A cabinet that is half yours
Many independent jewellers carry pieces they do not own. A local designer-maker leaves a collection on sale or return. A diamond supplier sends a selection of loose stones or finished rings on memo for a customer to choose from. A watch brand lends display models.
At the till, they look like any other stock. When one sells, somebody has to remember that the maker is owed their share, and that the memo from the diamond dealer says the rest of the parcel goes back at the end of the month.
Most of the time, the owner remembers. Then a maker emails asking what has sold since spring, and you cannot answer without going through three months of receipts.
Why consigned stock gets lost in the records
Your stock system was built for items you own. Consigned pieces either are not entered at all, or are entered with a cost price that is really the amount owed to the maker. Either way, the fact that they belong to someone else is a note in the owner's head.
Terms differ by supplier. One maker takes a set percentage of the retail price. Another fixes a return price. A memo from a stone dealer has a return date and requires you to keep the goods insured and secure. Keeping these straight on paper is hard.
Returns are also easy to delay. Pieces that did not sell sit in the cabinet past the agreed period because nobody is reminded.
What muddled memo stock costs
| Gap | Effect |
|---|---|
| Consigned pieces mixed with own stock | Stock value and margins overstated |
| Sales owed not recorded | Late or wrong payments to makers |
| Memo return dates not tracked | Strained relationships with suppliers |
| No per-supplier view | Hard to answer a maker's question quickly |
| Counts include items you do not own | Confused stocktakes |
Good relations with makers and suppliers depend on paying on time and returning goods when agreed. That is hard to do consistently without a record that treats their stock as theirs.
Insurance and security questions sit underneath too. Memo goods from a diamond dealer usually come with conditions about how they are kept and for how long, and consigned pieces from a maker may be worth more together than much of your own stock. If you cannot produce a list of exactly which consigned items are in the shop today, and whose they are, answering a question from your broker or the supplier becomes a stressful afternoon.
How we separate consigned stock and keep suppliers paid
- Each supplier or maker is set up with their terms: commission or fixed return price, payment timing and any memo period.
- Consigned pieces are entered against the supplier with the memo reference, date received and return date, and are tagged so staff can see at the counter that they are consigned.
- When a consigned piece sells, the amount owed to the supplier is calculated from their terms and added to their statement.
- Supplier statements are produced at your payment interval, showing pieces sold, amounts owed and pieces still held. They can be emailed directly to the maker.
- Before a memo period ends, the system lists the pieces due back so you can return them or ask to extend.
- Stock reports show owned stock and consigned stock separately, so your own stock value is clear.
How consigned stock should be treated in your accounts and insurance is for your accountant and broker. We build the records to follow their approach.
Paying makers without a receipts hunt
When a maker asks what has sold, you send their statement. When a memo is nearly due, the list is on your screen. At stocktake, consigned pieces are counted and reported separately.
- A clear line between your stock and other people's
- Amounts owed calculated from each supplier's terms
- Memo returns flagged before they are late
- Statements ready to send when makers ask
Signs your consigned stock needs this
- You hold sale-or-return pieces from makers or designers.
- You take stones or rings on memo from suppliers.
- Working out what you owe a maker takes going through receipts.
- Memo pieces have stayed in the shop past their return date.
- Your stock value includes pieces you do not own.