View Full Version : Need some help with discounting to galleries, etc
03-20-2004, 12:02 PM
I received an email yesterday from a woman who owns an online jewelry gallery and she wants to buy about half my inventory at a discount to resell in her gallery. I'm nervous about posting this to a public forum because I'm not sure where she found my site... but I keep trying to write a response to her and get stuck - I need to talk about it with people who have been there/done that...
I'm very flattered and encouraged that she thinks my stuff is nice enough that her customer base would eat it up, but I really don't know what to do.
Half the day I think, well, I could offer her a 10% discount and still make a very little profit. The other half of the day I think, no, I spent a lot of time making and pricing my items and everyone keeps telling me my prices are too low to start with. If I offer a discount then perhaps I don't value my time and work very much. And if she thinks this will sell on her site, then why wouldn't it sell on mine for my prices, given the time. In fact this is where I'm leaning, but my online store is so new, I have not had a chance to test my pricing and ability to sell yet.
I'm confused. Can anyone offer any advice?
Thanks so much,
03-20-2004, 12:21 PM
I totally understand your dilemma. Before I get into a long winded advice write up, I would suggest offering her a few pieces to start with to see how they do. If they sell, than you can make more or sell her more, and adjust your price accordingly.
I also have on online gallery, and it's been up since January, but as of yet, I've not had any buyers. My programmer assures me it just takes time, and I'm starting to finally see a steady stream of traffic. It takes 100 shoppers to get one buyer. Isn't that insane??
Anyhoo, as far as pricing your work, there's a few great articles out there on how to price your stuff effectively, but I'll have to dig around for them. However, to start you off, you need to be sure that you're marking your wares up high enough that you're not hurting other designers in the same field and devaluing the market, as well as making back the money you've invested in the piece and paying yourself to boot.
The simplest formula I know for this is to price your pieces right down to last inch of wire, or whatever you use. Once you know what your cost was to make the piece, then you triple that and add in your labor costs. That's retail. At least, that's what I've been told.
And to sell wholesale, there's a huge myth that you have to discount it by half, but that's not true. You can discount it as much or as little as you and the buyer feel agreeable on. Don't sell yourself short, though. That's the real advice here.
If she wants that much of it to sell and believes in the product, then you must believe in yourself and your designs just as much, if not more.
I'll see if I can dig up those Proper Pricing articles for you!
03-20-2004, 12:43 PM
Thanks Danielle, I really need to get a sytem together for inventory and pricing out to the last inch of wire. I can't imagine how people do it - I've got a couple thousand dollars worth of stuff and none of it is inventoried.
My pricing system is very fuzzy. I add up a rough estimate of what things cost. For my lampwork, I estimate what I might have paid for the same bead on ebay. Then I figure how much time it took to make it and times that by my hourly rate, which let me tell you is about 1/4 what I used to make designing websites! But this feeds my soul and websites no longer do... so whatchagonado? Then I take that price and compare it to what I think the market can bare and adjust accordingly if I think I need to. There is no double the materials or x3 the this or that.
I do need help - if you find those articles, I would really appreciate it. I also have a couple of books about making your craft a business... will have to dig those out too.
Meanwhile time is ticking and I need to answer this woman...
03-20-2004, 12:51 PM
And I really hope I'm not underselling and devaluing the handcrafted jewelry industry and hurting other designers. I would hope that someone would tell me if I they thought I was. And I would appreciate it if people thought my prices were too high as well. I can take constructive criticism…
03-20-2004, 01:09 PM
Lol...Hang in there hon, it's a tough one...gimme a sec, I'll see if I can dig up that article right now.
OK, here's a portion of an article by the Preston Reuther, Wire Scultpure dude...of course, this is an article about selling wire jewelry, but the method is the same for pricing purposes.
Different formulas for pricing your work:
In our travels my wife and I met a wonderful lady who was gracious enough to share her whole system of retail and wholesale pricing. She was 72 years young and a newcomer to wire sculpture. She worked a small but wonderful flea market with many antique dealers. This wire artist was an excellent record keeper, keeping an index card on each piece of jewelry she created. She was a talented beader who took up wire jewelry to compliment her beading and her income. On an index card she noted exactly what she used to create each piece of wire sculpted jewelry, noting the length of wire used in each project. She then figured out the cost of each wire in the different gauges she used. She also wrote down the cost of the gemstones or accent stones. By doing so she could calculate the exact cost of each piece of wire jewelry she made. -------------To determine a retail price she would triple the cost of all material and add $20 for her labor. I didn't ask her how long it took her to make a sculpted pendant but I would assume she paid herself about $20 an hour. Several shop owners saw her work and bought it on a regular basis. This is how she determined her prices. --------------Let's say she had a $10 cost of material in a pendant. For retail pricing, the wire sculpted pendant would be $10x3 plus $20 for a total of $50. For wholesale pricing, she started by doubling the cost of the material. Which would be $20 and she would negotiate her $20 labor cost. In other words if a shop keep wanted one piece the cost would be $40 but if the shop keep wanted 10 pieces she could go down on her labor to $10 and the pieces would be wholesaled at $30 each. WHAT A WONDERFUL SYSTEM. Well thought out and quite efficient.
