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Hobby Shop consignments

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Hobby Shop consignments
Posted by don7 on Saturday, June 30, 2012 5:47 PM

One of the fellows from the local railroad club recently moved into an Old Folks home.

He has over the years collected a lot of HO model railraod locomoitives and passanger and freight cars. His wife brought the items to the local hobby shop to sell.

The shop wants 25% for the first 60 days that the item is in the shop and if the item has not sold in the 60  days m the shop charges rise to 35%? THe shopo at this point will set the price to what it considers as current market value.

Is this really the going reate for hobby shops with consignment goods?

Some of the fellows at the railroad club have offered to take care of the goods by disposing for the items at e-bay. Even with e-bay charges I think e-bay would be the way to go, especially when you hav vounteers to acutally post the items.

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Posted by richhotrain on Saturday, June 30, 2012 6:00 PM

I agree with you.

eBay is the way to go.

The total fee for a seller including eBay fees and PayPal fees is under 10%.

You have a nationwide audience, and the final selling prices are usually pretty good.

I would skip the consignment approach.

One other thing.  If you wait until Fall, you will get much more interest and higher sale prices on eBay. 

 Wait until after Thanksgiving to list the items.

Rich

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Posted by galaxy on Saturday, June 30, 2012 6:19 PM

Everybody is out to make money.

Consignment shops for other goods - such as clothing- typically get around 50% of the sale price when the item sells. Its a 50/50 proposition.

Or in other shops Credits can be given based on a sales price of half {or less} for the item if the shop "buys" it from the seller, or when the seller "trades in" for new clothing off the shops racks. Some even allow one to "trade in for credit" at about 50% or even less, I've seen as low as a 30%- 1/3 of what the item is expected to sell for.

If the item {for basic consignment shops} doesn't sell in 30 or 60 days, the owner must take it back. They can bring it back later, but it will be at a different price because it den't sell at the previous price.

I am not sure how the "trade in" or "the Buy" stores handle items not sold...since they already gave the "credit or cash:" to the trader-inner. They probably mark it down as a retail store would as they then have the item owned by them and already  "paid for" trough trade or cash back to the original seller-trader-inner.

All these consignment shops are usually picky now. they won't take grandma's clothes just cause she passed away and you want to get rid of them. They have to be saleable and make money so as not to take up valuable space from clothing that will sell. It will depend on their marketing strategy- if they are vintage clothing maybe g-mas clothing will sell, if Current market for kids..only good durable recently used  clothes will work..not Sears Tufskins jeans found in the attic.

Places like Salvation Army or Goodwill will sell off clothing not good enough for selling in their shops to manufacturers who buy cotton clothing or the plastic fabrics for use in their products.. your old cotton ripped jeans may end up in a dollar bill if sold to the USA mint as scrap cotton for rag paper!

So It doesn't seem to me that the hobby shop owner is out of line. Ebay is always a crap shoot as to what someone will pay for something...even with a "buy it now" price..if the "BIN" price is too high, no one or few will buy.

If they don't sell in the shop in a reasonable time, she can always take up the club member's offer to front  the items on ebay for her.

Geeked

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Posted by don7 on Saturday, June 30, 2012 6:53 PM

There is a comprehnsive listing of all of the train items indicating how old the items is the manufacturere, the road name, and for rolling stock if it has kadee couplers and metal wheels. The list was sent to a few of those model railroader estate buyers who advertise in the model railroad magazines.

I was astonished at how little they offer, quite frankly I thing the hobby shop would bring more money to the owner than if they were to sell to these estate buyers.

Mind you I was advised that the hobby shops rates are actually quite good as most charge more.

I agree, e-bay is the way to go, however, not until fall or winter. Prices on e-bay for items such as model railroad items take a big drop in the summer.

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Posted by jeffrey-wimberly on Saturday, June 30, 2012 6:58 PM

Seems to me the shop is trying to rip him off.

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Posted by riogrande5761 on Saturday, June 30, 2012 6:58 PM

20% Consignment is pretty standard.  I don't know if greed is the right word but percentages listed are higher than I've ever heard, both in model train consignment or other area's like jewelry etc.

