PJLewing@aol.com on fri 20 dec 96
I had a conversation today with a gallery owner about consignment, and I was
wondering how other people felt about this issue. This gallery takes 50% on
work on consignment.
I try to avoid consignment at all, and never do it at that rate. I consider
consignment in general to be an interest-free loan to buy inventory, and if
I'm going to go to the extra hassle of bookkeeping and uncertainty over
payment that consignment entails, I want a bigger cut than for a wholesale
sale.
Her response was, of course, "Just raise the price." Well, that would be
fine if I got all of the increase, but of course, I would only get half of
the increase.
I can see consignment if you're making large one-of-a-kind stuff, but I'm
talking about production work, retail $100 or less. And when they buy it
wholesale, they have every right to sell it for whatever they can get for it.
I don't like it when they more than double the wholesale price, but there's
nothing I can do about that.
But I also have an ethical objection to consignment at 50% (or more, as I
hear some big-name fine art galleries do) in that I don't believe that
selling art should be as important as making art. Artists can be in business
without galleries, but galleries cannot be in business without artists. This
gallery owner objected to that, saying that she was educating people,
improving their lives, and so on. Didn't make much sense to me.
So I was wondering what other people out there thought. Do you let galleries
have your stuff on consignment at a wholesale rate? Do you just raise the
price, and is that OK? If this person had any brains, she'd just buy it, and
charge whatever she wanted, especially since she told me she thought it was
underpriced anyway.
Paul Lewing, Seattle
Dave and Pat Eitel on sat 21 dec 96
Paul--I'm a potter and a shop owner. In our shop we sell other artists'
work--mostly wholesale, but some is on consignment. Our split is 60% for
the artist. Consignment is good for a shop (gallery) owner because it
enables them not to have to speculate with thousands, maybe tens of
thousands, of dollars about what their customers will or won't buy, and at
what prices. They can offer a larger inventory and a wider variety of
artists to their customers, so their customers will buy more and return
more often to shop. As a result, they'll order more of your work. One of
the best known and successful fine craft galleries around is Mindscape in
Evanston, IL, and my understanding is they do only consignment.
What the gallery is providing the artist is a professional selling
environment in a high traffic area, open 6 or 7 days a week, all year. Few
artists would be able to devote that kind of time to selling their work,
and still have time to produce work. Galleries are expensive to operate,
as I'm sure you've been told by gallery owners. Furthermore their
management requires skill and specialized knowledge. They should be paid
accordingly for their efforts.
The wholesale formula for success is "keystone" markups, which are
generally considered to be 100%--i.e. , the retail price is double the
wholesale price. We add a small percentage to cover shipping on top of
that. We are not ripping anyone off, or getting rich, believe me.
As for more than coubling the price--I would do that without hesitation if
the work was grossly underpriced. If people are doing that to your work,
it probably IS priced too low--and you'd benefit by raising your price.
Gallery/shop owners do acquire a good sense of what the market will pay.
So, even though I believe a 60-40 split is fair for consignment, I can
understand why some galleries want to make it 50-50--or maybe have to make
it 50-50 to stay in business.
Later...Dave
Dave Eitel
Cedar Creek Pottery
Cedarburg, WI
pots@cedarcreekpottery.com
http://www.cedarcreekpottery.com
Brooks Burgess on sat 21 dec 96
At 08:46 AM 12/20/96 EST, you wrote:
>----------------------------Original message----------------------------
>I had a conversation today with a gallery owner about consignment, and I was
>wondering how other people felt about this issue. This gallery takes 50% on
>work on consignment.
>I try to avoid consignment at all, and never do it at that rate. I consider
>consignment in general to be an interest-free loan to buy inventory, and if
>I'm going to go to the extra hassle of bookkeeping and uncertainty over
>payment that consignment entails, I want a bigger cut than for a wholesale
>sale.
>Her response was, of course, "Just raise the price." Well, that would be
>fine if I got all of the increase, but of course, I would only get half of
>the increase.
>I can see consignment if you're making large one-of-a-kind stuff, but I'm
>talking about production work, retail $100 or less. And when they buy it
>wholesale, they have every right to sell it for whatever they can get for it.
> I don't like it when they more than double the wholesale price, but there's
>nothing I can do about that.
