Selling on consignment

[ebliese]

I've got an opportunity here to sell my syrup on consignment through a local coffee shop. 70% me/30% them split which seems pretty good. Better than 50/50 or 60/40. The coffee shop is all about local stuff (they have a few other products made locally they sell on consignment). The owners are nice and when talking to them about the syrup, they presented me with the idea of selling on consignment. The shop seems to get a good deal of business. This would be a way to get our syrup out there a little more and also (hopefully) sell the remaining before the end of the year. We've sold at some farmers' markets this year as well as to friends and we have 5 gallons left of the 23.5 we made this year.

Anyone have any thoughts/advice/tips?

[TapTapTap]

Put it in writing with both parties signing the agreement. Then have them sign for all product delivered to their store. Make them liable in the agreement for all product not on their shelves. Also give them payment terms for product sold.

BTW, do you have product liability insurance?

Ken

[mainebackswoodssyrup]

Check your state laws for selling syrup. In Maine, it's a little more for your license to include selling as a "vendor" which means selling somewhere other than from the sugar shack. Each state has its own set of laws for selling a product and some are worse than others. Maine is pretty easy. Michigan may be entirely different.

[maple flats]

Know your state's laws and get product liability insurance, I have it, quite low cost. If the cost sounds too high you can't afford to sell syrup. Even selling from your sugarhouse or home you should still have liability insurance. Just 1 law suit, no matter if it's not any fault of yours, you will be out thousands of dollars defending yourself.

[TapTapTap]

You should also consider forming a limited liability corporation (LLC) to protect your personal assets from risk of a product liability case. Remember that insurance only covers you to the policy limits which might not be enough. And as Dave indicated, you should be concerned about product liability even when selling out of your sugarhouse. In fact, having consumers in your sugarhouse also creates a general liability exposure which you would likely have coverage as part of a typical insurance package.

Ken

[Andy VT]

So, on the liability insurance question, specifically what companies and policies are you all using for your sugaring operation? The smaller your operation, the more interested I am in your answer (I'm planning to ramp up to about 30 quarts of syrup this year, up from my previous record of 11 quarts, so, I'm pretty small!).

Also, what do I need to actually be legal to sell? For me, its purely door to door and neighbor to neighbor. Not even out of a sugarhouse. Anything besides properly concentrated and hot-packed syrup? I have searched the Vermont agriculture webpages as best I could and didn't find anything that suggested I'd need some kind of license to sell, but sometimes I hear rumors of such things, including within this thread. I'm more of an ask-forgiveness-when-needed type of guy in all things I do, but don't want to blatently disregard anything.

Andy

[TapTapTap]

So, on the liability insurance question, specifically what companies and policies are you all using for your sugaring operation? The smaller your operation, the more interested I am in your answer (I'm planning to ramp up to about 30 quarts of syrup this year, up from my previous record of 11 quarts, so, I'm pretty small!).

Also, what do I need to actually be legal to sell? For me, its purely door to door and neighbor to neighbor. Not even out of a sugarhouse. Anything besides properly concentrated and hot-packed syrup? I have searched the Vermont agriculture webpages as best I could and didn't find anything that suggested I'd need some kind of license to sell, but sometimes I hear rumors of such things, including within this thread. I'm more of an ask-forgiveness-when-needed type of guy in all things I do, but don't want to blatently disregard anything.

Andy

Andy,
That's a good question for an insurance agent but I doubt you'll find any reasonable cost for insurance that will be justified on just 30 quarts of sales. Our policy is up over $1,200 but it covers quite a lot.
ken

[maple flats]

My insurance is with Farm Family. I have $1,000,000 liability coverage. It also covers me on my property, and I have a u-pick blueberry operation, 4.75 acres, that's covered too.
I sell about 200 gal of syrup a year, plus about 30 gal of bourbon barrel aged syrup, then the blueberries ($8,000- $10,000 a year)
You better ramp up a lot of forget selling any syrup, 30 qts at? wouldn't cover the policy. Liability insurance is rather cheap, but not free.

[Andy VT]

Liability insurance is rather cheap, but not free.

How cheap are we talking?
I'm going to lose money no matter what I do (other than quitting the hobby); I've made peace with that.
But refraining from selling is not among the options I'm considering. The worst that can happen is my life and the lives of my family being completely destroyed. That will happen soon anyway. In 40 short years according to my life expectancy. Though I refuse to reveal my age.
All that said, I'm curious about all options. I'll ask my home insurance company too, and other folks with hobby-sized sales.

[TapTapTap]

How cheap are we talking?
I'm going to lose money no matter what I do (other than quitting the hobby); I've made peace with that.
But refraining from selling is not among the options I'm considering. The worst that can happen is my life and the lives of my family being completely destroyed. That will happen soon anyway. In 40 short years according to my life expectancy. Though I refuse to reveal my age.
All that said, I'm curious about all options. I'll ask my home insurance company too, and other folks with hobby-sized sales.

Andy -

I'm not exactly sure how it works but the question I would ask the insurance agent is whether home owner's covers you if it is strictly a hobby and you don't sell product - but just give it as gifts. I would also look at the applicable sections of your policy so you know exactly what the exclusions are.

I'm surprised we haven't heard from more hobby sugar makers on this topic.

Ken