that will compete with your goods? Are all the goods sold on consignment or will your work be competing with items that the store bought and owns?
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Step 5
Loss. How will loss of goods be handled? Will the store compensate you if your crafts are stolen or damaged? Who pays for shipping of any unsold goods? Who pays for insurance on your goods while it is in the gallery? If there is an insured loss, who pays the deductible? What happens to shop worn goods?
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Step 6
Consignment. What is the split? How often are you paid? How often are you given an accounting? What is the term of the consignment agreement? Is the time period of the consignment fixed (for example for a week, a month, a year)? If not, do you decide when the consignment end or does the gallery?
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Step 7
Price. Who sets the retail price? Will the gallery be able to offer discounts? If there is a discount, how does that discount factor into your compensation?
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Step 8
Exclusivity. Is this business relationship exclusive or non-exclusive? If it is exclusive, what is the range of territory? the city? the state? the region of the country? If it is exclusive, can you sell goods over the internet or does the exclusive arrangement include internet rights?