>But I also have an ethical objection to consignment at 50% (or more, as I
>hear some big-name fine art galleries do) in that I don't believe that
>selling art should be as important as making art. Artists can be in business
>without galleries, but galleries cannot be in business without artists. This
>gallery owner objected to that, saying that she was educating people,
>improving their lives, and so on. Didn't make much sense to me.
>So I was wondering what other people out there thought. Do you let galleries
>have your stuff on consignment at a wholesale rate? Do you just raise the
>price, and is that OK? If this person had any brains, she'd just buy it, and
>charge whatever she wanted, especially since she told me she thought it was
>underpriced anyway.
>Paul Lewing, Seattle
>
>I fear that once potters give in to a situation such as this that even more
galleries will begin to follow the practice. In the area of Georgia that I
live in, the standard consignment cut seems to be 60% to artist 40% gallery.
Go to the mall and see how many stores have an arrangement with Levi Straus
& Co. to consign the jeans that they stock, leave the clothes on the shelves
for a month or more, rotate the stock if it hasn't sold in the appropriate
time frame, and then wait to be paid. I dont think you will find that
situation. Consignment, in my humble opinion, is a way for the store owner
to have their shop decorated with your work for free. Living in a college
town, Athens Ga., every resturant and bar has someones "show opening" or
work on consignment hanging there on any given day. But, is a bar or even a
frame shop's primary financial interest to sell your work or does the artist
fill the void of free interior decorator for the shop? This doesnt even
address the legal problems the artist can find himself in if the shop should
declare bankrupcy or simply go out of business. Personally I simply refuse
to consign except to two places. One is a co-op non-profit gallery/art guild
and the other is a school/ gallery combo that I also teach through. If the
gallery likes your work and the gallery owner has enough self confidence in
their opinion of your work's suitablity/sale-ability they will buy it
outright. Over time you may even find that the gallery will ask how much you
need to get for your work and then adjust their percentage to meet market
demands.
Jack Phillips on sat 21 dec 96
At 08:46 AM 12/20/96 EST, you wrote:
>----------------------------Original message----------------------------
>I had a conversation today with a gallery owner about consignment, and I was
>wondering how other people felt about this issue. This gallery takes 50% on
>work on consignment.
>I try to avoid consignment at all, and never do it at that rate. I consider
>consignment in general to be an interest-free loan to buy inventory, and if
>I'm going to go to the extra hassle of bookkeeping and uncertainty over
>payment that consignment entails, I want a bigger cut than for a wholesale
>sale.
Paul,
You just answered your question. I am no expert on how to distribute
your wares, but you asked how others feel about this topic, so here's my 2
cents.
>Her response was, of course, "Just raise the price." Well, that would be
>fine if I got all of the increase, but of course, I would only get half of
>the increase.
First let me say, you have desireable work. in this case, if she wants it,
she should buy it. Period. If she has confidence in it, this will show in
her excitement level as she sells it. To turn it around, if she doesn't have
enough confidence in it, you may not want her to be selling it. Frankly this
is her problem, until you let her put it in her gallery on consignment, then
it becomes your problem.
>I can see consignment if you're making large one-of-a-kind stuff, but I'm
>talking about production work, retail $100 or less. And when they buy it
>wholesale, they have every right to sell it for whatever they can get for it.
> I don't like it when they more than double the wholesale price, but there's
>nothing I can do about that.
If you retain consistancy in your wholesale priceing, it will benifit all
who buy it wholesale, and if someone chooses to sell it for quite a bit more
than keystone, it's thier problem, not yours.
>But I also have an ethical objection to consignment at 50% (or more, as I
>hear some big-name fine art galleries do) in that I don't believe that
>selling art should be as important as making art. Artists can be in business
>without galleries, but galleries cannot be in business without artists. This
>gallery owner objected to that, saying that she was educating people,
>improving their lives, and so on. Didn't make much sense to me.
Huh?? You're right. There's the snow job. Decide what you need for your work
and then sell it for that. Now, having said all that, last month I agreed to
put my work in an upscale store for Christmas on a consigment sort of deal,
to see if it would move in a "mall" setting. I never do that!! But there was
an agreement by the owner to buy out the remaining inventory after Christmas
if the "mall buying public" drug half of it out of his store by then. Also
this person agreed to purchase full displays for the 9 other stores he owns.
>So I was wondering what other people out there thought.
This is what I think.
Sell it to the people that will be excited to sell it to thier customers.
> Do you let galleries have your stuff on consignment at a wholesale rate?
