Thursday, July 20, 2006

Consignment! The Dirtiest Word in the Business!

Consignment! What does that mean?

As a young designer just starting out and not really having a knack for the business side of the fashion industry it will be very easy to fall prey to this situation.

A designer will apporach a store, usually a very popular boutique, and set up an appoinmnet with the buyer.
at the appointment, much to the designer's delight the buyer shows interest in the line and offers "consignment". This usually means that the designer will leave some pieces at the store with absolutely no commitment from the buyer to purchase these items. In most instances, buyers will appear to be very excited, very reassuring that the line will sell and will mention or explain that once a month the designer will receive the check.
In many reported instances from designers in my community, this is hardly ever the truth.

In defense of retailers, there are some stores that will takes a new designers merchandise to give it a "chance" and test the market. A boutique will never have complete control on what sells and what doesnt, however they should know their general clientele.

As a designer in a situation where you are just starting out, try "consignment" in a few stores and don't sell anything, then the product might need reevaluation.

On the other hand, the norm is that high traffic, trendy boutiques will take "consignment" and actually move the product rather quickly!
I put 8 pieces of my line in a very popular store in Los Angeles. The pieces were being retailed for 4 times the wholesale price and sold out in about two weeks ( I later found out from one of the employees).
This store in particular has a "special process" that I had not been alerted to when I first handed over my line. Basically the designer had to call before 11am on tues, oh wait when I called on tues they said it was thurs, whatever.
Anyways the designer has to call in at the appropriate time & day to "schedule" an "inventory appointment" with the buyer. During the appointment with the buyer you will just walk around and try to identify pieces that you left are not on display and they paid off of that and the origianl xerox color copy they give you of the pieces when you drop them off.
That was insane, this high volume, celebrity filled store did not have a POS system or any time of inventory tracking! And it took me three months of stalking the buyer to finally find that out!

So one note to take from that type of experience and a word of advice to help avoid things like that, my mistake for not communicating properly...

1. Question the stores inventory process. Will your items be entered into their POS system and assigned a vendor code? Will their system be able to track the sales of your items?
2. How do they handle their accounts payable? Who is the accounts payable contact? Anyone who pays their bills on time will be very open and honest. Just remember any other type of business that conducts financial transactions with another company is required to provide trade references & banking information. (i.e. real estate, financial businesses).
3. What is the store policy on exchanges & returns? What if an item is damaged or stolen?
4. How often should non selling pieces be rotated?

If I would have thought to ask any of these questions that one day in my career where I let myself get excited about getting into such a "hot" store, if I would have thought more "business" than "prestige", I would have saved three months of headaches.

Sunday, July 16, 2006

We Have Angered The Wrong Gods!

Today I was forwarded this posting on

"Last week, Christy Burton told me about a website called Retail Beef. This site was purportedly put up by a fashion designer to encourage feed back about store owners and buyers. Before you get really excited and stampede over there, there are a lot of problems with the site, so much so that I really thought long and hard before deciding to post this information. At this time, there are 83 comments reporting on the problems designers have had with specific retailers. Store names, buyers names, addresses and telephone numbers are often included. Many comments are complaints about such and such store bouncing boxes, writing bad checks and returning unsold product. Still, designers are well known to ship late or the wrong styles or whatever and there's no way to know from the comments whether the person complaining didn't do something to contribute to the problem.

There are credibility problems with the site too. The first entry of the blog is written in all capital letters. The credibility of many comments is questionable because they're written in such juvenile language. Or maybe I'm questioning the validity of the comments because in my own experience, designers tend to be more intelligent than average and express themselves well. It is transparent (to me) that most of the damning comments are from the same anonymous poster (nearly all comments are anonymous). Worse, it would appear that these few are multi-posting with complaints about the same stores repeatedly, in order to weight visitors impressions. It wouldn't surprise me if many of these comments were written by the blog author.

In summary, caveat lector because I think it'd be a tragedy to turn down a buyer who was innocent. There is no way to know if the return is really the designer's fault. Still, I can only think the comments on RetailBeef could serve as a testament to mind your sales and payments policies. In the comments, you'll find train wrecks of sales fiascos that never needed to happen.

In the event anyone wants to discuss similar matters here, I've started a topic in the forum."

On June 29th, 2006 I was contacted by Kathleen via email. She wanted to talk to me and asked me to check out her blog. I did look for a minute but did not have time to email her back.
She responded with "Kathleen Fasanella has left a new comment on your post "DESIGNERS! POST YOUR BEEF!":

I'd love to link to you but not if you can't respond. I'm getting 70,000 designers visiting my site a month and I think it'd be useful to my readers but under the circumstances (you're hiding from me and don't publish my comments) you can understand why I won't link to you.

It could not be more obvious to intelligent people that many of the comments published here appear to have been written by the same person. I think that what you have to say is sufficient. You don't need to lie, fake it or cover it up. That doesn't mean you shouldn't remain anonymous because I think you should. Just don't fake it. " END OF EMAIL

I was quite surprised and emailed her...
"hi there i actually run two other businesses in the other fashion industry and i started this pet project as a resource for my fellow designers. i have not had a chance to check out your blog give me 5 minutes...we will talk in the coming days i am just putting together tradeshows & i am in the middle of production...i try to publish the comments as fast as i you have a phone number where i can try to phone?" END OF EMAIL

I havent been able to call her and then someone forward her posting on her blog to me today.

Although Kathleen has reacted to being ignored in a very unusual manner, ( I wish buyers would react so quickly) she does make some valid points about the language of the blog. We have to remember to be professional and to discuss matters in an appropriate tone.
It is not nice to call someone "crazy" or use the "b" word when we are describing our experiences with retailers. Trust me, I know personally how frustrating things can become when you have worked so hard to create a beautifull, sellable product and your not getting paid for it, but using swear words and personnally attacking the "mental" health of these shady buyers is not cool!

I encourage everyone to remember we are all "LADIES" & "GENTLEMEN" and should not use fowl language. I do not want to start editing comments or not posting someones comments because of language. Just state the name of the store, location (extremely important since there are alot of common boutique names) and $ amounts, # of phone calls, interactions with the buyer, etc and whether it was resolved.

Hopefully Kathleen will change her mind and apologize for insulting me and accusing me of being the author of all of the "Anonymous" comments. The reason some stores appear more than once is because they are in the business of screwing people over.

I think that her blog is great and it has so much information on there, I encourage everyone to check it out! Also you can post your support of retail beef on her blog too!

Thank You For Your Support! Retail Beef