I just had a good chat with my pal Jen Mecca. She’ll hopefully chime in here at some point but we talked about the wholesale thing, so I thought I’d put some of it out here.
I am still getting my feet wet in this market so keep that in mind. I do welcome those who have had more experience to comment. That would be helpful to many of us.
My perception is that wholesale buyers are gallery owners who care about art and craft and the artists who’s work they carry. (That may not always be true) They are there to help us and promote us and our work. If they are willing to buy our work I’d say it’s up to us to make the best we can at any given time, to be punctual with orders, and have good relationships with the galleries that are putting our work out.
Jen made the point that often times many of us, when just starting out, are willing to do just about anything to get our work out. I think that’s true. As we become (hopefully) more successful in our careers we begin to care about having our work move out into more spaces and taken more seriously. (Not everyone of course goes this route and does just fine).
I want to clarify that I am talking about retail art galleries here. I’m not speaking so much about a gallery that is your “representative” in the sense that many are for painters and sculptors. (Actually, clumping ‘galleries’ all together in one word is probably too general anyhow)
Jen and I wondered if other artists out there have noticed that some buyers are now wanting to consign due to the lower economy. Anyone had that experience? How do you feel about that?
Also, when a gallery does buy work at wholesale, 50%, I usually expect it to be marked up twice that. Should a gallery notify the artist if the work is going to be sold for more? I have heard people say over and over, “don’t under sale your galleries.” (For instance, I shouldn’t sell my pots from my showroom or at a craft show for a lower price). If that’s the case then should the gallery be allowed to mark it up? If they have prime real estate in NYC should the pots be more there than in a shop outside of Atlanta? (not that I have work in either of those places!)
Exclusivity seems to be a big issue too. I am okay with agreeing to not having work at a competitor’s space that is nearby. How close is ‘nearby’? Same city? Same zip code? How does that work? I don’t think there are any set rules. And should I grant a shop exclusivity if they are consigning my work? I think I’d be more willing to grant it to a wholesale buyer.
Still, it’s all not very clear what the ‘rules’ are or if there are any. It seems to me that it’s up to the agreement between the artist and the shop owner. Like any relationship things can go smoothly, or take a tumble.
Often we are asked to sign a contract with a shop or gallery. Should we as artists have contracts of our own? Why not? What are our rights as the creators of the work we make? Shouldn’t we ask for the very best that we, or our work deserve? Once the work sells to a shop I guess it’s theirs. True? Anyone have anything like this?
I hope I’m not muddling around too much here.
I feel like I have good relationships with the few shops I work with at the moment. I am willing to make things work out best for both parties involved. I think communication is important and any problems should be worked out as they arise.
As for taking orders I know many potters have their own methods. Currently I have a $500 minimum order for the first order (that would be $1000 worth of pots, retail). I expect payment to be made upon delivery. I have a wholesale sheet with my pots listed and all the other pertinent information. I charge actual shipping costs plus a 6% packing fee. I don’t have a minimum for future orders. I also give 30 days for payment on future orders. I do make exceptions sometimes with the minimum and I’ve worked with people on payment too. I figure I will need them to be flexible with me someday plus I’m just a nice guy, you know.
If pots are delivered to a gallery should there be a ‘delivery fee’? A bit less than the shipping cost? I think some artists make a big run and deliver to several galleries along the way. What if a gallery owner comes and picks up the order? They don’t have to pay shipping, I don’t have to pack it for UPS or USPS. That’s pretty good for both of us.
Well, that’s all for now.
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I started to write about your last post, regarding consignment, but let me just make a few quick comments and move on to wholesale.
1. Consigning is rarely beneficial for the artist; however, if you are working with someone nearby to sell special, one-of-a-kind pieces, it may be worth it to you.
2. Retail shows have consistently gone down in profitability since I stated selling pots in 2001. In general, you are lucky if you are selling at wholesale by the time all the expenses are calculated.So, on to the subject of wholesale. Over the last 5-6 years, I have sold my work to more than 80 galleries and shops. In a given year, I may ship to 30-35 galleries. I developed this buiness in a variety of ways, including advertising in trade publications, visiting shops in person or on-line to see if my work would be good fit and then sending promotions packages. Needless to say, you must follow up! I hate it, you hate it, but it must be done. I have also participated in an expensive wholesale shows, ACC Baltimroe for the last 3 years. I will not be going in 2010 because the economy is still so ‘off’ that I did not apply. Each of the 3 years I have seen a decline as the economy cooled. I also belong to an on-line wholesale market.
