Renting Shelf Space. The In's and Out's

January 19, 2016 5:04 PM

I have had a movable storefront built for my business. (Men's fashion line) It has many shelves and hanging space. Much more than I need at this time. I had the thought to rent shelf space to other entrepreneurs who sell men's accessories and lines that do not conflict with mine.

I have done some research how grocery do this (shelves that are in the customers sight-lines cost the most. Upper and lower shelves are less) I am curious as to how they calculate the rent as I am looking for some sort of baseline to work with. I know it is a different industry. Is there some sort of standard.

Any other thoughts about this process is appreciated.

posted by goalyeehah to Work & Money (4 answers total)

Do you mean consignment? Rather than rent the shelf space, you hold an item for 1-3 months and take a percentage of the sale price. This is what I did when I placed jewelery in other people's stores. They would look at all my pieces and pick the ones they thought would sell. This was quite a while ago so I can't remember the percentage cut the store took but it would be negotiable.
posted by St. Peepsburg at 5:27 PM on January 19, 2016

Also now that my memory is coming back to me, I know another woman who made high-end jewelery and the process was the same. The store owner would pick pieces they thought would sell and merchandized their store accordingly i.e. top shelf / bottom shelf prices didn't matter, they would lay out the jewelery mixed in with clothing or space it around the store as they saw fit. And then they would take a percentage cut of the sale.
posted by St. Peepsburg at 5:30 PM on January 19, 2016

Response by poster: I was told by retailers that this is done by grocery chains. Apparently this is where the stores really make their money as opposed to food sales.
posted by goalyeehah at 6:46 PM on January 19, 2016

Best answer: There are a few ways to do this. You could select items and sell them on consignment. You get a percentage of the sale price as your commission. Write up a contract with the terms and keep it on file along with a list of their items. I am coming at this question as someone with a degree in fashion, and as a former owner of a high-end clothing and accessory boutique I can tell you that consignment sales were a huge part of my profits. They take no up-front investment, and you have control over how you display the items. Also if things don't sell, you just give them back and get more of what did sell. It's great.

Alternatively, you split (50/50, or some percentage in line with how much real estate they're taking up in your display) the cost of the booth space or pop-up shop rent with the other seller and do not take a commission, but your overhead costs are reduced. Write up a contract specifying what areas are theirs to use and whether or not you expect them or one of their employees to assist you with staffing.

I'm unclear on why you are researching grocery store vending as a model for a fashion line...the industries do not have that much in common, and you are correct that there are expected modes and ways of doing things in the fashion world. I wonder if perhaps you would benefit by finding a mentor in the field that could give you an overview of the process and best practices and so on.
posted by ananci at 6:54 PM on January 19, 2016 [3 favorites]