Another Pricing Topic

[Kohaku]

 

In a personal show situation ... Be it a home show or a craft fair ... You are much better off throwing in a small thank you piece instead. One potter I know makes little cheese spreaders, another makes tea bag holders, another makes a little thank you ornament. Fills the kiln spaces easily, made very quickly ... Everybody likes getting something free. A way of giving people a deal without compromising your worth or your relationship with your galleries.

 

In Japan this is common practice... called "Sah-bee sue" (Japanese pronunciation and addoption of the word "Service").  I do it also.  Goes WAY further than a few bucks "discount" and sends a completely differnt message about you and your work.

 

best,

 

...............john

 

 

See- this is why I come to this forum. Such a splendid, elegant solution...

[Cass]

.... 'get it from me here, cuz next week in the gallery it is going to be a bunch more!"

 

What would you think if your galleries slashed your prices to the price you had a the craft fair and cut your share accordingly??

i don't consign, i reject the business arrangement where the artist risks all, and the gallery owner risks nothing. if they like the work, and believe in it,  and the artist enough, they should buy outright, and be thankful for the quantity discount. the price they put is then their business, if they can get 3 times what i needed, then more power to 'em.

 

the quote above was to a collector who was with me long before the gallery.  i never consent to exclusivity either, and this is made clear, the gallery take it or not, and they do.  the 'system' is skewed in favor of the galleries.  if you consign 60/40, or let yourself be taken for 50/50 , AND grant exclusivity? you are a fool, and must not think very highly of yourself or your work.

[Mark C.]

There has been a lot written bout selling models

When one 1st starts out and is green selling anyway possible has merits.

As you develop it slowly changes.

Depending on what you make with clay has much to do with how you sell

For me its functional ware-if I made one of a kind sculptures I would have a different path of sales-so it matters on what you are trying to sell.

to say this is nuts or I will never do that is not a good thought process its about what and how one wants to sell.

In my time I have sold all ways from cooperative co-op galleries to wholesale to consignment to direct sales at shows and a few in between.

I have been burned with wholesale but never consignment

What is important to me is to have a diversified sales approach

I do some shows for my largest sales income and do some local wholesale for some irregular checks and have a few consignment for some very steady checks-how steady you ask well one was 38 years the other two are in the upper 20 years-I trust them and its rock solid-the checks come every month and its not weather dependent like outdoor shows can be.

Being diversified has worked so well for me i cannot speak enough about it for anyone in a clay business.

I have seen to many fall off the edge when their one sales source dried up or the market shifted and sales stopped or slowed to crawl.

Now as I down size the amount of pots I am completely in charge of what I want to do-I will always stay diversified as this makes the most sense in today's business world.

You just have to me very smart about who you choose to do business with.

Mark

[Wyndham]

Whether consignment or gallery, understand that the shop also has cost.The cost start at rent, electricity, phone: on to employees, taxes, credit card fees(5-7% when you add all the added fees, taxes, ins, etc). These are just a few of the cost of any shop.

How about the days that no one buys, the cost still go on

 

This weekend we will do a pottery show and the booth fee is $550 for 2 days, Most shows are higher than this but it's close and good sales. I've got to sell $1100 or more to pay the booth and cost of goods.

 

I too have been burned by a bad wholesale check or by customer that claims a broken piece or one not shipped. These are not just in crafts but Walmart has the same problems, it's the cost of doing biz.

That 40-50 % is no longer the real markup. If you buy for $10 you need to sell for at least $30 or more to be close to profitable.

In the last 13 years, the value of the dollar has crashed. $350 bought an oz of gold back then, now it's around $1400, that means the dollar is worth pennies compared to the year 2000.

 

This is not new, everyone here knows it, it's just that hidden inflation creeps up on us and steals our profit not realizing what is really happening.

Wyndham

[GEP]

Thanks for sharing this Norm. I'm going to use this example with my students.

[Guest JBaymore]

Business is business...... art is art. Selling artwork is running a business, not being an artist.