I try to make sure I have a good on-line presence, but do not see retail online. This is a big turn-off to most gally owners. When I do have calls from people who have bought work in some gallery and want to deal directly with me, I do everything possible to refer them to one of the shops that carries my work. I never post retail prices online.
Now we come to the issue of their retail pricing. I don’t consider it to be any of my business! As artists, we have no way of knowing what the gallery’s overhead is. Employees, advertising, rent and utilities are just the tip of the iceberg of their expenses. I set my wholesale prices based on what it costs me to make the piece and what the market will bear, not half of what I would like to retail it for. Generally the shipping will run around 15% of their total (I cap it at 17% unless they are on the west coast regardless of what it costs.) Most galleries will sell your work for 2.10-2.20 the wholesale cost. Whatever they have to charge is worth it to me, as long as I have set reasonable wholesale prices. I don’t have to have rent a storefront, hire sales staff, pay their taxes, etc., etc. etc. I really value my relationship with many of the galleries I work with, and when I have ideas about changes in my line each year, I often consult with them.
I vary my minimum based on the economy and my need to sell. It stared at 400 and at currently is $281, because I offer a starter package at that price. Mimimums are about more than just selling. They are also about having enough work to make a decent display. Experienced gallery owners know and understand this.
Now my brain has run dry about all the things you mentions. Perhaps this will help or be food for thought. Please forgive the typos! -
eek! One more comment. Exclusivity. A current problem I’m trying to figure out how to address. I have never had anyone ask for this. I think you would have to have a long term reationship and they should be buying a lot form you before they could request or expect such a thing. I have customers like that, and I wouldn’t dream of selling to someone else in their locality.
That said….I sell to a lot of galleries and sometimes my 50-something year old brain gets wonky. I just realized that I picked up new gallery in the same city as another I have shipped to several times in the last 2+ years. I looked up both addresses online and they are about 3 blocks apart! Now the newest of those just sent an email saying that they were selling a lot and she would order again in January. My guess is that she will sell more than the people I was already working with. I am having an ethical struggle with myself about what to do. -
I think Kim has some great points here. When I do get amount to chime in on my blog what truly comes to mind for me is that we all are so differant with what type of work we make. How fast we produce it and what kind of relationship we have to gallery owners. Many thoughts on this!
Kim..I enjoyed reading your reply! Jen -
Thank you for the great posts and comments on selling. I’m new to selling and struggling to find the best way to market my work. All your comments have been very helpful.
I’ve been working on a post on my blog about selling. For me the biggest question (because I have a non-pottery job and am only trying to defray expenses rather than live on pottery income) is how much I should let my desire to sell dictate the sort of work I produce. I’d love to hear your thoughts on that.
I also struggle with pricing. I do mostly woodfired work, and find that people tend to price particularly high for woodfired pieces. Do I have an obligation to other potters to keep my prices at the market level? I’m sometimes tempted to lower prices just to get the stuff out the door. But I also understand the importance of not undervaluing the market as a whole. Any comments would be appriciated.
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Hi again Ron.
Hmm, I’ve had more people agree to buy outright this year even with the economic situation, this could of course be for many reasons: the fact that I’ve been around a bit longer / got a bit of a reputation / personally being stronger at saying no to people wanting SOR / getting noticed by a different class of shop/gallery.I’ve had people buy my work before now but then I find out that they are struggling to sell it. This tends to be small gifty type shops which although the owner loves what I do price wise it just doesn’t fit with the restt of the things they sell and the type of thing that their customers are looking for. You know my £20 mug against 6 tartan toilet roll holders for £3.99. I did trade fairs for the last couple of years and am getting much better at spotting that sort of gallery/shop and then putting them off in a gentle sort of way. I have also considared putting a recommended retail price on my trade price list because some of these smaller gifty type shops don’t mark up the full 100% that others will and that my trade price is designed to deal with. The bigger places in teh UK of course have to add VAT onto all their prices too which can be a bit scary when you see the final price.
I have started issuing a contract of sorts to people who are new to me, especially if it is SOR work. If people are buying outright then the first order I have a minimum order and they have to pay by pro forma invoice,, ie up front once the pots are ready and then once payment is cleared I send the pots on. After that, 30 days payment Ron like you. I think it is perfectly reasonable to ask them to agree to a contract too, it shows that they are going to work for you not just get their free display if they agree to it I think.
Was there anything else? Sorry can’t remember, brain fried now. This is a great series Ron, keep it up.
h -
my take on wholesale pricing and undercutting galleries/shops is outside the norm and i’m probably in the minority. i have three different pricing structures and i’ll use a basic mug as an example.
