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wholesaling - consignment

updated tue 26 nov 02

 

vince pitelka on thu 21 nov 02


Those who outrightly condemn consignment completely overlook the galleries
which offer their artists a one-person or several-person exhibition once a
year. Such galleries almost never purchase the work for such exhibitions.
It is almost always done on consignment, and potentially a very lucrative
thing for the artist. We have gone around and around on this issue before.
There are several highly respected members of this list who think that
consignment is a bad idea under any circumstance. None of my own
considerable experience with both consignment and wholesale sales of my own
work supports that point of view, although I would recommend the following
to anyone considering a consignment arrangement with a gallery:
1) Research the gallery, talk to other artists who sell there, get a good
sense of the gallery's reputation.
2) Require a written agreement from the gallery, explaining how they will
handle your work, how much of your stock-on-hand will be on display at any
time, how much display space will be devoted to your work, how they will
promote your work, how quickly they will pay you when an item sells.
3) Do not hesitate to ask hard questions of the gallery owners or managers.
Interview THEM to see if their gallery is suitable for your work. If they
act offended by this, then do not waste your time on them. If they like
your work, if they are secure in their business, and if they maintain good
business practices, then they will not mind your questions.
4) If you sell to a number of consignment galleries, visit them all at least
once a year, and rotate any stock that is not moving. In other words, if
some pieces aren't moving in gallery "A", switch them with items that aren't
moving in gallery "B". The galleries will appreciate this. Plus, if you
visit them at least once a year and maintain a good face-to-face
relationship with them, they will pay you more quickly.
5) Push for an annual one-person or small-group exhibition where your work
is featured, with an opening reception and invitations mailed to the
gallery's mailing list. This is usually a very lucrative occasion for the
gallery. Any good consignment gallery will be interested in doing this.
Generally, galleries that buy wholesale do not do this.

There are no absolutes. It is unreasonable for anyone to say that
consignment is NEVER a good deal. There are some wonderful galleries out
there who sell on consignment exclusively. Sure it's a great deal for them,
but only if they do a good job for their artists.
Best wishes -
- Vince

Vince Pitelka
Appalachian Center for Crafts
Tennessee Technological University
1560 Craft Center Drive, Smithville TN 37166
Home - vpitelka@dtccom.net
615/597-5376
Work - wpitelka@tntech.edu
615/597-6801 ext. 111, fax 615/597-6803
http://iweb.tntech.edu/wpitelka/

Paul Lewing on thu 21 nov 02


on 11/21/02 11:49 AM, L. P. Skeen at lpskeen@LIVING-TREE.NET wrote:

> There is no "law", per se, that governs wholesale pricing, but the generally
> accepted thing is that wholesale prices are half of retail.

That's known as "keystoning", and it used to be the rule. These days,
virtually no store out there is selling work for double the wholesale price.
It's double the wholesale price, plus the shipping, plus usually a little
more. So when you see a pot in a store priced at $100, chances are the
potter got somewhere around $40 for it.
Paul Lewing, Seattle

Bobbruch1@AOL.COM on thu 21 nov 02


<<<<have
enough confidence in my work to buy it, I don't have enough confidence in
them to consign. The exception is when a store is willing to give me a SHOW.
A one person or group show that runs for a specific time, and is advertised
is fine.
A competition where the work is shown is yet an other exception. I have a
store and nothing in it is there on consignment, except that work that is
being shown in a current show. ....... Bill Campbell

Bill: I would agree, with the exception that I have a gallery that has
included me in a two and three person show and wants to do another in 2003,
so I keep work there at other times. The gallery owner gives me excellent
display space and I feel a loyalty based on his efforts on my behalf.

That being said, I am a little puzzled by wholesaling. If I have a pot that
I determine should be priced at $100 based on competitive, market and
economic conditions, I know that I am to receive $60 when that piece is sold
on consignment. I realize that I am paying $40 for that sale, but I don't
have any other costs beyond the cost of producing the piece, if it is a local
gallery. That doesn't mean that I think the piece is "worth" $100. "Worth"
would be an aesthetic and value of labor and materials calculation. It means
that I think that the piece is competitively priced TO SELL in that market.

Now, if I want to wholesale the piece, how do I price it? Do I expect to
receive $100? If I do, what does the gallery do with it? Now I realize that
prices in Ohio are lower than on either coast, but the gallery still has to
have a considerable markup to cover their costs and make a profit. So how do
you set the wholesale price?