 

Good stuff to share, Norm.

 

best,

 

................john

[StaceyB2]

 This is beyond the value of your pots- it sounds like you want to make positive contributions to the world and you see making your pots very affordable as a way to do this and you have ethical blocks keeping you from charging their value. Really, if you consider the time and money invested in college, equipment etc you might be losing money on your pots.  It takes an incredible money to raise a family and live ethically these days (unless you have your own self-sustaining farm)  so if you charged what your pots were worth perhaps some of that money could go back into supporting other local artisans and business people and local farms operate sustainably.  Or, you could donate a $1 from each pot sold to a really worthy cause. Or, you could volunteer in a soup kitchen a few times a month and every time bring a bowl to leave.  

 

I do not think it is fair to your family to lose you to time spent in the studio to work for less than minimum wage.

 

My husband and I are working to get studio space set up for me.  Our budget, as a result, is beyond super-tight these past few months and I am so grateful for his willingness to take a risk on me.  I am working super hard and being super critical of myself to push my work to a higher level, sometimes at 2:00 in the morning when I really feel like being in bed,  for my family.  I will take whatever I can get for my pots and if I ever can generate a decent income I will not feel bad about it but use the money to pay my mortgage, live more responsibly, and support great organizations in a way that is not possible for my young family right now. 

 

Plus, there are a lot of fast and easy to make items that can be made and sold  for a few dollars that will give the public a connection to handmade work.

[neilestrick]

Working out the best pricing for you can take time, like maybe an entire art fair season. A couple of years ago a customer of mine asked me about pricing, and I told him I thought his prices were too low. He spent all summer raising prices incrementally until he found the perfect balance. He settled on prices that were about 30% higher. Now he doesn't have to produce as much work to make the same money. Perfect.

[Guest JBaymore]

Now he doesn't have to produce as much work to make the same money. Perfect.

 

One $100 pot versus ten $10 pots.  Both $100 gross.  Additional materials, firing, and equipment depreciation on the $10 ones....... -X$   Additional wear and tear on the body........ priceless.

 

Humm..........

 

best,

 

.............................john

[neilestrick]

I had a guy talk me down on a small pot at a show this summer. I was fine with giving him a discount, as the pot was quick and easy to make. He was about 60 years old, dressed somewhat shabbily and riding a bike. When I looked at the name on the check it was Dr. whatever. Turns out he was a heart surgeon, probably made a million a year. I was so angry that he had so little awareness of our very different economic positions. I didn't say anything, of course, but I fumed about it all day. It's that kind of disrespect that gets me the most frustrated. People think we're out there doing the shows as a hobby to pick up a couple extra dollars. So I tend to only discount to young people, college students, etc, who more than likely cannot afford much.

[Guest JBaymore]

Neil,

 

The rich tend to get richer by not spending what they don't have to.  They know how to "play the game".  I believe that I've seen studies that show that the more people have, the more they under-rate their own affluence and the more in addition that they want to have.

 

On another related subject.........

 

One of the things that happens all the time is that potters sit there demonstrating at the wheel at fairs and festivals.  Nice.  We show the "magic".  Garners interest in the craft and shows our skills. Attracts people to our booths/displays/studios. 

 

Now as we all know, when you are a skilled pro, throwing a form like a mug/cup/yunomi is litterally about a minute's time.  In fact ...... if you are really good..... less than that.  For some....way less than that.  Forms spring forth literally as if by magic.

 

Bang... all those folks watching are AMAZED at your skills.  Pots pop off the wheel onto the ware board.  Impressive.

 

BUT............................

 

People are out there watching this demo stuff (or have watched it elsewhere), and then they are looking at your cup display and your PRICES.  WHAT!!!!!  $20 for a cup?  $40 for a cup?  Clearly this guy/gal is raking in the dough!  I saw hem/her make one of those in a really short time.  The accountant-type in the audience has already done the math in his/her head "Let's see one minute + per mug that is maybe 40-50 of those per hour..... times $20 each.... holy crap that guy is making at least $800 of mugs in an hour. Even with a little more work involved.... WHAT a deal".