1.) showroom pricing- this represents the least amount of effort and expenditure for sales. our only “marketing” expenses are when we send out postcards for our homesales or turn the lights on if it’s dark, mostly it’s word of mouth and emails. mugs sell here for $15.
2.) art fair/etsy pricing- there is a fair amount of time involved in both of these. it takes a long time to photograph and upload 20 pots onto etsy. likewise with larger art fairs you may have to make $600-800 just to break even. so we up our prices about 20% for these venues to account for the time and expense of selling here. mugs sell here for $18
3.) galleries/shops- time-wise getting pots off to galleries is somewhere between the first two options but the kicker is that i won’t get full price for my work. i only deal with a few shops and they are either 50/50 or 60/40. so if i take a $15-18 mug and go 50/50 i am only getting 7.50-9…that won’t pay the bills. i have to get at least $12 to make it worth my time. so my mugs go for $24-28. i’ve heard the argument that when wholesaling the gallery/shop is taking care of all the expenses in marketing and selling the work…though this is true their costs are significantly higher than mine. i don’t have a retail store with employees and utilities to maintain. i don’t feel that all those expenses should come out of my check but they do need to be covered so a little bit higher price and everybody comes out happy. so yes, i do undercut my shops. on top of that none of my galleries pay for initial shipping. if i did straight 50/50 off my showroom prices on $500 worth of pots i would get $250…minus packing materials, maybe $10…then shipping, maybe +/- $50…and i’m lucky if they even paid for them up front. so part of raising the price is padding for the shipping, i hear about shops that will pay fees/percentages/etc for shipping but i have yet to find any of those for my work. now, i don’t have any shops/galleries within 100 miles of me…so i’m not really competing. they may be pissed if they were right down the street.i could just straight up charge $24 for mugs…but i wouldn’t be able to sell them here for that price so my prices change depending on where/how they’re being sold.
so that’s my take on that…if i did almost exclusively wholesale then things would be different, but i choose not to work that way right now, things may change. ron may convince me otherwise.
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Might as well weigh in…
I make an effort not to undercut my galleries. I work under the assumption they double my wholesale price and understand that it is often more than this to cover their shipping expense and a packaging charge (5%).
Unless a gallery specifies it would like an exclusive relationship in a certain area, i don’t consider myself under any obligation to provide one. In the past, this has been a zip code only. Anything larger, i would tell them that it sounds great, but lets try it for one year and see how things go. I’ll give one shop exclusive rights to all my work (in my dreams) if they can provide the sales to warrent this. You see what i am getting at… If they can sell so much it makes sense, then it makes sense. If not, a zip code is plenty.
As far as changing prices depending on the venue, i disagree with brandon that it is a good idea. It is not fair to the customer to vary prices that much. Also, galleries do not appreciate it. I have seen some artists deal with this by developing seperate lines of work. One expensive, the other more affordable. I think this is an elegant solution.
As far as wholesale being a good deal or not, i think it is. If you are so successful you have no problem selling all you work retail (this is not a problem i have), wholesaling makes little sense other than a way to hedge your bets against the unexpected. But, for the rest of the world, and i mean the whole world, wholesaling is the way that business gets done. There are a few exceptions (think the Apple Store). Mainly, though, wholesaling is an engrained business fact and i think there should be no debate about whether it is good or bad. It is mainly how things get sold here in America. I say this only to stress that the whole world has come to terms with the terms of wholesaling.
I think everyone can agree that consignment mainly sucks. -
Good discussion everyone. Thanks.
Brandon and I come from the same pottery philosophy (or whatever you call it) so I don’t disagree with what he says at all. As a matter of fact it’s similar to what I did for years and I really had no problems or arguments from anyone.
Wow Kim, that’s a lot of galleries. It seems you’ve got a pretty good handle on it, and I’m sure it’s taken a lot of work on your part to get where you are.
Amy, the whole pricing thing is huge. We had a big discussion on it here not long ago. I’ll see if I can locate the post and direct you to it.
Aaron, thanks again for you input. I used to hate the idea of wholesaling. I just wanted to do retail all the way. But what you say is true I think, it’s the way business is done in the US. I think we as artists may be slow on the uptake sometimes as far as doing what we need to to make money. We aren’t known for being very good business people in general and I for one have always been a bit too romantic about the whole thing.
I’ll just note a couple examples here about ‘undercutting’ the galleries. I once asked a well known, successful potter about how she felt about pricing her work out of her studio vs. the gallery price. Her answer, “They are my pots I’ll do whatever the hell I please.”
I know of another potter who gives 10% off as a ‘reward’ for those folks who make it out to her rural studio to buy pots.