Thanks,

Bob Bruch

WHC228@AOL.COM on thu 21 nov 02


Bob
The issue of what you get for your pot is the bottom line in all of this.
You must price your pot at wholesale at the price that you expect to receive.
The fuzzy part about the difference between wholesale and retail has to do
with what it costs you to sell your pot retail.
If you are honest with yourself about the time required to sell a piece, and
all of the other costs, plus the time that you must spend away from your
workplace not being productive, you should be able to subtract that from what
you expect to sell it for retail and determine the wholesale price.
That is the sane/business way to do that. I suspect that the real way that
you will end up doing it is to figure out, WHAT THE MARKET WILL BEAR.
You will have to gain enough experience by making mistakes to get the
experience necessary to price your work both wholesale and retail.
One of the mistakes that artists make is thinking that the wholesale price is
supposed to be half of the retail price. In my store the markup that I use is
often more than double the artists price and sometimes it is less. It really
comes down to finding the proper price for an object that will make sense
when displayed with the other work in the store. When we buy work it has to
do with, is it saleable, or do we want it to dress up the store, or any
number of good or bad reasons.
Often times artists are given so much advice about how our market works that
it cripples us when making good decisions on our own.
If you have a good relationship with a store or gallery, keep it. It appears
that consignment in your case is a good idea in that store/gallery. It may
not be the same in a gallery that is far away from your home that you do not
have a good relationship with.
I have heard way too many horror stories about consignment to have ever
wanted to do that myself.
Bill Campbell

L. P. Skeen on thu 21 nov 02


> Now, if I want to wholesale the piece, how do I price it? Do I expect to
> receive $100? If I do, what does the gallery do with it? Now I realize
that
> prices in Ohio are lower than on either coast, but the gallery still has
to
> have a considerable markup to cover their costs and make a profit. So how
do
> you set the wholesale price?


Bob,

There is no "law", per se, that governs wholesale pricing, but the generally
accepted thing is that wholesale prices are half of retail. (This means
that your wholesale price has to make you a profit, probably 2x the cost of
making the thing including labor, materials, and overhead. If not, you're
dead in the water.)

So, that $100 pot would sell to a wholesale customer at $50, which they
would then mark up to $100 and sell in their gallery. You have to be
careful not to undercut your galleries too. For example, if bowl A sells
for $100 at the gallery, you darn well better be selling it at that price as
well if you're out selling retail somewhere. Why? Because if you're
selling bowl A for less than $100 off the tail of your pickup or wherever,
the consumer percieves no advantage to buying your work from the gallery,
since he can get it less expensively directly from you. If the gallery
can't sell your work, they'll stop buying from you, and you lose twice -
both the immediate sale and the future sales from the gallery.

Even though you are "losing" 50% of the sale price of your work if you sell
wholesale, IMO it's better than consignment. If it's on consignment, ya
gotta worry about rotating stock, did something get broken, did the gallery
put your work in a beauty shop somewhere in BFE, etc. If it's sold at
wholesale, it's SOLD, period.

L

KLeSueur@AOL.COM on thu 21 nov 02


<>

When you wholesale you are, in essence, paying the gallery to sell your work for you. That means you can spend your time producing. If you consign your work you wait to get paid your money until your work sells. If you wholesale your work you get paid in 30 days or less even if your work hasn't sold for the shop.

Whether you are selling your work at a show yourself or a gallery is doing it for you there are costs involved. Even if you sell that pot right out of your studio there are costs involve. Your time is worth money. How many pots can you make in the time it takes to talk to, sell to, and wrap that pot for the customer who came to your studio.

Retailers expect wholesale to mean 50% of the price YOU sell it for. As it is, very few galleries can meet their overhead by doubling the price. There is nothing that makes a gallery angrier than to go to a shop and see and artist selling their work for the same price that the gallery paid for it.

Kathi

L. P. Skeen on fri 22 nov 02


Karen said:
If you wholesale your work you get paid in 30 days or less even if your work
hasn't sold for the shop.


Do you mean to say that you are sending out orders without payment in
hand?!!!!!!! I have NEVER done that, and would not, especially in this
economy, except with VERY WELL ESTABLISHED customers. I get half down and
balance before shipping.