And here's the link to the whole article if you want to read it. I refer back to it a lot when I need a pep talk. LOL. http://wire-sculpture.com/price.html
I'll see what else I can dig up!
03-20-2004, 02:02 PM
OK, I had to end the stress.... after adding it all up I offered her a small "quantity" discount that I would be ok with that I don't feel would really compromise my self worth and now it's in her court. I'll be fine if she turns it down or accepts it, either way :)
03-20-2004, 02:31 PM
Thanks for the article Danielle :)
That just seems too simple. Plus I'm not that organized. I need to work on that.
The more I think about this the more complicated it is.
For example. My little online store doesn't cost me much because I do it myself. But it does take time - writing the descriptions, photographing and editing the shots, uploading, internet marketing, packaging up and mailing, etc. etc. But this isn't ideal because jewelry has to be touched and worn to be really appreciated. So this isn't the ideal way to sell it.
If I were to sell on ebay it would take all that time, plus about 20% in fees.
If I were to sell in a booth at a show, I would have show fees, travel expenses, and the one-time cost of booth/display stuff. Plus the time of sitting around there. Plus maybe the cost of a helper... but this gets jewelry into people's hands. Of course you have to worry about theft.
If I were to sell to a gallery, once the original relationship was established, it would be pretty easy - make the pieces, deliver them. The gallery has the overhead of the space and paying a sales person, etc. But unless your items are high priced/ high end, you aren't getting a whole lot for your work this way.
So, other than selling wholesale, gallery selling does have it's appeal - would leave the artist with more time to create... in fact is sounds ideal for higher priced items... but for the $50 bracelet... I don't know - I think in the end don't you end up making about $5.00 an hour?
Ok. It's saturday and the sun is out - I have to go play with my kid now. He just gave me a hint I can't ignore - he just threw a ball in the house and broke a framed piece of artwork :( Glass everywhere :(
03-20-2004, 02:55 PM
DUH! I'm such a boob sometimes. I got all these links for you earlier when you were desperate, but I think the phone range, which interrupted my thought process, and then I looked at the clock and saw how late it was, and I had to run an errand b4 Ian's naptime, and now I'm home again and just realized I never hit "submit reply" on my thread!!!!! :rolleyes:
Anyway, here's what I -thought- I posted earlier.../smacks forehead.
Here's another from another artist...good tips.
Hope that helps Pam!
I say start off with a few pieces and go from there. If it's profitable to both of you, she'll be back and you have a win/win situation then.
03-20-2004, 03:26 PM
Thank you for the articles, and don't worry about the timing - It's going to take me more than a weekend to figure out pricing and what my "plan" is. I was so sure wholesaling was not in my plan, but maybe I need to rethink it.. anyway thank you so much for being here and sending those articles and throwing out your 2 cents! I feel much better having made a decision and written her back - you don't know how many times I woke up last night and this was the first thing I thought of. I like it much better when I wake up wondering how my beads in the kiln are doing...
Ok, gonna print out these articles and take them to the park thanks again!
03-20-2004, 04:34 PM
I just started back into making jewelry again after more than 10 years away from it and I want to sell it when I am satisfied with the outcome. Hopefully, being an artist already, this won't take too long :D ???
This thread with the links provided has answered many questions that have been rumbling around in my mind lately about pricing, costing out, wholesale, retail, inventory keeping etc.
I have been considering the purchase of software by www.jewelrydesignermanager.com when my budget allows to track my business "in an organized manner" !!! Right now it is through receipts and hand written lists. I am amassing supplies and instructional books at the moment in preparation for regular production.
After reading the recent thread on booth design ideas, I found many very helpful suggestions along with pictures of successful booth setups.
Thank you so much for providing this most valuable pricing information. I printed out ALL of it for further reference.
My jewelry-making skills are still quite elementary, but I'm learning more and more each day by just doing it and by reading all the threads on jewelry making on Wet Canvas and other web sites.
The books I have ordered on making polymer clay beads, etc. haven't arrived yet. I just purchased a jig to get me started on wire ornaments and the like. Because I have a major investment already in other artistic media, I am going to start with polymer to see how I like that. I probably already have (with my old beads from over ten years ago & the new beads I have purchased lately), several hundred in cost outlay.
Would any of you have a recommendation on what books would help me learn wire sculpture/jewelry making/metal working and the like?
Again, I am in awe of all the gorgeous works of art produced by you talented people and shown on these boards. DROOLING has become a daily occurance with me now that I view the jewelry threads each day.
AAGGHHHHHHH - I am already addicted :D
The artist in me can't get enough of the beautiful colors of beads created and the designs of jewelry shown in the different glass and wearable art forums. Jewelry has always been a passion with me, even before painting and drawing. I feel like I have to follow this passion to where it takes me.