I’m pretty sure (not 100%) that two very well know Georgia potters had what was referred to as ‘One Price’ This was the price pots sold at the studio. Basically you paid the same price regardless of if you were a gallery or a customer. If you were a gallery you took the pots and marked them up. When I bought pots there in the mid 90′s they were very affordable.
There is a Utah potter who does something similar. His pots are marked at gallery prices but there’s a sign hanging in the showroom that says since you are buying directly from him you get a 50% cut. (I’d say 99% of his business is right out of the showroom and he’d rather hit his thumb with a hammer than deal with a gallery)(which probably has kept him pretty sane).
Hannah I still don’t understand VAT so I’m gonna go look it up.
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As usual, ask a dozen potters about pricing, get 12 different answers!
I’m in the minority with Brandon — “my prices change depending on where/how they’re being sold,” too. For the last 10 years, I’ve sold most of my pots from my showroom and website; occasionally from shops/galleries, and a few in exhibitions. I’ve never done wholesale, and just a few retail craft shows. It’s probably worth mentioning that making pots isn’t my full-time gig or only source of income.
Here’s my ever-evolving approach: Pots in my showroom are the least expensive — that’s essentially the baseline price. The same pots on my website are generally about 10% more, to help pay for the time and expense of shooting and editing photos, posting items online, managing inventory, fulfilling orders, packing and shipping (Brandon’s 20% is probably closer to a break-even adjustment). The same pots in local shops or galleries are slightly more expensive, perhaps another 10%; in a gallery or show that I have to pay to ship to, a bit more again.
So for example, the most expensive pot at my sale last weekend was a large lidded jar from my most recent salt firing. It was easily my favorite pot of the group, and I would have been happy to send it to the best quality exhibition I could get into. From my showroom, it sold for $100; if I’d posted it to my site, I would have marked it $110-125; if I’d sent it to a first-rate gallery like AKAR — not that they asked, mind you — more like $140-150.
But as I said, I don’t have much work in galleries, and it may be true that they don’t appreciate it. However, I think that whether they’ll show my work or not probably hinges on more important factors. I don’t think a reasonable gallery owner in another state would care that much that someone can drive to my showroom and buy it for less, or save a few dollars to buy it from me online and paying to have it shipped.
It seems to me that the idea of undercutting a competitor suggests equal value; the price of an orange is only marginally related to the price of an apple, so to speak, because they’re not the same thing. I think it’s a mistake the see a pot in one venue as equal to the same pot in another venue.
Likewise, it doesn’t make sense to compare prices to things that aren’t equally acccessible: the price of a widget in New York doesn’t necessarily relate to the price of a widget in California, unless the difference is so great that it’s cheaper to ship from the other coast than to buy local. With heavy, fragile things like handmade pots, location matters.
Aaron said, “It is not fair to the customer to vary prices that much,” but — at least in my case — I actually think it might be more fair. Buying that jar from me directly takes the most effort/expense from the average customer. Buying it online is easier and adds all the beneifts of web shopping — infinite selection, from any location, anytime, in your underwear, etc. (Those are offset some by the negatives — shipping cost, shopping from photos instead of actual objects, delayed gratification — but the history of e-commerce says we’re all getting used to taking those things for granted.) Buying from a gallery like AKAR is easier still, if you happen to live near one, and adds a variety of perks: an selection of quality work from a wide area, a refined retail experience, regular business hours, perhaps some prestige (if you’re into that kind of thing).
So while the customer online or at the gallery certainly doesn’t want to pay more, it seems entirely fair to me that they do so — they’re getting more in return, or at least avoiding the “costs” of buying direct.
Communicating that to customers is probably a much harder trick to pull off; perhaps it’s best to explain it from the perspective of extra costs to the potter, as Brandon did. Or, as in Ron’s anecdote about the Utah potter (Bennion, perhaps?) who marks them with the gallery price and then makes the local discount explicit, treat the gallery price as the norm and the others as the exception. I like how that inverts the standard assumptions.
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Thanks Scott!!
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Just a quite note as I’m reading through these very thoughtful responses.
It is my understanding that galleries/shops “keystone” the prices we give them and usually multiply the wholesale price by 2.3-2.5 to cover shipping and handling costs. Of course it is up to individual shops to make these decisions.
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Wow! Thanks Ron for starting up such a great conversation. My one comment is for Amy about under-valuing the market. As a long time potter one of the most frustrating things for me is to have part time potter’s undercut full time potters pricing. It really hurts us all. When the day hopefully comes that the part time potter can quit their day job… will their prices suddenly go up?
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