In the past I consigned trains at an LHS shop in a city where I used to live, I marked them at prices which I figured would sell, basically significantly below the original MSRP, and most of the items sold withing 1 or 2 months.  The shop to 20% and I spent the remainder there on merchandise.

If you can't get the standard 20% or close to it, then yes, go Ebay or maybe a Yahoo Groups email list for selling.

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Posted by Odie on Saturday, June 30, 2012 8:12 PM

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Posted by richhotrain on Saturday, June 30, 2012 8:30 PM

Odie

How are you paying less then 10% fees on eBay/Paypal? Last time I sold on there (couple months ago), it was more like 14%-16%.

OK, I just ran some numbers.  9% for eBay and 3% for PayPal, so 12% total.

Rich

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Posted by FlyingCrow on Saturday, June 30, 2012 8:34 PM

Sell it on HO Yard sale, now known has HO Interchange on the Yahoo boards and maximize your friend's value.    The fee the hobby shop quoted you is nearly obscene.   10-12% is considered industry standard.   Ebay...well, I have my opinion of them, we'll leave it at that.

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Posted by richhotrain on Saturday, June 30, 2012 8:40 PM

FlyingCrow

Sell it on HO Yard sale, now known has HO Interchange on the Yahoo boards and maximize your friend's value.    The fee the hobby shop quoted you is nearly obscene.   10-12% is considered industry standard.   Ebay...well, I have my opinion of them, we'll leave it at that.

Nah, c'mon, tell us.  What's wrong with eBay?

Rich

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Posted by Odie on Saturday, June 30, 2012 8:47 PM


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Posted by IRONROOSTER on Sunday, July 1, 2012 2:15 AM

Another option is to sell the stuff at a train show.  I frequently see this at train shows.  The Great Scale Train Show (which has allowed toy train sales for a few years now) has a White Elephant table where they sell on a 15% commission or rent your own table (or half table).

Enjoy

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Posted by Geared Steam on Sunday, July 1, 2012 8:32 AM

jeffrey-wimberly

Seems to me the shop is trying to rip him off.

Really? Do you, or would you, work for free?  

It's a business, and a take it or leave it proposition, no one is forcing the person to go this route so how would it be a "rip off". Hobby shops are are there to make a profit, not provide a charity service. If 25% is too high, negotiate a lower % and if they won't budge, go elsewhere. Its called a free market, although it seems this country has forgotten how that works.

Those of us in business understand this, not sure why some people think they are entitled. 

 

I agree with Rich, Ebay would be the best method for all the reasons he listed. Broader market, better prices.

 

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Posted by duckdogger on Sunday, July 1, 2012 9:42 AM

I view consignment as a garage sale.  In this instance, formerly $25 to $30 cars are typically $10.  My P2K E8s (DC) went for $90.

I have x-amount of HO "stuff" I am never going to use/build/whatever. "Why do I even own this?" is a familiar utterance.

If it is valuable to another modeler and the LHS facilitates the exchange for 20% (or 30%, or 40%), its money I didn't have access to, so I am happy.

 

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Posted by riogrande5761 on Sunday, July 1, 2012 11:21 AM

Geared Steam

 jeffrey-wimberly:

Seems to me the shop is trying to rip him off.

 

Really? Do you, or would you, work for free?  

It's a business, and a take it or leave it proposition, no one is forcing the person to go this route so how would it be a "rip off". Hobby shops are are there to make a profit, not provide a charity service. If 25% is too high, negotiate a lower % and if they won't budge, go elsewhere. Its called a free market, although it seems this country has forgotten how that works.

Those of us in business understand this, not sure why some people think they are entitled.  

I don't think Jeffrey was suggesting a hobby shop work for free and you seem to be putting word in his mouth by saying so.  I think he only agree'd that the percentage seemed to be (in his words) a rip off compared to the long standing standard of 20%, which in my 53 years has pretty much been universal for a long time. 