Thanks everyone for such beauty and inspirational work :clap:
03-20-2004, 05:00 PM
I have found another trick for pricing that might be useful for other wearable artists. The work that I do tends to be made up of various elements. Each element takes about the same time to create, reguardless of size. So I price my work by the number of elements. Of course the hardest part was coming up with the cost per element. I charge $10 per element. So a basic pair of earrings, for example, would be be $20 since there is one element per earring. By having a fairly simple system, this helps me defend my pricing when someone wants to know why this necklace costs more than that one. You can point out that there are 8 elements that make up this necklace so it's $80 where that one only has 3 so it's $30.
But it has to be a price that you feel comfortable with. If you feel uncomfortable asking $100 for your work maybe you need to rethink your pricing. Some artists have found that if they underprice their work people are not as interested in it because the artist has cheapened their own work. If you don't value your work why should your customers? Do a little research, see what other people are asking for similar work. Find a happy medium between the low end and the high end that you are comfortable with.
A gallery in another state carries my work based on a consignment agreement. We have agreed to a 60/40 split. From what I have seen this is pretty common. The tricky thing about having someone else sell your work while you are still selling it elsewhere on your own is to make sure that you are not competing with one another. It's going to piss off the gallery owner if I come to the area to do a weekend show and I sell my work for substantially less than she is. Her customers are going to stop buying my work from her and come straight to me. Which, yes, means I'll make more profit on the pieces, but when I go home after the show chances are pretty slim that those customers are going to follow me back to my home state.
You do need to be very careful with your relationships with gallery owners and other merchants that are selling your work. The gallery that I work with held a special jewelry show just before the winter holidays. She invited 9 of the local jewelry artists she carried to participate (she asked me to join since she's located in the town I grew up in). The opening night of the show was a special invitation only cocktail party and all of the artists were asked to come. I had a couple of customers try to find a way to do business with me outside of the gallery. In order to respect my relationship with the gallery owner I had to insist (in a very polite manner) that I would be glad to work with them THROUGH the gallery. In this case I simply consider it a "finder's fee" for the gallery owner. I can't constantly show my work in another state and still produce my pieces and do shows. So she's "finding" customers for my work.
BUT, you must make sure that you protect yourself! Get a contract, both you and the gallery owner should sign it. Both should keep a copy of it. The contract should be kept together with an inventory list describing each piece and listing the wholesale/discounted price and the retail price. Several of the books out there on doing business as an artist have good examples of contracts that you can use. From what I've seen most gallery's that know what they are doing have contracts that they have their artists sign.
I think another thing to keep in mind is the "KISS" policy, "keep it simple stupid!" If you make things, like pricing, so complicated that it's a real confusing mess you'll never do it right and it's going to frustrate the beejeebers out of you.
Lastly, ALWAYS research the people that are interested in buying and selling your work. Especially people that approach you out of the blue on-line. Make sure that they do have a site. Ask around, see if anyone else is working with them, have they had any success? Trust your instincts. If your internal sensors are ringing and the red flags are flying run, don't walk, the other way. Make sure you know about their entire system. I had an online marketing company approach me, they offered what seemed to be a very professional package but they were going to charge ME a monthly or annual fee to sell my work. The other thing was that they were looking for qantities that I simply could not produce. Depending on the type of work you are doing, qantity does not always mean quality. Quality in this case can refer to the quality of your work or the quality of your life (can you honestly produce a gross of necklaces every week AND still enjoy what you doing?).
Just food for thought.
Hope this helps!
03-20-2004, 09:27 PM
Thank you Jen, you advice sounds great too!
And an update in case anyone is following this - she took my offer and bought 7 pieces! :clap: So now I need to get to work and restock my store!
03-20-2004, 11:57 PM
Congrats on the sale! :clap:
03-21-2004, 12:02 AM
That's awesome Pam, congratulations. It's hard work peddling our wares, so sales are always a great feeling.
I've been in a slump since I came back to MI..I'm stuck in the house all the time with my son since the hubby is gone, so it's hard to sell anything this way.
But, I just keep investing energy into the ole' website and hope for the best.
Grats again, I bet you're walking on cloud nine!
03-21-2004, 11:04 AM
Hey Congrats Pam!!!
There is a lot of great information in just this one thread!!!!
What a great forum!!!...don't you think???:D
03-21-2004, 11:27 AM
Hey Congrats Pam!!!
There is a lot of great information in just this one thread!!!!
What a great forum!!!...don't you think???:D
Thanks! And I do think this is a great forum! I'm so glad it's been started and taking off so well!
03-21-2004, 12:36 PM
My braclets are a bit more but I would have no problem giving a nice discount is someone wants to retail them for me....in a gallery I would have to pay up to 50% so that means if I wholesale a braclet to a store for 80% I have to know the thing will sell for at least $160 and if you don't think it will then you have to lower your price till it will sell. Right now mind are selling for about $100 retail so for commision I would only get $50 to me thats not enough....I am trying for less commision say $30 then I get $60 and thats more of where I am looking.....that would be about the spot I would also wholesale for. At least thats how I come up with my pricing....
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