by Donald Clark

Courtesy of Handmade Business

I have always sold my wood ornaments from retail shops, but I've been starting to build a website lately and am considering selling from it as well. How should I price things online compared to in the stores?

The Internet has been a great leveler of the prices craftspeople charge for their work. In the past, work was sold from studios or at shows and in the shops that carried the work. This meant that as long as there was no competition with local shops, the price structure in the other venues could be flexible.

This price flexibility is not a practice I can support. Readers of this column know how I feel about this. All prices must be based on carefully calculated wholesale costs that are marked up to establish a workable retail price. Once shops carrying the work establish the prices, it only makes sense that the maker would charge the same price and benefit by earning the retail as well as the wholesale portion of the price.

Enter the Internet. Now, any shop anywhere on the planet is in your neighborhood and therefore you have no choice--you must charge the same price your shops are charging. An aside on this, you may find that some of your shops have put your work on their websites and may not be keen about your competing with them--check around and contact any shops that may be a problem.

I recently ran into a problem with one of the artists I represent. He has been selling work from his studio, which is in the same town as my gallery. I talked to him about the work we have done to promote him and the collectors we have created with our hard work. He didn't get it, what do I do now?

It sounds like this artist has been well represented by you and is more than a casual participant in a few group shows at your gallery. My answer will be based on that premise. An artist/gallery contract would perhaps have prevented this situation. Good contracts help maintain good relationships. Gallery contracts spell out the responsibility of the gallery to the artist and vice versa. A typical contract would delineate the instances when an artist could sell directly and any financial responsibility to the gallery that would result from such a sale.

In a perfect world, the client would be sent to the studio by the gallery. Remember, collectors want to be with the artist and artists usually have more of their work in their studios than at a gallery. It makes sense to offer that additional work to an interested party. In this instance, the gallery would handle the actual sale and pay the artist. If the transaction required extra work by the artist the commission might be divided differently with the artist being paid a higher percentage.

Galleries often operate without signed contracts; if this is the case here, you have two options. First, since this artist is local, I can see reasons to work out a way to continue to carry his work. In this age of uncertain sales and the rising costs to return unsold work, local is a plus. Collectors are very interested in meeting the artist, local works again. No doubt the creative community would be aware if you drop him and the negative PR won't help either of you. Should you choose to continue with this artist, you would want to write a contract with terms agreeable to both parties. On the other hand, if this artist isn't important to the gallery either financially or in prestige and you're not worried about negative feedback, then you can return unsold work and end the relationship.

I have had my craft shop for 25 years and have done well. Now I am beginning to feel the big pinch of the economic changes underway. How can I build a fire under my customers? I'd welcome any suggestions.

Things are just not like they used to be, that's for sure. We are living in very exciting times and we are witnesses to major changes in all areas of our culture--including many social and financial changes that are having major effects on the retail world. Many of the old ways of buying and selling are now in question.

So we can throw up our hands in despair or we can "pull up our pants and get going." I feel empowered by the challenges before us and am excited about finding new ways to do what we do.

I think it's really important to be clear who your customers are now. Spend some time thinking this through. In my business, we are finding that many of the people who traditionally bought from us are no longer buying. They may be either older and have enough stuff, they may have moved on to other areas of collecting, or they are buying their gifts at less expensive shops. Realizing that our new customers and potential new customer base is not behaving like the old one, we have begun to approach this new group on their terms.

The Internet is an indispensable tool for marketing to the twenty-first-century consumer. To be successful in the new, "normal" retail businesses will have a well managed website. This means that new items will regularly be added and that dated merchandise will be removed. In addition, building an email mailing list is essential. This list will enable the retailer to use informational e-blasts as a sales tool. Be aware that an e-blast is the least expensive way to reach your customers.

Meanwhile, we need to get people into our brick-and-mortar shops. One way to do this is to offer a full calendar of events geared at the craft's consumer. This should include demonstrations by local craftspeople you represent, talks about various media by artists and people who are knowledgeable in each field. An ongoing series of featured artist presentations is always a great way to get people to come in and meet the artist and look around. Think about making your shop available for after-hours fund-raising events for local charities, they'll do the work of getting people to come in. Be mindful that our current shoppers seem to be falling into two camps. First, those with little time who just want to solve a problem, (finding the perfect gift or replacing the broken mug) and are happy to do this on the Internet. And second, the group of folks who like to see the items in person and to have the experience of talking with the maker or at least the maker's representative.

These are not new ideas; we have all used some of them in the past. What is new is the importance of having a clear understanding of who your customer is and using a multitude of approaches to engage your customer in the buying process and therefore the future of you shop.