 

Now WE know that the act of throwing forms itself is only a tiny, tiny, tiny miniscule fraction of the overall time that goes into what we do on a weekly/monthly basis.  But the public does not know this.  They have no real way to userstand this stuff....... the use of the hand to create and the act of "making things" is not much a part of the current educational upbringing of the average person anymore.  So they can easily be misled by those magical looking demos.

 

When I am demonstrating, I always talk overtly and clearly about all of the other time it takes to "be a potter", about all of the other stuff that has to happen to those forms I am making, and how I wish that all I had to do was throw all day/week/month/year.  And about how misleading a demo like this actually is to the overall reality of the production of handcrafted claywork.  I beat on that subject.

 

So it is possible that Doctor you mentioned above thought YOU had the great gig.    Not only did you make a good rate of pay, but you also got to "play with clay" (don't get me started with THAT tag-line we curse ourselves with      ).

 

best,

 

............................john

[phill]

wow. this discussion going on is amazing. I love this forum. 

[phill]

After reading everyone's responses, it seems like a main point being made here is that everyone has a different idea of what success means for them in their pottery careers. It's obvious people do what they think is best for their profits/ideals, even if it's breaking some well-established rules or going against common wisdom. Some potters on this forum are very business-minded and are very good at making profit. Others seem to be very concerned with making work efficiently so that pricing and work output makes a lot of sense, and they are good at that balance. Others seem more concerned about getting their pots into people's hands no matter the cost. And still others have more ideas, etc.

[Benzine]

 

 

First of all your raw materials are cheap ... yes, even if you use gold paint, mason stains, porcelain ... whatever, nothing in your studio is more expensive than your time. So time is a big factor in calculations ... but a newbie might only make twelve bowls a day while and experienced potter could throw that many in an hour. The newbie does not get to charge more just because it took longer ... so that throws off pricing equations.

 

I don't know about that.  Just think about it.  Each customer, who buys one of your early works, gets to be a part of your growth.

Just look how valuable an early Van Gogh, or Pollock painting is now.  What I'm saying is, why take the risk, that you didn't buy a potentially valuable item, just because it might be worth absolutely nothing?

 

That leads me to my sales pitch, who wants to invest  in some potential valuable work/ worthless crap?

[DirtRoads]

My approach to pricing is very specific.  Specific but not necessarily the right approach.   I ran my other businesses by % sales margins, which is what I am doing here.  No idea what the industry margins are.

 

Clay - 6 to 7%  (I pay $20 for 50 lbs delivered so a box yields $320 -$350 - I mentally calculate this every box)

Glaze Materials 8 to 10%

Electricity 5 to 6% Costs $10 to $12 to run Kiln.  I just double this estimate for the bisque firing, even though I get more items in bisque.

Margin for variable production costs  23%  I round this up to 25%.

I also consider these other factors in pricing:

Kiln Load -  Every kiln produces a minimum of $500 in serveware (platters, plates, bowls).  Most kilns have $600 plus with the addition of jewelry, crosses, ornaments.  Each kiln has 6 shelves (metal thanks to Mark C's recommendation on Advancer I get 6 vs 5 shelves)  with an absolute minimum of $70 on a shelf. On average shelves produce $80 to $90 and more with jewelry.  Example:  I just loaded a kiln with about 80 pieces of jewelry making kiln production about $1000. I carefully note the amount of kiln space an object takes up and price accordingly.  I use 3 inch posts on 3 shelves, 4 inch posts on 3 shelves.  The top shelf has 6 inches of working space, allowing for the tallest pieces.  If a bowl extends beyond 6 inches I put a premium price on this item.  I don't differentiate in price for the shelf height. 98% of the kiln loads are loaded in a "pattern".  Placing the same combinations of items on shelves.  The height arrangement is almost always the same.
 
