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What % Of The Sale Price Do You Receive?


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I've been looking around on line and can't seem to find what % of the sale price you receive when you sell your ware in local shops. Can anyone please give me an idea of what the average might be. It was recently suggested a shop receive 30%. . . I have no idea if that is fair but when i do the math and off set the cost my ware becomes pretty expensive.

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Galleries and shops have varying rates, generally 40 to 50% of sale price -- most seem to be 50%.

 

How do you determine fairness? Rather subjective. Lets say you sell at a craft fair where the booth fee is $50 and you sell $100 worth of pottery; in that example, you got 50% of the sale price (sales - booth fee = your cut). You sell more, the ratio is more in your favor; sell less, and you earn less after expenses. That is the risk you take in selling direct. For that 40 to 50%, you get some else to sell your works, storage of the items while on display, perhaps advertising, etc. There is a tendency to just say, well, I'll just add the cost of the store commission to my normal selling price, which really drives the price up and can make many items unaffordable. Plus, you run the risk -- if you also do craft fairs in the same area -- of undercutting the gallery/shop with a lower direct sales price and possible losing the retail outlet.

 

Ultimately, you need to find a sales price you are comfortable with, one that includes your expenses -- whether a prorated cost of a booth fee or a sales commission.

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You can pretty much assume that a shop will double their cost (at least). So if you want your stuff to move you have find the point where you are getting a reasonable amount for it, but the shop can still sell it. If the cost to the shop gets too high the pieces won't sell,mor they will stop buying. If that price is too low, you don't make any money. Figure out what you can afford to sell your work for-there are several good blog posts about that linked somewhere on these boards-before you go to the shop. Discuss this in detail and get a schedule of prices set in writing before you leave any product in any shop. If you visit later and find they have increased the selling price, your commission wil have gone up, so that's ok. If you are wholesaling, you can then discuss changing the price you get.

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Guest JBaymore

When you wholesale, the shop then owns the merchandise free and clear of you.  They can price it or discount it as they see fit (unless you have some sort of legal contract stating that is not allowed.)

 

If they think they can get 400% markup...... and move the items... they will.  If that is happening, it says you are likely underpricing the work.

 

If you are consigning... look up your state's consignment laws.  And get a written CONTRACT.  No contract... no wares left.

 

best,

 

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

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My consignments run from 20% - 40%. The 20% requires I work the sales counter 5 hours a month otherwise it's 30%. A couple of 30% places, one that's 40% and another that asked me to give her the price I needed and she would mark it up however much she thought she could get for it, this place is an exclusive Pet Only gift shop and she gets my Pug and dog art and nobody else but I sell these. Weirdly enough the 40% place is the most prestigious but I sell the least there. The 30% places I do quite well at.

 

One of the things I do do is try and give each venue slightly different stuff. What I mean is: 1 shop sells just my country bracelets, another my beaded necklaces, or my boxes, or my paintings, etc. This has been working for me and the galleries and shops seem to like it as well. This also helps to negate the percentage differences, someone isn't going into one place and seeing a box for $25 and another place where the same box is $50. I figured out what I think I need to make a profit added a bit of Cush, rounded, added the % and tweaked the price to decide on a price. (Yes oldlady I am increasing my prices on a few of the smaller items so there will be more Cush for me!) Oh and they all have to agree to let me do local festivals and sell my stuff online as well.

 

I have talked with one place that only does wholesale and wants whatever bought to be sold ONLY through them. I told them I could work with that. I need to get a few unique samples made up and see if any of them are of interest.

 

I also agree local is best. I have one place I am pulling my stuff out of because it is just too hard to monitor and special trips to do so cost too much in gas and time.

 

Do I know what I am doing? Heck no, I'm winging it but I've yet to find anartists idiot guide to make a living. I do know I have to be flexible and multi pronged in my approach. LOL I'll let you know if I ever truly feel like I have it all figured out.

 

Terry

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 sounds like wholesale is the way to go?

 

 

 

You have to have your product and price finely tuned before wholesaling.   I have watched about 10 crafters, including 6 potters completely botch their attempt at wholesaling in the past 3 years.  Just this week a retail store came into my retail store wanting to buy wholesale, citing problems with 2 different wholesale potters.  Two potters I know have completely ruined their wholesale reputations because they weren't ready for wholesaling.  These stores won't be giving them another chance.

 

I would suggest not jumping into wholesale before you are sure of production capabilities and consistency of your output.   Also, there is the perceived value issue.   I've seen a lot of craft work and pottery that simply can not command the needed retail mark up of their products.

 

Certainly many of the potters on this board have the ability to  successfully wholesale and I am not implying that you don't.   Just consider.

(wholesaling not the same as consignment)

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Two potters I know have completely ruined their wholesale reputations because they weren't ready for wholesaling.  These stores won't be giving them another chance.

If you can do so without revealing anyone's identity, can you be more specific about how these potters fell short? I think it's important for anyone who wants to try wholesale to see the potential pitfalls. I've often said on this forum that wholesale is far better than consignment, but it's true that a lot more is expected of the artists. We should have more discussion about what is expected of the artists.

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Two potters I know have completely ruined their wholesale reputations because they weren't ready for wholesaling.  These stores won't be giving them another chance.

If you can do so without revealing anyone's identity, can you be more specific about how these potters fell short? I think it's important for anyone who wants to try wholesale to see the potential pitfalls. I've often said on this forum that wholesale is far better than consignment, but it's true that a lot more is expected of the artists. We should have more discussion about what is expected of the artists.