L

John Jensen on fri 22 nov 02


My experience is that in the United States, net thirty is the way
business is generally done. I order my clay on that basis as well as
most of my other supplies. Of course if you don't trust the person to
pay, perhaps you shouldn't be dealing with them in the first place.
John Jensen, Mudbug Pottery
mudbug@toadhouse.com, www.toadhouse.com


You said:>>>>>
Do you mean to say that you are sending out orders without payment in
hand?!!!!!!! I have NEVER done that, and would not, especially in this
economy, except with VERY WELL ESTABLISHED customers. I get half down
and
balance before shipping.

L

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vince pitelka on fri 22 nov 02


Paul Lewing wrote"
> These days,
> virtually no store out there is selling work for double the wholesale
price.
> It's double the wholesale price, plus the shipping, plus usually a little
> more. So when you see a pot in a store priced at $100, chances are the
> potter got somewhere around $40 for it.

Wow, Paul, so consignment is a pretty good deal, eh?
- Vince

Vince Pitelka
Appalachian Center for Crafts
Tennessee Technological University
1560 Craft Center Drive, Smithville TN 37166
Home - vpitelka@dtccom.net
615/597-5376
Work - wpitelka@tntech.edu
615/597-6801 ext. 111, fax 615/597-6803
http://iweb.tntech.edu/wpitelka/

John Kimpton Dellow on sat 23 nov 02


I sell my strawberry pots through a wholesaler . The final retail
price can be a bit over the top . Take for instance my 15" ,6
pocket
pot which I sell for $A21.50 ,ends up in a major hardware chain
store
for between $A60 & $A75 ,depending on the location.

vince pitelka wrote:
>
> Paul Lewing wrote"
> > These days,
> > virtually no store out there is selling work for double the wholesale
> price.
> > It's double the wholesale price, plus the shipping, plus usually a little
> > more. So when you see a pot in a store priced at $100, chances are the
> > potter got somewhere around $40 for it.
>
> Wow, Paul, so consignment is a pretty good deal, eh?
> - Vince
>
> Vince Pitelka
> Appalachian Center for Crafts
> Tennessee Technological University
> 1560 Craft Center Drive, Smithville TN 37166
> Home - vpitelka@dtccom.net
> 615/597-5376
> Work - wpitelka@tntech.edu
> 615/597-6801 ext. 111, fax 615/597-6803
> http://iweb.tntech.edu/wpitelka/
>
> ______________________________________________________________________________
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be reached at melpots@pclink.com.

--

John Dellow "the flower pot man"
Home Page http://www.welcome.to/jkdellow
http://digitalfire.com/education/people/dellow/

Bobbruch1@AOL.COM on sat 23 nov 02


<<<<<exhibition where your work is featured, with an opening reception and
invitations mailed to the gallery's mailing list. This is usually a very
lucrative occasion for the gallery. Any good consignment gallery will be
interested in doing this. Generally, galleries that buy wholesale do not do
this.

That can actually amount to a considerable expense on the gallery's part
one's behalf and provides and very + benefit to the person having the show.

<<<consignment is NEVER a good deal. There are some wonderful galleries out
there who sell on consignment exclusively. Sure it's a great deal for them,
but only if they do a good job for their artists.

It is a great deal for them ONLY if they sell your work. Otherwise, we pay
freight in, they pay freight out, so it would seem to be in the consignment
gallery's interest to
sell the work. Also, the gallery is paying rent, utilities and maybe
salaries, so they should be extremely motivated to make sales.

