Brandfinder.com example of consignment selling for CPG's

Retailers love consignment selling because there is no inventory risk. Managing inventory, especially leveraged inventories is very difficult for retailers.

CPG “dating” programs

In consumer packaged good marketing, “dating programs” were often used for seasonal products. For powdered lemonade or iced tea, if retailers bought their entire summer supply in April the terms of the dating program allowed them until December to pay for the inventory. All retailers love to sell inventory and have the cash in hand (increase in operating capital) long before the bill is due for the inventory.

Would having BrandFinder hold your hard to find SKU's be considered a "dating program" and be part of a brand's sales promotion budget?

The sales promotion budget process will vary by packaged goods company.

The marketing logic for BrandFinder is the same as for any retailer dating program. Brand managers want to maintain both share of market and share of mind. They want to make it easy for consumers to continue to buy their brand. They don't want to lose a loyal customer to a competitors brand or to a substitute product.

If the retail trade warehouse (grocery wholesale warehouse) was full of your brand of lemonade there was no room for a competitors brand. The same goes for a consumer's pantry.

Real Estate Brokerage

The real estate brokerage industry is an example of no inventory risk consignment selling. Real estate agents know once a homeowner signs a listing agreement (really a consignment sale contract?) the agent has no “0” inventory risk. This is why the agent is very willing to tell you to reduce your asking price. If the price of your home declines by $100,000 from $300,000, to $200,000 you as the home owner with inventory risk would lose $100,000. However your consignment seller also known as your real estate agent would only lose $6,000 (6% of 300k =$18k, 6% of 200k = $12k)

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Cars sold on consignment?

Could the consignment selling “no inventory risk” principle be applied to selling cars? In certain areas of the country for a little used car the answer is probably yes.

See a proposed consignment selling agreement for cars

CONSIGNMENT AGREEMENT

I _____________________________________________, agree to consign my car;

Year:_________ / Make:____________ / Model:____________ / Type:_______ ___

Vin # _____________________________________________

for sale with SelectCar LLC. The commission rate will be 6_% of the final sale price of the vehicle.

I must approve all offers below the price of $ ___________ .

I have provided a clear and transferable title to Selectcar LLC. I have cancelled my insurance and taken the license plates off the vehicle. The current _____ (state) registration remains in place.

SelectCar agrees to advertise, store and show this vehicle for a minimum period of 9 weeks without any expense to the owner, However, if the owner decides to terminate this agreement before the end of the 9 week sale period, the owner shall pay all advertising expenses incurred by SelectCar (not to exceed $500.00) and sales commission earned.

Vehicles delivered “as is” will have the following services

- professional detailing – cost $250

- Inspection by an ASE certified mechanic to develop a list of fixes with price to fix. – cost $50

- This total cost $300 is payable in advance (check or credit card) but is credited against the future sale

The car will be advertised with the all the imperfections on the fix list identified with the price to fix.

If SelectCar LLC believes the car will sell at a higher price with some of the items fixed, SelectCar may at its own expense repair these items. Any repairs exceeding $250 will need to be approved by the owner.

The cost of these repairs will be deducted from the final sales price.

Owner is to provide at time of drop off a photocopy of the following documents.

1. TITLE : _____

2. REGISTRATION : _____

3. INSURANCE CARD : _____

Any authorized services, repairs and commissions will be paid at the time of sale and / or return of vehicle.

CONSIGNEE’S SIGNATURE: _______________________

SelectCar SIGNATURE:

________________________________

DATE:____/____/____