Production Rate - Price is based on a production rate of $100/hour.  If I can't produce $100 an hour of a particular item, I raise the price or drop the item from the line.  Of course if I'm making something new I don't use this price.  Example:  I threw a casserole dish and made a lid for it.  Took 2.5 hours.  Certainly couldn't get $250 for that.  Sold it for $80.  That was something done for "fun" and "growth"... I don't throw much.

Personal Production - $400 a day - $320 - $350 in pieces, $50-$100 in Jewelry, ornaments, crosses.  Every day I make myself do a 50 pound box of clay which yield $320 to $350 of serveware and I fill in with jewelry and ornaments from the trimmings.

Labor Glazing Costs 14-16% (I have an employee that does most of the glazing and they put out a daily quota within these numbers, usually exceeding it)

I figure in a 10% Operations cost factor.   So roughly I'm "clearing" about 50% with this pricing formula.       I did 3 shows this past year (will cut this back to 2 next year).   I sell most of my merchandise in a 200 sq ft indoor showroom and 400 sq ft "freash air" space, which is about 100 feet from the studio.  We physically walk all the pottery to the showroom.  I'm adding an additional building, which should be finished in two weeks (will post a picture then), which will give me 700 square feet indoor heated/cooled show room.   If I did mostly shows, I would have to adjust prices upward.  The show I do is the Canton Mississippi flea market, which is a one day show, about 40 miles away and I have the same prices as in showroom

Another factor in pricing is competitor's prices.  Most of the potters in my area sell to retail stores.  I sell direct to customers at what is close to "wholesale" prices.  I do not have wholesale accounts.  I carefully note competitor's prices, considering the retail mark up on most pottery in my area.  I sell at these "wholesale" prices to encourage customers to "drive way out here".    80% of my sales are to customers outside my zip code.  Most of them drive more than 1 hour to reach the store.  Average sale amount Jan-Sept is about $100.  Average sale about Oct - Dec is about $200.   Last two years we have had a 100% sell through of back stock by 1st week in December.  This year (thanks to kids) we should have stock until mid December.  Of course I still produce weekly after back stock is gone, making pieces that yield the most dollars per firing.

 

My prices are slightly higher than the wholesale price of most small potters in the area.   On one exact size piece I noticed that I am 30% higher than wholesale price .  But when compared to the retail price (assuming Keystone plus $1) I am 30% lower.   As some one on the forum noted, a piece of pottery will get about a 3X markup on the retail shelf.  Thus a $10 piece selling at $30.  I've found shipping on ceramics/glass to run about 30% of cost.  Reps require a 15% selling commission.  If you set up at wholesale shows & sell it yourself, you will inquire the same 15% cost.  So for that $10 piece, it will arrive at the retail outlet at around $14.50.  Double that and you've got a $30 retail price.  This focus on wholesaling to public is one of the primary contributors to the financial success of this business.
 
I have 3 college students (niece & nephews) that work up to 15 hours each (Friday & Saturday).  They do most of my jewelry now.  About half my jewelry does not have clay findings.  But the kids are good for clay work as well.  The general rule when they come is "no clay no pay".  The group puts out at least $1500 of either clay or finished jewelry.  Often they hit a lot higher.  Everyone reports "production" numbers. The kids amuse me because they like to "stuff" production numbers with lots of Mississippi shaped ornaments (done with a cookie cutter).  I've seen them hit $900 production a day.  I don't really enforce any quotas on them since they are often doing non clay work but I've taught them the value of  "making production".  The retail store is quite busy on weekends and they work that as well.  My margin on their work is variable.  I only provide these jobs because of the family connection and they are extremely smart and work hard.  IF I hired production clay workers I would have to anaylze production output & probably increase prices 15 to 25% to maintain the same margin as personal production.  I have noted that production potters that have employees have about 25% higher prices.