 

 

Both of them have serious delivery date issues.   Two-three months late, trying to deliver mid December (merchandise secheduled for October 1 delivery).   Also noted for partial delivery and delivery of wrong merchandise.  Example:   Delivered Mississippi themed items to a store in Mid Tennessee.   One of these potters is known for delivering items not ordered (why these stores don't check orders and refuse them .... )   One of the potters has serious color issues.   They only write "green, blue, brown, etc" on the order.  One store actually showed me some items and green ranged from a greenish brown earth tone to bright lime green.   The store had around 12 platters in the initial "I" in lime green (ordered like 4 in the brownish green).  Another store had like 20 E's.  (not ordered).   I've heard these potters never deliver some orders yet keep doing wholesale shows and taking more orders.  

 

I'm pretty much in touch with the retail gift market in Mississippi, and to some degree with gift stores in AL, TN and LA.  And I've heard these complaints from 10-15 stores, about these specific potters.  Last week a retail store from AL came in and all but begged to place a 5K wholesale order because they needed to fill a gap left by one of these potters.   I refused because I sell my pottery to the general public at a slightly higher than wholesale price and I have no margin for wholesale pricing.   And secondly, because it's November and gift stores need their merchandise no later than the first week of November.  

 

What these potters don't seem to understand is that well run gift retailers have a specific Open To Buy (budget).   And they MUST have merchandise to reach sales goals.   When these potters do not deliver as promised, the stores are left short .... losing sales they can never get back.   You have to have your 4th quarter merchandise.

 

In order to wholesale, you've got to know your production capability.   I know with my kilns and ability, I can put out about 2K of finished  pottery in a week.   With one added worker, we can put out about $1500 extra in greenware (which is back stock bisque for the 4 weeks I'm doing my two shows and days off ).  You have to know what your capability is.   Some of these wholesaling potters have no idea (I've asked them .....)   You've got to be able to hit a date on a calendar.   Example, a couple of weeks ago I took a $3500 order (for an organization, not a store).  BEFORE I accepted I marked out the production on a calendar.   I'm delivering it this Wednesday November 3rd.   Today we wrapped all but $65 of the order.  That $65 is cooling off in the kiln now.  If you can't make a delivery date, you turn the order down.  It should be simple but some of these wholesalers in my area don't seem to know that.

 

Production/delivery dates and consistency in color are the main reasons for their terribad reputations.

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  • 1 month later...

Hey,

In my mind, the consignment percentage was higher

than wholesàle. That gave the store a chance to

test the merchandise before purchasing wholesale.

Over time the percentage seems to have shrunk.

It has taken a long time for me to accept 50/50

consignment, but I now see things better from the

stores point of view. The new gift shop I m using

now is 50% commission. Its in à high traffic area.

I contacted them, made an appointment on à Thursday

and visited on Tuesday to find out their location

and see the store. Glad I went on Tue since I got lost

going to and leaving. (In my defense, the cross streets

at intersections had different names on the left and right.).

I met their standards, dropped off a box, and got a call

a couple days later saying they would like to raise the

prices! I don't think that would happen in a store getting

10% to 30%. So far the gift shop has worked out. I make things

for them and they sell for me!

It took years accepting the fact its good on my behalf for a store

to receive 50%. This store is in a high rent area, staffed full time

and run in a professional manner. It seems lift a burden off the mind

not splitting hairs and pinching pennies someone else is making

the same amount as you! I still get to make gifts for friends

and sell retail if I so desire, plus I get a monthly check from a

store to pay expenses. Maybe there is a store like this near you.

Good outlets are hard to find. I won't go into all the horror

stories I have had, like the mall store who ordered consignment

pottery before Christmas then closed in a matter of days in January!

Anyway, good luck finding that special place.

Alabama

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These are the ratios I used in my retail stores:

 

50% cost of goods

10% labor cap

20% Facilities cost (rent, utilities, insurance)

5%   Supplies & Misc (bags, tissues, pens, tape, paper tile, cleaning products, POS supplies and repairs/replacements, etc)

3%   Credit card

2%   Advertising

10% profit

 

That 50% includes inventory carrying costs of about 5-10%.       We would start with this base formula and to increase profit try to squeak some of those numbers.   My mall stores averaged about 46% COGS (giving us 4% more profit).  However, when I first started my COGS ran 54-55%.   I worked hard on getting to 46%.    Also  I did no advertising for mall stores.   My monthly rents ranged from 9K to 23K (only in one really large store).   So for a 9K rent store you would need  around 550K yearly sales to make it.     If that COGS went above 50% the stores would not have been profitable.

 

We could tweak and squeak but in no way could a traditional retail specialty store make it with more than a 50% COGS.  Now... in my current situation my facilities cost is considerably less than 20%.    And it's not really commercial, even though I'm on a major highway.  I haven't calculated it this year and my numbers are offset because I've paid for most of my buildings and expansion expensive out of business cash flow.     But most retailers in solid commercial locations are going to be paying moderate to premium rents.   Traditionally what I've experienced is the more you pay for location, the higher volume sales you get.  Making 50% (or less) COGS mandatory.  Even destination retailers like all those handbag/jewelry stores in places like Harry Hinds Blvd in Dallas marked 50%.  (they take their 25% wholesale markup plus an additional 25% markup)

 

Grocery stores and discounts say they use 25%.    I think on food products it is about 25%.   But I've seen products at these retailers that are 50% and even higher. 

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