Bob Bruch

WHC228@AOL.COM on sat 23 nov 02


Bob
The overhead of a gallery is immense. If you start to think about what it
costs to keep a gallery open and advertised I am sure that you will agree
that the real estate in a gallery is expensive. Each piece of art/craft has
to pay the rent on the spot that it occupies.
Our store is large. It was an old barn. Most of it is devoted to retail. Some
of the work in it is mine, but much of it is work that I have purchased from
another craftsman. I also have a gallery where I have a number of shows each
year. The shows are always consignment. To earn the consignment money I
advertise, I send out mailers to the people on my mailing list, and the
artists list. This expense includes hiring a graphics person to design it,
and having it printed. Often I will have to have the photography done as
well. Posters are also designed and printed. I usually have the persons show
advertised on television, which means designing and shooting the TV stuff
with a pro. We also do a display ad that is 1/4 page in American Craft. We
work hard to get as much publicity as we can from the media with press
releases. Shows with the artist present are catered by our staff, and all of
the staff is on hand to welcome guests and get their cars parked. In short, a
show is a big deal. It is expensive. You have to sell a lot of ART to break
even. We have never had a show here where we have made any money directly
from the show. We consider shows a way of bringing people to our store as
well as the gallery. It is good advertising for us and allows us an
opportunity to ratchet up the quality of customer that comes to my place. It
gives me an opportunity to show "better" work, not just what sells. It is a
way to educate the public about the wonderful world of American Craftsmen,
and their work.
Far too often folks only see the money that changes hands at a show, and not
what the gallery owner gets to keep. Not many galleries that only rely on
sales from their shows last very long.
Consignment in the store would be so difficult to keep track of that we could
never do it. It is difficult enough trying to buy work from artists. Far too
often the best of artists are not good at keeping track of their work on
paper and often have no idea how to ship it so that it gets here in one
piece. Too many right brained people in a left brained world.
If you are interested in my store you can get a little sense of it on the
web. www.campbellpotterystore.com
Motivation does play a part when I sell in my store. I am more interested in
selling anything that I own than something that someone else owns. When I buy
a piece It shows that I have the confidence that I can sell it. Too often
when someone wanted to consign, they wanted me to take their "dogs" as well
as the good stuff. I once had a guy that would bring his stuff around after
he had been out on a tour of craft shows. Everything was picked over. That
was the last of any consignment for the store. Now we buy the mans best work
and let him retail the "dogs" at craft fairs. Buying allows me to keep my
standards high.
I have ranted along here far too long,
Bill Campbell

John Baymore on sun 24 nov 02


Catching up on a few days od CLAYART digests........ A few thoughts......=
..

In setting your prices I think you should focus FIRST on the wholesale
price.......... forget the retail altogether. The wholesale price is the=

price you NEED to get to sustain an income that makes you feel happy with=

the amount of money you are making as a potter, and allows you to put foo=
d
on the table or whatever. Once you have that price figured out..... you=

can think about the retail price. =

Those who do this for a real living or significant secondary income sourc=
e
need to focus more on this issue than those who do it avocationally and f=
or
whom the money issue is really very secondary. Unfortunately, the market=

influences of any low-ish pricing for work by those potters DOES have som=
e
effect on the percieved value of all claywork in general. Ms. Wendy Ros=
en
has said a lot about the low pricing and market value of handcraft potter=
y
........ which is in the archives and is excellent reading.

If you come up with a wholesale price that you think that, when doubled,
will be more than the market will bear..... you have some decisions to
make. One decision might be to look at how to cut your costs (or speed u=
p)
production of that item....so that the effective wholesale price can be
lowered. Another might be to look at another market in which to sell the=

item. And a third is to stop making that item and focus on items that DO=

give you tthe necessary return for your work.

Once you have the wholesale price of your work..... you double it and tha=
t
is the price that you should likely be selling it out of your studio, at =
a
craft fair, or using as the "base retail price" in consignment outlets. =
To
sell it for less is not considering the real costs you have of retailing
yourself. There are many. =


In the crafts field the typical shop/gallery markup is 100 percent. Whic=
h
means that if you make a happy living getting $100 for a particular
pot...... it will typically sell in a shop or gallery for about $200. Bu=
t
if you are wholesaling the work, the gallery is NOT bound in any way to t=
he
practice of "keystoning" (marking up 100 percent). They can price it at=

whatever price they want to....... it is their property. I have on
occasion found that I was underpricing the "market retail" value of some
pieces (in my studio showroom or at a craft fair) when a gallery was able=

to move them at 200 percent markup. A gallery owner is VERY happy when
they find a potter who wholesales work at a price that allows higher
markups and still moves...... they make more money. They LOVE you .

Typically you want to set your wholesale price at the HIGHER of either th=
e
number you calculated as being the price you NEED to charge..... or about=

1/2 of the "market price". If you need to get that $100 wholesale for th=
e
piece.... and the gallery feels that the "market price" will only tolerat=
e
a retail price of about $150....... it is the GALLERY'S problem to decide=

if they want to sell those pieces for only a 50 percent markup. Some wil=
l
still buy it if the work "adds something" to the feel of the gallery or
something like that..... some won't touch it.