Now anyone can ask any percentage or price they want, but anyone who didn't fall off a turnip truck yesterday usually has a clue about what is fair and normal and what is not normal.  Of course if I saw 20% most places and I found a shop doing 35+ percent, duh, I"m gonna walk.  25%?  thats at least isn't far off the long time consignment rate so I might still work with that.  Anyhow, what bothers me about your post is you seem to be accusing another guy here of expecting hobby shops to do a service for free which is putting words in his mouth.  Of course shops should be able to make a profit, we all 100% agree with that so it goes without saying, no need to clobber someone over the head with this.

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Posted by AltonFan on Sunday, July 1, 2012 11:49 AM

I had an internet dealer sell some stuff for me over the last year.  He took 30-35% (after fees) based on how much it sold for.  I could have made more money if I sold the stuff myself, but there was a lot of stuff, and I didn't feel up to the dealing with the logistics of the matter.  The internet dealer wrote the listings, he dealt with the customers, and he handled the shipping.

The hobby shop I usually deal with doesn't do consignment any more.  They will buy items outright and resell them.

When dealing with a hobby shop or similar dealer in used items, the seller generally has to sell at wholesale, and the dealer will sell at retail.

If you sell it yourself, you have to keep in mind you are going to take certain costs; time, shipping, advertising.  Those costs are going to be reflected in the selling price, one way or another.

Dan

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Posted by richhotrain on Sunday, July 1, 2012 12:03 PM

AltonFan

I had an internet dealer sell some stuff for me over the last year.  He took 30-35% (after fees) based on how much it sold for.  I could have made more money if I sold the stuff myself, but there was a lot of stuff, and I didn't feel up to the dealing with the logistics of the matter.  The internet dealer wrote the listings, he dealt with the customers, and he handled the shipping.

The hobby shop I usually deal with doesn't do consignment any more.  They will buy items outright and resell them.

When dealing with a hobby shop or similar dealer in used items, the seller generally has to sell at wholesale, and the dealer will sell at retail.

If you sell it yourself, you have to keep in mind you are going to take certain costs; time, shipping, advertising.  Those costs are going to be reflected in the selling price, one way or another.

One thing about selling items yourself, on eBay or any other site, is the need to package and ship the items.  If you have a lot of stuff to sell, you are going to need a lot of boxes and packing material.

But, packing up model railroading stuff is a lot easier than finding boxes for golf clubs.  Trust me, I know.

Rich

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Posted by ctclibby on Sunday, July 1, 2012 1:35 PM

Welp, I agree with the 20% rule ... except if the dealer is doing something more to draw attention to the item(s).  Then it is up to the seller to decide if that extra percentage points are worth it.  Ebay is good also and probably will return the most $$$ per item.  If you get somebody else to 'do the ebay thing' expect a 50/50 split; or worse.

One thing that I didn't read - Make sure the whomever the consigner is has insurance to cover loss for this type of thing.  That prize item can disappear and the consigner can say 'beats me' and you are out those dollars AND the item.  Civil court costs; both time and money. The chances of that are probably greater than a break in, flood or fire.

 

ctclibby

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Posted by CNCharlie on Sunday, July 1, 2012 2:31 PM

I have been reading this thread with some interest as I have a 30 year career dealing with the financial side of small retailers.

First of all, anyone who thinks a small hobby shop can make money charging a 20% fee has no idea of the costs of running a small retail operation. It would take at least 35% to make anything( profit) on consignment goods. The other aspect is that some of the consignment goods might not be those in demand now so the time element to sell the goods comes into play, i.e., the longer it takes to sell the more costs involved in selling.

Ebay might well bring a better return assuming the person wants to go to the trouble. If you do it yourself then your time might not be worth anything but for a commercial establishment, time costs money.

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Posted by riogrande5761 on Sunday, July 1, 2012 2:45 PM

CNCharlie
First of all, anyone who thinks a small hobby shop can make money charging a 20% fee has no idea of the costs of running a small retail operation. It would take at least 35% to make anything( profit) on consignment goods. The other aspect is that some of the consignment goods might not be those in demand now so the time element to sell the goods comes into play, i.e., the longer it takes to sell the more costs involved in selling.

