TALKING CRAFT
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February 10, 2012
Business as a balancing act - how you CAN do wholesale
Your "Craft Market" applies to more than a 10 x 10 Booth
Once a year, it's time to take a break from making things, and examine your craft from a business perspective. This is especially important if you have a production line of craft, because in all likelihood, your production work accounts for a significant part of your annual income. There are aspects of your income that are out of your control, such as the economic climate which has an effect on consumers' disposable income. There are, however, other things which you do have control over, namely: what you make and how you sell it. These things can, and probably should, change on a regular basis.
The focus of this article is to consider how wholesaling might be a worthwhile avenue to explore as part of your craft business. Even if you aren't considering wholesale, this article also addresses ways to assess your production time and overall potential to be profitable.
Where are your eggs?
In the Fall of 2011, the SCC conducted a series of workshops during which artists Michael Saretsky and Susan Robertson raised the issue of market diversification. This can apply to the type of craft market an artisan attends - big/small, juried/non-juried, local/out of province, but it can also apply to markets beyond the market circuit, or "Not putting all their eggs in one basket." This is accomplished by selling in galleries, gift shops, on-line sales, consignment and wholesale, in addition to selling at craft markets.
A realistic look at Wholesale
For a lot of independent craft producers, "wholesale" is a bit of a dirty word. The most common first response is, "But I'd be making half of what I usually make." At first glance, this is certainly true enough, wholesale requires the artist to sell their work for 50% or 60% of what the work normally retails for at craft markets. In some cases, an additional 10% or 15% may be lost to commission for sales agents.
But the same can be said of consignment, where galleries will charge anywhere between 35% to 60% commission, and while the artist pockets 100% of the sales from craft markets, after booth fee, hotel and meals, travel expenses and lost studio time are taken off, the resulting profit is still in the 50% range.
Price, value and profit
There are a variety of approaches to wholesale pricing in order to maximize profitability (that also can apply to consignment). First, remember that selling your work costs money, so you want to price your product to offset that cost. Rather than just doubling the price after determining the cost of production, consider adding another 15% or 20% to reach your retail price. For example:
Normally you might do this: Cost $10 x 2 = $20 (retail). So you get $10 "wholesale" or if consigning for 60/40 split, $12.
But if you do this (20% increase). Cost $10 x 2 = $20 x 1.2 = $24 (retail), you now have a $12 "wholesale" price, and your consignment take home is now $14.40.
If this results in a retail price that might be too high for consumers, remember that you have other products you can inch the price up on, to account for lower profits on others.
You also don't have to offer everything you create for wholesale. Consider offering work that has a lower production cost, because this is the work you can potentially make the biggest profit margin on. The proverbial "bread and butter" of your product line.
Increasing your capacity - an honest look at time and profit
When faced with the idea of wholesale, the second most common response is, "I don't know if I could take on the extra work." If that is the case, it is time to sit down and do honest assessments of each item in your product line, weighing the time you spend making things vs. how well those items sell as well as what your profit margin is.
Production cost not only applies to the cost of materials, it also applies to the time you put into your work. If for example, you have two best sellers of roughly the same retail value, but one takes significantly more time to make than the other, you are not actually making the same profit on each item.
If item #1, your "Whatsit", costs $25 in materials, but you are putting 4 or 5 hours into making each piece, and you sell it for $60. Objectively: You are paying yourself much less than minimum wage. You cannot make large quantities of the "Whatsit" and if you try to, the time you spend making quantities of an unprofitable product takes time away from making other products with greater potential for profit.
Needless to say, the "Whatsit" is not a good product to offer for wholesale. You may also consider increasing your retail price. This could result if selling fewer of them, but that can be balanced by greater profit/sale, and it also frees up your valuable time.
Consider another example, your "Widget", costs $25 in materials (retailing at around $55), and you can make 20 of them in 4 or 5 hours. If it is also a good seller, you have now identified a potential product for wholesale. If it is a slow seller, however, spending a lot of time making it, even if it's easy to make a lot of, is not a good use of time.
If you were doing an objective assessment of your item line in order to gauge your productivity, and the relative profitability of your work, it might look something like this:
| ITEM | Material Cost | Price | Productivity (Qty / 5 hours) |
Sales Volume |
Profit/ item |
Potential profit based on Productivity |
Notes |
| Item 1 | $25 / item | $60 | 1 in 5 hours | High | $35 | $35 | Raise retail price? |
| Item 2 | $25 / item | $55 | 20 in 5 hours | High | $30 | $600 | Wholesale candidate |
| Item 3 | $25 / item | $55 | 20 in 5 hours | Low | $30 | $600 | Slow seller, limited production run or stop |
Eggs, Baskets and the Unknown
Of course, all of the above is just one approach to your business model, specifically your eggs to baskets ratio, but if you've never done any kind of self assessment (or you don't have a business model), it's somewhere to start. You may conclude that wholesale isn't for you. You might discover that there is another venue you don't currently sell in that you should explore, and you could decide to take the leap and try something new!
February 06, 2012
Picasso Donations to University of Saskatchewan
Courtney Milne's long time buddy Fred Mulder (an art dealer in London specializing in Old Masters prints), donated six Picasso linocuts to the U of S, each in honour of a friend or colleague, including a special one for outgoing U of S president, Peter MacKinnon.
Fred also joined Courtney in being named as an Alumni of Influence from the College of Arts and Science while he was here. He has also been named to the 2012 Queen's List as a Commander of the British Empire, for his philanthropic work, leading the way in establishing several organizations including The Funding Network.
There is also an opportunity that Saskatoon could become the new home of second larger Picasso collection in the new Remai Art Gallery of Saskatchewan, and really put Saskatoon, "The Paris of the Prairies" on the world map, alongside the renown of the Canadian Light Source, the U of S, and River Landing.
February 01, 2012
Social Good on Broadway
This morning our beautiful Affinity Gallery was the site of the launch of the YWCA's "Social Good on Broadway" fund raising initiative. CTV was on hand to interview Christine Smillie, Acting Executive Director of the Saskatchewan Craft Council, as well as a representative of Cameco about the "Social Good on Broadway" initiative and the important work that the YWCA in Saskatoon does on behalf of vulnerable women with young children. The YWCA's emergency shelter in Saskatoon is the only facility that will provide shelter to families with boys up to the age of 13.
Throughout the month of February businesses along Broadway are organizing fund raising events on behalf of the YWCA. On February 16 the SCC will be holding an event called "Art at Heart" featuring a panel of emerging and experienced artists who will talk about how we nurture a new generation of Fine Craft artists in Saskatchewan.
Christine used the launch as an opportunity to talk about the "Seeds" exhibition which is currently in the Affinity Gallery. "Seeds" is an exhibition of Fine Craft by 24 emerging Saskatchewan artists that runs until February 26, 2012.
Sale of Traditions Hand Craft Gallery in Regina
The Saskatchewan Craft Council is happy to announce that, effective January 1, 2012, Marnie and Thomas Archer of Regina have become the owners of the Traditions Handcraft Gallery in Regina. The store is an important commercial outlet for SCC members around the province. The SCC wishes the Archers success as they embark on this exciting new venture.