The main benefit of wholesaling is that in THEORY you typically get paid
"net 30"....... which means that the gallery pays you within about a mont=
h
of getting the goods from you. The unfortunate thing is that it seems to=

me that more and more, that "Net 30" seems to be dragging out to 45 to 60=

and maybe 90 days. So the "cash in hand" advantage of wholesale is dilut=
ed
if your shops don't really pay you Net 30. Additionally most people offe=
r
a slight discount off the price as an inventive to actually PAY in within=

less than that 30 days....... usually 2 to 3 percent for faster payment (=
2
percent / 10 days..... Net 30 terms). So that makes the "split" the
artist gets compared to typical consignment arrangements feel more like 4=
8
or 47 percent. But that 2-3 percent doesen't seem to have the impact it
once did in getting bills paid quickly .

The consignment system basically is you offering an interest free busines=
s
loan to a gallery. If you want to be a bank that makes nothing........ i=
t
is a reasonable idea . You "give" them X dollars to "buy" inventory f=
or
an indeterminite period at 0 percent interest. They "buy" your pots with=

that money along with a 100 percent "no questions asked" stock return
guarantee on them. In states without the apporpriate protection
enacted..... you have also permanantly turned over title to the work to t=
he
gallery and it's potential creditors until the work is physically returne=
d
to you. Not a bad deal for running a business, huh? It used to be that
consignment offered a substantial difference in payment to the artist ove=
r
wholesaling .....maybe a 70 / 30 split ......... and was more worth the
risks of offering that free loan deal. But now the typical consignment
rates are almost that same as wholesaling at 60 / 40 percent. Some plac=
es
now are even consigning at 50/ 50....... which to me is the "height of
arrogance".

Go to your own bank and ask them to borrow $10,000 for six months at 0
percent interest . See what they say.

Best,

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

John Baymore
River Bend Pottery
22 Riverbend Way
Wilton, NH 03086 USA

603-654-2752 (s)
800-900-1110 (s)

JohnBaymore.com

JBaymore@compuserve.com

WALLY ASSELBERGHS on sun 24 nov 02


Bill,
I refer to your comments to Bob's message, and fully
understand your point of view.
A good gallery is a true "gift from heaven" for any
artist.
Both parties have to be able to discuss their mutual
overheads in an open way. If the balance is right, and
both parties are happy, the benefits can only be
mutual.
In my country, galleries usually take 40 to 50 % on
agreed salesprice of consignments. I never had any
problem with the "profit" of the gallery. They do have
their expenses. Any good promotion is worth its price.
One gallery, prior to closing down, informed me about
it, and paid me for all consignments sold, and
returned unsold work. All arranged up to the last
nickle. As it should be.
Unfortunatly, some galleries do get bankrupt from time
to time, and this is real disaster. I recently
received a phonecall from a curator, informing me
about bankrupcy of a gallery. I was told that 1
object was recovered, 2 were "gone with the wind".
Money lost, confidence lost, frustration to accept....
So I had to re-build a new "confidence relation" with
another gallery. Only time will tell if they are
worth it... Life goes on.
Wally Asselberghs, Flanders, Belgium.

AOL.COM
Subject: Re: Wholesaling - consignment
Date: Sat, 23 Nov 2002 12:12:39 EST
From: WHC228@
Bob
The overhead of a gallery is immense. If you start to
think about what
it
costs to keep a gallery open and advertised I am sure
that you will
agree
that the real estate in a gallery is expensive. Each
piece of art/craft
has
to pay the rent on the spot that it occupies.
Far too often folks only see the money that changes
hands at a show,
and not
what the gallery owner gets to keep. Bill Campbell



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Leland G. Hall on mon 25 nov 02


I'm going to jump into this one with my limited personal experience of
around fifteen years of very off and on selling by consighnment through
fine art gallerys. As far as I can tell (just my experience) consighnment
is the norm in Oregon. It may be different in other states. I have heard
that Southern Californian galleries will commonly buy outright, but I don't
know if thats true. If it is, I might consider takeing a load down there
to try to get something going. I have never ever begruged the 40 to 50
percent the galleries up here take. I don't feel like "selling". Happy to
let someone else do it. I just want to play with mud.

I'm thinking there might be quite a few more opportunities to "wholesale"
functional ware than there are for "non functional ware", or art vessels,
as some call them. I'm only speculating here, as I don't do functional
stuff at all. Comments anyone?

Leland Hall
Before The Wheel Enterprises
La Pine Oregon USA