# Percentage of profit margin: wholesale vs. consignment



## Ravenarts (Nov 24, 2010)

Ok folks...here goes. I am so new to this but I need some advice to clarify things slightly. I searched the previous post and can't quite find all my answers. It's my first venture with t-shirts and I am fortunate enough to have an investor drop about $3k into t-shirts and she wants her original investment plus 6% of the profits. This has helped me tremendously with a price break for quantity. My question is... should the profit margin be the same for wholesale marketing as it is for selling on consignment? It seems that there should be some incentive for retailers to buy the product wholesale rather than consign...right? Most are saying 50% margin ($6 = $12) for wholesale and I've read post saying 25% to 50% for consignment. Is my thinking flawed? Am I missing something? I really would prefer avoiding consignment headaches...but I guess I have to take what I can get.


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## kimura-mma (Jul 26, 2008)

When selling wholesale you get 50% of the wholesale price. But when selling on consignment you get 25-50% of the *retail* price. I think that is what is causing the confusion.

Your numbers are actually correct:
50% of the $12 wholesale price is $6.
25-50% of the $24 retail price is $6-12.

So if you can set your consignment around the 30-40% range, you will make more per sale than when selling wholesale. This will create an incentive for retailers to buy wholesale instead of consign.


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