Ebay might well bring a better return assuming the person wants to go to the trouble. If you do it yourself then your time might not be worth anything but for a commercial establishment, time costs money.

 CN Charlie

Ebay or HOI is probably the way to go.

As for 20% not being enough to make it worth a hobby shops time, this was the argument I got from my LHS after he had been selling my consignment stuff for some months, and then abruptly handed back a bag of the most recent stuff I had given him.  Fine, but as he talked more, he mentioned I didn't spend enough money at his shop and he noticed (probably he was stalking posts I made on train forums) that I spend more money on popular interent vendors than his shop.  So in the end it wasn't that he decided to stop consigning stuff, it was just sour grapes, cause I continued to noticed consignemnt stuff on his shelves on the few occasions I darkened his door after that incident.  So attitudes and emotions obviously are at play or some stores wouldn't take consignment in the first place would they?

Now if it has gotten to be unprofitable, then thats the business changing and well, it is unprofitable for a lot of things due to the internet now - such as magazines, news papers and many other things.  If a hobby shop can no longer make it, the obvious course is to close and find another way to make a living.  After all, that is what many of us have already had to do umpteen times when or job field has gone "south" and we had to retrain and find a new job field.  Raises hand.

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Posted by Lee 1234 on Sunday, July 1, 2012 4:52 PM

I've been in situations like this and there is usually a time constraint of some type.  Sounds like the club has appraised the values.   I would offer the club buddies first chance at  the appraised values. If they offer 75% or more of the values take it .   Then I would let the shop cherry pick everything he feels he can turn in 60 days.  Clean the rest out by letting the club buddies ebay the rest.  

 

it gets most of what you are going to get with in 2 months, and doesn't take a lot of time on the wife's part.

L

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Posted by gandydancer19 on Sunday, July 1, 2012 5:13 PM

The hobby shop in my area does consignment at 30%.  He also will reduce the price of a item if it has been in the shop too long.  Maybe 6 months or more.

HO Interchange is free, eBay is not.  I watch HOI on a regular basis and have gotten some good deals.

Elmer.

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Posted by middleman on Sunday, July 1, 2012 5:51 PM

Don 7:

Just FYI here is the consignment policy for Caboose Hobbies in Denver -http://www.caboosehobbies.com/catalog/policies.php 

Scroll about halfway down the page to: Consigning With Caboose Hobbies - and then a little further down to:  Terms:

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Posted by fwright on Sunday, July 1, 2012 6:31 PM

don7

There is a comprehnsive listing of all of the train items indicating how old the items is the manufacturere, the road name, and for rolling stock if it has kadee couplers and metal wheels. The list was sent to a few of those model railroader estate buyers who advertise in the model railroad magazines.

I was astonished at how little they offer, quite frankly I thing the hobby shop would bring more money to the owner than if they were to sell to these estate buyers.

Most estate buyers will initially offer about 25% of price guide or average e-bay prices.  That's because most of the less valuable items will bring in no where near what you would think to the reseller.  Used generic cars - even with Kadee couplers and metal wheels - are going to bring in an average of $3 each, with the toy train set cars going for a $1 each.  I know there figures seem low, but realize that a number of cars will likely never sell at all.   And the best cars will rarely get more than $8 unless it is truly something special.  The handling costs can easily wipe out any profit on cars.  Most of the profit comes from reselling locomotives, where the percentages start to add up.  Train hobby shops will usually give up to 50% of value, although 40% is more typical on an estate buy.  It really depends on how much is worth serious money, and how much junque they are taking off your hands.

Mind you I was advised that the hobby shops rates are actually quite good as most charge more.

I agree, e-bay is the way to go, however, not until fall or winter. Prices on e-bay for items such as model railroad items take a big drop in the summer.

