Sale or return - words of wisdom

14Nov12

By Ellen O’Hara

As a designer-maker there are some real advantages in supplying work on a sale or return basis (SOR) to a gallery or retail outlet.  You can show experimental pieces rather than just your safe sellers, gain valuable feedback and raise your profile among new audiences.  Many craft galleries only work on an SOR basis and outlets may request SOR terms when working with you for the first time. 

But SOR only really works where there is clear trust between you, the designer-maker and the outlet.  It is essential that you protect yourself and your work by issuing clear terms and conditions that set out the nature of this relationship.  Here are a few words of wisdom from myself and the designer-makers at Cockpit on how to make the most of SOR: 

Manage the relationship not just the stock

Working with an outlet on an SOR basis is different from one where the work is bought outright and as such the relationship needs to be managed differently. Get into the habit of calling your SOR stockists on a regular basis if they don’t keep you updated. SOR works when there is a good informative relationship between the maker and the outlet.  Ideally the outlet should notify you of sales regularly and pay quickly, should be happy to return work as soon as it is requested and give feedback on the response of customers.

But what about the stock?

Keep a record of which stock you have sent where, and mark items off the list as they sell and are invoiced for.  Since you are investing in the outlet by providing them with stock, it’s important that you know your work is actually going on display once supplied (sadly not always the case).  It is also important that you work is understood properly and promoted by the sales staff, and that it is kept clean and in good condition.  You role is to send work in good condition, with all the relevant supporting information and keep supplies topped up regularly.  Similarly, don’t be afraid to take work back or move it around it sales are not forthcoming. 

Pricing

When supplying prices, be sure you and the outlet understand which you are working from – wholesale or retail prices.  SOR mark-ups can (and arguably should) be lower than those when work is bought outright – if this is the case, quote the retail price in order that you don’t undercut those outlets that buy outright from you at wholesale prices.

Branding and display

Ensure there is clarity about how the work will be displayed, and whether you can or are expected to provide point of sale marketing materials and/or your own branded packaging.

The paperwork

Some galleries will have their own SOR contracts. But many do not so it’s crucial that you have written terms and conditions that both parties have agreed so you have a clear understanding of the deal you are entering.  Ideally this should include:

 A delivery note listing:

1. Contact details of both parties (you and the outlet).
2. The work that is being supplied with quantities, descriptions if relevant, and prices.
3. How long the work is on SOR for / when the work should be returned.

SOR Terms and Conditions

On the reverse of the delivery note or as a separate attached document, draw up terms and conditions that describe the nature of your relationship, with clauses on the following:

1. Clarity over who is responsible for shipping goods to the outlet (usually you as the supplier).  You may want to negotiate shared shipping costs for work sent outside of the UK.
2. That any damaged / missing goods must be reported to you within 24 hours of receipt of delivery to avoid confusion about work getting damaged before it left you / in transit / on the premises of the outlet.
3. That all works remain your property until sold, to avoid any claims by creditors should the outlet get into financial difficulty. This is the most vital term and must be explicit to ensure that the title of the goods is not deemed to pass to the outlet or final customer upon delivery, but upon payment.
4. What the payment terms are i.e. how you would like to be notified of sales, and how you wish to be paid and when.  For example, you might request that a sales statement at the end of each month, which then triggers you to send an invoice to the outlet for the appropriate amount, with payment within 7 days.
5. That the outlet does not have the right to put work on sale or make amendments to retail prices without your prior consent.
6. That you the designer/artist retain copyright and reproduction rights of all work, and that the gallery will not permit reproduction /copying / photography without your prior written permission.  You may want to give the outlet the right to publish images of your work for agreed marketing and promotional purposes though.
7. That all work is insured by the gallery whilst the work is in their possession (including in transit from the outlet to you) and that any breakages, damage, loss will be reimbursed to you at the wholesale price (or retail price if that is what you’ve agreed).
8. That the work should be clearly labelled and identifiable as your work.  You may wish to add a clause to state that a selection of the work you have supplied shall be displayed at all times.
9. Explain how you intend to deal with any commissions that may arise as a result of being seen in that outlet.  Will the outlet still gain a commission?  Or will they just broker the introduction?
10. That work is the responsibility of the outlet and should be well maintained whilst in the care, returned to you in the same condition as it was received and any maintenance or damage will be paid for by the outlet.
11. State how long the goods are on SOR for e.g. 28 days, 3 months etc. before they are returned. Or, if the goods are for an exhibition, put the exhibition dates on the delivery note and chase the outlet up to return the work when it’s finished.
12. That you have the right to request the return of work and how much notice you need to give.
13. Who will be responsible for returning unsold work (usually the outlet unless previously arranged).

This agreement should be signed for on delivery where possible.  Where goods are sent by post you can enclose an extra copy for signature and return.

So remember that working on an SOR basis is all about relationships. It’s an investment by you that should reap mutual benefits for you and the outlet.  Be clear about the benefits to you and develop terms that foster a relationship based on trust and respect. 

Special thanks to Shona Marsh and Ute decker, and other members of the Cockpit community (you know who you are), for feeding in ther words of wisdom.  And do let us know if you have any more to add!

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