Consignment Application Commentary and Review Guidelines
Applications are reviewed on a case by case basis by the BoD or approved designee/committee to determine that the agreement is in keeping with the principles and ethics of Breadroot and will be of value to Breadroot.
| Applicant: | Applicant may be an individual, legal business, on interest group. Desirable applicants would be those with relationships which reflect a committment to the best interests of Breadroot Cooperative. |
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| (Include name of individual or group, legal status, and any relationships to Breadroot, cooperatives, natural and organic foods, etc) | |
| Goods to be consigned: | Consigned goods should be those items which serve an unfilled market within Breadroot or the community at large. Locally produced items not available through our usual wholsalers, or items which lie outside of the current Breadroot budget may be considered for inventory. |
| (Include description, source, and what merits the goods offer to Breadroot in terms of uniqueness, quality, cost, etc.) | |
| Services entailed in consignment relationship: | Understanding must be clear about the requirements for display space, climate control, lighting and security. If additional shelving, coolers or displays will be necessary it must be determined who will obtain them, who will maintain them and who will own them. Once all available display space is filled it will be necessary to then determine which displays will take priority and which must needs be eliminated. |
| Describe requirements for shelf space, refridgeration, locked display, and how those services will be provided (by Breadroot or by applicant) | |
| Describe process and responsibility for maintaining inventory and accounting, including whether these services will be provided by applicant or by Breadroot: | Provision of services by Breadroot increases the share of overhead to be expected in the consignemnt relationship. In all cases records should be clear and accessable for review by all parties with interests in the goods. |
| Describe expectations regarding pricing of goods and reimbursement of goods sold under this agreement: | A "fair price" is the cost of the good (COG) plus a markup determined by the BoD to best represent the cost of doing business and an allowance for the growth needs of the co-op. Currently the rate is 1.5COG, of which up to 0.3COG is given as discount to members who are ofsetting the costs of overhead with labor or other goods and services. A remaining 0.2COG remains as profit/growth allowance. An applicant may be offering goods on a wholesale basis, for which they will be reimbursed 1.0COG, or they may propose some sort of profit sharing agreement which cannot exceed 1.2COG in order to avoid selling items at a financial loss to Breadroot when they are purchased by members who have earned a 0.3 discount. Expectations regarding the timing of reimbursement (weekly, quarterly, etc.) and the currency accepted (check, credit on a pre-pay account, etc). The ideal consignment relationship would be to provide 1.0COG in the form of credit on a pre-pay account, though this may not be appropriate in many situations. |
| Describe liabilities involved with the display and sale of the consigned items and how they will be allocated and minimized: | Items with a high cost density are at greatest risk for loss. If inventory is maintained on a deficit of initial display basis then Breadroot is liable for theft or other loss of goods. When inventory is maintained on record of sale then the consigner is bearing liability for loss. An enclosed or locked display may be appropriate to minimize liability and determination needs be made as to the party responsible for obtaining and maintaining special display cases. Methods for reducing price on items in the situation of a short or expired date are to be defined and must remain equitable and accountable. Description of liability in the case of goods becoming damaged while on display must be made. What risk do the goods pose to consumers, and how has that liability been managed by the applicant? |
| (Potential liabilities include loss, damage, expiration of dates, injury to consumers, staff or Breadroot property) | |
| Describe the expected duration of consignment and the circumstances and methods under which this agreement will be altered or discontinued: | Requirements of Breadroot may change in regards to the "fair price" markup, overhead expenses, limitations on store space, or opinion of members regarding the products offered. It may be necessary for Breadroot to terminate a consignment agreement and the requirements regarding equity of timing and liability must be defined. Similarly the consigner may elect to terminate the consignment process and the equitable process and timing must be defined. [Examples include: !. the decision of the BoD that display space cannot continue to be given to a consigner that is generating low revenues, yet that consigner has recently invested in a large amount of perishable inventory in anticipation of use of the display space. 2. Consigner required Breadroot to construct unique shelving for display of product and then chooses not to display or sell product.] |
| Signature of Applicant: | |
| date: | |
| Acceptance of BoD with/without ammendments | |
| date: | |
| Signature of Applicant acceptance of ammendments (if applicable): | |
| date: | |
| Entered into the BoD minutes (date): | |