Consignment is an interesting devil.  Who sets the sale prices?  If the owner is setting the prices, I as the shop owner am going to demand a higher percentage than if I get to set the sales price.  As a shopper, I often shop the consignment stock at my LHS because I'm looking for a bargain.  Why bother with buying consignments risks (hidden defects or problems) unless I'm getting a good deal?  So on consignment, the LHS cannot sell at full value.  The one exception is new-in-box stuff - I've sold my excess Lionel that was new-in-box at full retail (on consignment).

Unless most of the lot is top-rate stuff, I don't see a lot to be gained by consignment vs taking 40% up front for the entire lot.  No worries about setting a price, or items that don't sell.

e-Bay brings the best prices - but is a lot of work.  I know, I sold my Dad's collection on e-Bay piece by piece when he went into assisted living.  I netted just under $1,000, where I could have gotten $400 upfront from the LHS.  I was glad to donate my time to Dad for that $600, but I'm not sure I would do it for anybody else.

my thoughts, your choices

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Posted by ATLANTIC CENTRAL on Sunday, July 1, 2012 8:57 PM

I have a few friends that have been involved in the "model railroad estate liquidation sale" process to asist the widows of several members of our local group who have passed away.

They have always found that about 1/3 of the items are VERY hard to sell - at any price.

I realize some people love to root thru old stuff, buy it and "refurbish" it, but personally any thing I buy on the secondary market is either in mint condition or very low priced, and usually both.

AND, it is a lot of work to sell that stuff. Drag it to the train show, photograph it and put it on Ebay, etc.

A great job for someone retired, but no money in it unless you get the stuff cheap - 25 cents on th dollar or less.

Sure, there are always those few "great pieces", but often much of it is of very limited value.

As to prices and fees - one again, the value of anything is only determined by how bad you want it and who bad the other person wants to be rid of it.

Sheldon

    

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Posted by BRAKIE on Monday, July 2, 2012 9:12 AM

Sure, there are always those few "great pieces", but often much of it is of very limited value.

--------------------------

Sheldon,That may not always hold true because as that old saying goes "one man's junk is another's treasure"..There is many unknown factors involved.

Having done a lot of horse trading over the years I found 95% of the people either over estimates the true value of the model or have no clue of the real value of the model.

Larry

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Posted by ATLANTIC CENTRAL on Monday, July 2, 2012 9:22 AM

BRAKIE

Sure, there are always those few "great pieces", but often much of it is of very limited value.

--------------------------

Sheldon,That may not always hold true because as that old saying goes "one man's junk is another's treasure"..There is many unknown factors involved.

Having done a lot of horse trading over the years I found 95% of the people either over estimates the true value of the model or have no clue of the real value of the model.

Larry, Agreed, but the universal problem is connecting the "treasure" to the person who considers it such.

To that end Ebay is likely the most effective means that has yet to be invented - like it or not.

If connecting the treasure to person is too labor intensive, there is no value in it despite whatever high price it may command - time is money.

Sheldon

 

    

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Posted by BRAKIE on Monday, July 2, 2012 10:18 AM

Sheldon,I agree e-Bay would be the better route to take since you have access to thousands of potential buyers.

As far as "time is money"-I never agreed to that greedy rich man's saying.

Time like life is far to precious to waste  worrying about money.

Larry

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Posted by jeffrey-wimberly on Monday, July 2, 2012 10:58 AM

Geared Steam

 

 

 jeffrey-wimberly:

 

Seems to me the shop is trying to rip him off.

 

 

 

Really? Do you, or would you, work for free?  

It's a business, and a take it or leave it proposition, no one is forcing the person to go this route so how would it be a "rip off".

I have and still do on occasion work for free. I have also sold and still do sell items for others and I consider 20% to be quite sufficient. I believe I've answered both of your questions. Whether or not the answers are satisfactory to you isn't my problem.SmileCool

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Posted by BRAKIE on Monday, July 2, 2012 11:32 AM

IMHO 20%  seems like a  steep price for doing nothing other then placing the model on the used or consignment shelf.I wouldn't pay it since there are other means to dispose of unwanted models

Larry

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