Valuing Merchandise and Time
How do you figure out when to discount items and when to take the wholesale plunge?
I commissioned very limited-edition pieces from a craftsperson and the pieces haven't sold in my shop. These were editions of 15 in the world. I want to reduce them in price now to sell them (hopefully). A friend said I shouldn't do that--it would devalue the artisan's work going forward. Is that true? By reducing the price, am I damaging future pricing for this artist's perceived value? Please share your thoughts.
- Barbara, via e-mail
Well, your friend is partly right in urging you not to mess with the established value of an artist's work. It is always the job of the dealer to build the value of an artist's work and then to work to maintain that value. However yours is a special case. First, this is a small body of work, a commission, which could mean that it differs from this artist's other work. I'm hoping the pieces don't carry the name of your shop or the town it's in, since this would further complicate establishing their value and sale. Since you haven't sold any of the edition and still own them all, there is no established value for these items.
First, let's be sure selling them is the best move on your part. I'm going to assume this is the work of an emerging artist--otherwise, the cost of the edition would have been prohibitive for all but the wealthiest shop owners. So, how do you feel about the artist's career and his or her work and commitment to promoting it? I ask this because if this artist is doing the right things, you might want to put this work away and wait awhile before doing anything with it. You might be rewarded for your confidence in this artist and for your patience.
|Value is related to what the market is prepared to pay for an object and is supported by sales. In this case, no sales equals no value supported by the market. Had you sold any of the edition you would have established a value for this body of the artist's work. An even more important consideration is what reducing the price would have done to the value of the pieces you sold and your relationship with the clients who purchased them at the initial price. With that said, how are you going to sell these items?
Okay, so you want to sell them now. I like this plan. Keep numbers 1, 2, and 3 for yourself. This means you are beginning with #4, not #1. Then determine a price for the remaining 12. I would urge you to put them out, but one at a time. Perhaps you reduce each by 25%, and I also suggest you not mention this is a sale price. Reason? Although it's always great to get items on sale at the grocery store, I'm pretty sure that same mind-set doesn't apply to buying art.
As one piece sells, put out another until you have sold the 12. Over the time it takes to sell the 12, the work may gain some value and you'll increase the price to reflect this. Now, what about your three pieces that you put aside? At this point, you can sell them also or hold them as an investment.
I am comfortable making my work and selling it at fairs, community shows, and other marketplaces where the public shops. I have had retailers ask me for large orders--to make multiple versions for them to sell in their stores. I always decline because I don't think I can work under pressure for fulfillment. Is there a way to agree to making multiple items for a retailer, but doing it on my own timetable? Can an artist contract to provide an order over a long stretch of time? What is the normal order and production timetable?
- Simon, Chicopee, Massachusetts
Isn't "comfortable" what it's all about? In my mind, one of the major reasons to pursue a career in the studio is that we get to make the rules and have a life we control. So, why compromise your freedom to enter the wholesale marketplace? I'm also concerned about your thinking that you can't work under pressure. However, if you want to give it a try, let's consider some of the ground rules of the wholesale market.
First and foremost, the buyers are working to fill the shelves of their shops. The efficient and cost-effective way to accomplish this is to plan for a season, go to market, and purchase the needed inventory based on past sales figures for that time period. It really doesn't make sense to expect them to take in a string of partial orders, which would mean their inventory of your work would be too small to show well and also create all kinds of record-keeping issues. Another expectation is that the maker has the ability to fill reorders in a timely manner, should the work do well in the shop.
Typically, buyers place orders for ASAP delivery; some smart buyers do place orders to be shipped on dates further into the future. Orders that have a long lead time may be your way to try wholesale selling. Take a careful look at your line. It sounds like it was built for retail selling--meaning all the items may not be profitable when offered at wholesale, although they should be if you've monitored your costs and set retail prices to reflect them. You'll want to make a list of the items you could wholesale profitably and offer only these items to buyers seeking wholesale orders. This is a common practice these days.
Then put some thought into how many of these items you could produce in a given time period. Buyers wouldn't be asking to place wholesale orders if they didn't believe in your work. Use this to your advantage. Only accept orders with long lead times. Actually, you may want to take only one order as a practice run, produce it, and deliver on time and be prepared for a reorder. If this works for you, slowly take more wholesale orders. Just remember not to exceed your comfort level.
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