My payroll can run up to $3800 a month (not usually this high because the kids don't always work 15 hours a week).  SO, with the amount of payroll, you have to be production oriented.  If I run a full labor schedule the business puts out $3500 a week in FINISHED product.  That 27% ratio is a little high. I would knock that to $4000 a week if it was a long term number but I'm helping the kids in the family with their college expenses so I'm not that concerned with it.  But then I've always found that the higher a business sales are the lower the owner's profit margin.   I'm constantly analyzing prices.  Knocking it up a few dollars here and there.  I have a price increase planned on some items for January 1st.

 

Oh for mug prices, I don't make very many of those but I sell a plain mug for $16.  One with a cross or Mississippi emblem for $20.  Wholesale prices on those range from $10 to $15 in my area.   Mug's are too much trouble for me. 
 

[jolieo]

Hi

Norm what a great story about the shoes! I want to do that!

My husband is a very talented boatbuilder woodworker. I tried to upload pictures to prove it but I couldn't figure out how to downsize in iPhoto . He does stunning work, and cannot sell or market at all. He does not understand who is serious or a tire kicker. He will take a boat out and wonder why it didn't sell on the first showing. Then he gets depressed and doesn't want to show it. Then he fire sales it or keeps it. He will never stop making boats: he loves it, but he might never make money at it. I wish I could find a place that would show his one of a kind wood boats.

Sales and marketing is not a skill we are born with, not for every one . So maybe consignment would be better for some.

When my 13 year old daughter was about three, I wanted anything art so badly. I choose jewelry cuz she only put food in her mouth. She had asthma and wanted to do all paint with me so pastels ,oils ,and water colors were not an option. So semi precious and crystals, glass beads and lamp work, I wanted color! I made earrings bracelets and necklaces. I gave them and sold them and consigned them. For a novice I did just fine. But there was no passion, I don't wear jewelry . I couldn't remember a piece once it left my hands. Someone would wear what I made and I would comment how nice, and they would tell me I made it. I have a chest of beads, any takers?

So it isn't all about money either , right?

And then there is always location. Here in florida that mug you made better fit in their cup holder in their car or it's no sale! In my hometown of NYC , it had to be special, when I lived in ptown it had to be artsy, gowanda ny well there were just poor. New Yorkers might spend their last dollar and borrow more to be trendy, I buy only when I am in love. And I do fall deeply in love w things , like they have a soul from those who made them.

And then there's always the old adage : things are worth what people are willing to pay for them.

I do not believe I can tell you how much to sell you work for. You have to believe that your work will sell for the amount you ask for it, or else it won't sell people can tell. Can't insult yourself and sell it too low, then you will become discouraged and disgusted. Can't sell it for more than the market will bare, some places are still suffering badly and some barely got hit.

If things don't sell and they seem well priced could be a could of things: market is saturated , too many similar items. There is no market cuz no one has ever seen the item and doesn't know what to do with it.

The item does not follow the local aesthetic rules, is rejected.

A little of all above and add a bit of frugal free of spending.

I believe in perseverance , if you love it , keep at it, try to make it work. Ask for help from those around you. It will happen if you keep at it.

I also believe in local farmers market cuz the rent is low , there is repeat customers, and there is time to talk, get feedback. If you bring your baby for part of the day then people might get how you are doing it too. Jolie

[MikeFaul]

In a personal show situation ... Be it a home show or a craft fair ... You are much better off throwing in a small thank you piece instead. One potter I know makes little cheese spreaders, another makes tea bag holders, another makes a little thank you ornament. Fills the kiln spaces easily, made very quickly ... Everybody likes getting something free. A way of giving people a deal without compromising your worth or your relationship with your galleries.

 

We did this for the last 8 weeks, we made a mess of small cups, maybe 100 or so, and glazed them up in 4 different schemes. Anyone who came into the studio received a free cup. One day I gave a lady a cup and she stood in the front yard grinning and crying. I went out to see if she was OK, she gave me a big hug and said it was a beautiful gift and it made her week. She came back in today and purchased two platters for gifts.