6 ms·

The problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very littl

The problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very little and they have to hold the inventory.

munk-a 4mo ago
Yup, if I worked in a field where consignment was an option I'd refuse to do it - it's a huge headache. So I'd absolutely believe that the corporation has a policy against accepting consignment offers and might have a case to recover damages or something against the original franchisee. But the way they've handled this situation still appears to be atrocious. Lets say you consigned 200k at a 10% commission, 50k sold under the original franchisee and you were paid 30k already. If the franchise transferred and the company wanted out there should be an exit[1] in the contract to pay the additional 15k and then return the goods to the original owner. I think it's important to remember this sort of an option was always on the table. 1. Even if the original consignment contract was poorly drawn up without a clear exit clause I think it'd be reasonable to expect a resolution somewhere close to this in mediation.
- philistine 4mo ago
  You clearly didn't read the article. The original franchisee's contract allows consignement.
  - munk-a 4mo ago
    I have read that article and a few other sources since the first few ways I heard about this story were heavily biased. I have not yet seen B&M confirm that the contract that was leaked is genuine - it is incredibly unlikely that they would, of course, but it still remains one the facts in this case that I tenatively believe but have some reservations around. I thought it was interesting to, from the assumption that the corporation actually banned consignments, still work through how it doesn't free them from wrong doing. Even in the best light B&M has acted in bad faith.
    - liamwire 4mo ago
      Your alternative is that the contract was forged. Something easily falsifiable in court and absolutely devastating to any case brought, not to mention any follow-on charges that may result. Is that what you're putting forward?
      - munk-a 4mo ago
        I thought I was very clear above - my alternative is that even under the best light there were still clearly bad actions carried out by bricks and minifigs. When there is a grey zone I find it helpful to work out what the most charitable interpretation if it is still negative. Even when given the biggest benefit of the doubt Bricks and Minifigs is clearly acting in bad faith here.
- brittlepeanut 4mo ago
  The original contract very specifically allows consignment. It's published. So you "absolutely believe" something that was already proven false, and which you would know if you had even _skimmed_ the facts.
  - deleted 4mo ago
    [deleted]
gowld 4mo ago
"Holding inventory" is only problem if the store is full.
- munk-a 4mo ago
  It isn't - deprecation of held goods is always a risk and if you're working on consignment then that comes with weird financial liabilities. If there's a flood and you lose your inventory it sucks - if there's a flood and you lose an inventory of consigned values then suddenly you're potentially exposed to paying market value for a number of items in addition to all the site damage you'll need to address. Capacity is one aspect of the costs of holding inventory - but breakage is the much more expensive consideration and consignment just makes it even more expensive.
  - hnlmorg 4mo ago
    None of this is a risk with Lego. Depreciation: not going to happen on Star Wars sets that are not longer in production. Water damage: Lego is water proof. Breakage: being easy to take apart and put back together is Lego’s core principle.
    - lazyasciiart 4mo ago
      a large part of the value of secondhand stuff is in the box and packaging, assuming those nice boxes in the image were from his collection - those are a little more fragile than the Lego pieces themselves. Edit: wait, the whole collection was sealed and new in box. Yea, just water damage to those boxes would cut the value by at least 10%. Collectors are picky as shit.
      - hnlmorg 4mo ago
        They were sealed in box? Yeah you'd be right that damage would be easy and could significantly reduce the value. I didn't realize people bought Lego to leave in the box. But I guess I shouldn't be surprised because it's a common thing for collectors to do in other hobbies.
michaelt 4mo ago
Selling on consignment can be an absolutely great deal for shops, under the right conditions. If I'm a lego trader and I buy your set for $900 hoping to sell it later for $1000, in the meantime that's $900 I can't invest in anything else. And maybe I guessed the set's value wrong and I end up unloading it for $800, taking a loss. On the other hand, if I agree to sell that same set on consignment? Zero capital outlay, zero risk of me taking a loss - just some shelf space and admin work.
- Barbing 4mo ago
  Much better deal for a diamond ring than a giant kayak, then. Gotta pay rent to sit on the shelf!
- nine_k 4mo ago
  > just some shelf space Unless the store owns its building and has too little inventory to cover the shelves, the cost of not filling the shelves with the right goods is quite serious. In a low-margin business like retail, "just some shelf space" reads almost like "just some gold bars".
  - dghlsakjg 4mo ago
    But the shelf space is part of it either way... It's not like consignment stores take everything offered. Most of them are incredibly selective.
  - tikhonj 4mo ago
    This is definitely not uniform. I worked on inventory management at Target, and stores had quite a lot of shelf space—to the point where we'd hold large amounts of cheap, non-perishable stuff like cat litter because, well, we had the space for it. Stores also wanted to look full. We actually had parameters in our inventory management logic to increase inventory just for presentation reasons. If inventory is expensive, having some free, quality inventory can be valuable in and of itself even if it moves slowly.
    - sgerenser 4mo ago

The problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very little and they have to hold the inventory.

munk-a 4mo ago

Yup, if I worked in a field where consignment was an option I'd refuse to do it - it's a huge headache. So I'd absolutely believe that the corporation has a policy against accepting consignment offers and might have a case to recover damages or something against the original franchisee. But the way they've handled this situation still appears to be atrocious. Lets say you consigned 200k at a 10% commission, 50k sold under the original franchisee and you were paid 30k already. If the franchise transferred and the company wanted out there should be an exit[1] in the contract to pay the additional 15k and then return the goods to the original owner. I think it's important to remember this sort of an option was always on the table. 1. Even if the original consignment contract was poorly drawn up without a clear exit clause I think it'd be reasonable to expect a resolution somewhere close to this in mediation.

philistine 4mo ago
You clearly didn't read the article. The original franchisee's contract allows consignement.
- munk-a 4mo ago
  I have read that article and a few other sources since the first few ways I heard about this story were heavily biased. I have not yet seen B&M confirm that the contract that was leaked is genuine - it is incredibly unlikely that they would, of course, but it still remains one the facts in this case that I tenatively believe but have some reservations around. I thought it was interesting to, from the assumption that the corporation actually banned consignments, still work through how it doesn't free them from wrong doing. Even in the best light B&M has acted in bad faith.
  - liamwire 4mo ago
    Your alternative is that the contract was forged. Something easily falsifiable in court and absolutely devastating to any case brought, not to mention any follow-on charges that may result. Is that what you're putting forward?
    - munk-a 4mo ago
      I thought I was very clear above - my alternative is that even under the best light there were still clearly bad actions carried out by bricks and minifigs. When there is a grey zone I find it helpful to work out what the most charitable interpretation if it is still negative. Even when given the biggest benefit of the doubt Bricks and Minifigs is clearly acting in bad faith here.
brittlepeanut 4mo ago
The original contract very specifically allows consignment. It's published. So you "absolutely believe" something that was already proven false, and which you would know if you had even _skimmed_ the facts.
- deleted 4mo ago
  [deleted]

gowld 4mo ago

"Holding inventory" is only problem if the store is full.

munk-a 4mo ago
It isn't - deprecation of held goods is always a risk and if you're working on consignment then that comes with weird financial liabilities. If there's a flood and you lose your inventory it sucks - if there's a flood and you lose an inventory of consigned values then suddenly you're potentially exposed to paying market value for a number of items in addition to all the site damage you'll need to address. Capacity is one aspect of the costs of holding inventory - but breakage is the much more expensive consideration and consignment just makes it even more expensive.
- hnlmorg 4mo ago
  None of this is a risk with Lego. Depreciation: not going to happen on Star Wars sets that are not longer in production. Water damage: Lego is water proof. Breakage: being easy to take apart and put back together is Lego’s core principle.
  - lazyasciiart 4mo ago
    a large part of the value of secondhand stuff is in the box and packaging, assuming those nice boxes in the image were from his collection - those are a little more fragile than the Lego pieces themselves. Edit: wait, the whole collection was sealed and new in box. Yea, just water damage to those boxes would cut the value by at least 10%. Collectors are picky as shit.
    - hnlmorg 4mo ago
      They were sealed in box? Yeah you'd be right that damage would be easy and could significantly reduce the value. I didn't realize people bought Lego to leave in the box. But I guess I shouldn't be surprised because it's a common thing for collectors to do in other hobbies.

michaelt 4mo ago

Selling on consignment can be an absolutely great deal for shops, under the right conditions. If I'm a lego trader and I buy your set for $900 hoping to sell it later for $1000, in the meantime that's $900 I can't invest in anything else. And maybe I guessed the set's value wrong and I end up unloading it for $800, taking a loss. On the other hand, if I agree to sell that same set on consignment? Zero capital outlay, zero risk of me taking a loss - just some shelf space and admin work.

Barbing 4mo ago
Much better deal for a diamond ring than a giant kayak, then. Gotta pay rent to sit on the shelf!
nine_k 4mo ago
> just some shelf space Unless the store owns its building and has too little inventory to cover the shelves, the cost of not filling the shelves with the right goods is quite serious. In a low-margin business like retail, "just some shelf space" reads almost like "just some gold bars".
- dghlsakjg 4mo ago
  But the shelf space is part of it either way... It's not like consignment stores take everything offered. Most of them are incredibly selective.
- tikhonj 4mo ago
  This is definitely not uniform. I worked on inventory management at Target, and stores had quite a lot of shelf space—to the point where we'd hold large amounts of cheap, non-perishable stuff like cat litter because, well, we had the space for it. Stores also wanted to look full. We actually had parameters in our inventory management logic to increase inventory just for presentation reasons. If inventory is expensive, having some free, quality inventory can be valuable in and of itself even if it moves slowly.
  - sgerenser 4mo ago