No. Never. It causes problems with your other faithful accounts. Here we are
talking about a "LINE" of work that you sell, not "one off" stuff.
(One exception, If you are just starting out, and you know who you are..((to
quote Billy Crystal)) then make the best arrangement possible, but get off
consignment as soon as your work starts selling).
> Do you just raise the price, and is that OK? If this person had any
brains, >she'd just buy it, and charge whatever she wanted, especially since
she told me >she thought it was underpriced anyway.
No coment.....
I have been through this time and time again, and I would be suspicious of her.
Jack Phillips
STONART Ceramic art
Portland, Oregon
Web site:
http://www.worldstar.com/~stonart/welcome.html
Jonathan Blitz on sat 21 dec 96
I never agree to consignment unless:
I am selling work over $100 retail.
I will get at least 65%.
I collect on delivery a 30% deposit for the work.
The gallery/shop is already a customer for my other work.
I know that few stores will agree to these terms unless they really feel
that they have a distinct chance of selling the work.
They are also very unlikely to be trying to get the work simply as filler,
or store decoration.
If more artists stood firm on consignment, I think we would all be better
off.
Jon
Guyla Amyx on sat 21 dec 96
Paul,
All my galleries get 50%, consignment or not, production work or one of
a kind sculpture. The non-profits usually want 20-30%. Just price your
work at what you want to get for it after the 50% cut. It's awful, I
agree, but that seems to be the way things are, at least here in Ca.
Guyla Amyx
Morro Bay, CA
J./B. Moore on sun 22 dec 96
At the Indianapolis Art Center, our shop is almost entirely stocked with
consignment items in all media. Our cut is 35%. We are a not-for-profit
organization, and we like to think of ourselves as artist-sensitive. We may
eventually bump the percentage to 40%, but we will probably go no higher.
Julia Moore
Director of Exhibitions and Artist Services
Indianapolis Art Center
(remember to send in your applications to the Broad Ripple Art Fair!
Deadline is January 17! Email me privately if you need an application...)
Terrance Lazaroff on sun 22 dec 96
It is not normal that galleries take 50% for consignment, unless they are in
an exclusive area and they know that they will sell the work that they
select.
If the gallery is one that has just opened, beware. If it has been around
for a few years then you can be sure they know their market share and they
can get the prices that you will have to post.
You can look at the positive side of the deal in that if your work does not
sell you don`t have to look for another gallery. You have the option of
changing the unsold work for new stock. In this way you will be able to test
the market and find out what will be your best sellers.
Another perspective is to consider your first shipment to the 50% consignment
as an investment. Whenever you receive a cheque for sales consider it a
dividend and then quickly send out a new piece, priced in the same price
range of the one that was sold. What you are doing in this case is investing
in the gallery and the value of your investment is determined by the value of
YOUR inventory. Don`t forget to establish a contract that clearly spells out
who owns the inventory as well as the length of time, notice must be given
before you can remove your inventory.
Remember the option to find another gallery is always open but not always
easily done.
Best regards
Terrance F. Lazaroff
St Hubert, Quebec, Canada !!!!
Emily Pearlman on sun 22 dec 96
>----------------------------Original message----------------------------
>I never agree to consignment unless:
>
>I am selling work over $100 retail.
>
>I will get at least 65%.
>
>I collect on delivery a 30% deposit for the work.
>
>The gallery/shop is already a customer for my other work.
>
>I know that few stores will agree to these terms unless they really feel
>that they have a distinct chance of selling the work.
>
>They are also very unlikely to be trying to get the work simply as filler,
>or store decoration.
>
>If more artists stood firm on consignment, I think we would all be better
>off.
>
>Jon
Hi:
To me consignment is first and foremost an interest free loan from me to my
customer. Thus, there has to be a special relationship or reason for me to
consider it, ie a non-profit arts org. an old customer who is having
problems, etc.
Emily
Emily Pearlman-Pottery (clayfeat@echonyc.com)
http://humanarts.com/emilypearlman
http://www.craftweb.com/org/pearlman/pearlman.htm
(in NYC)
Craig Martell on mon 23 dec 96
In a message dated 96-12-22 11:17:25 EST, Terrance Lazaroff wrote:
<< Another perspective is to consider your first shipment to the 50%
consignment
as an investment. Whenever you receive a cheque for sales consider it a
dividend and then quickly send out a new piece, priced in the same price
range of the one that was sold. What you are doing in this case is
investing
in the gallery and the value of your investment is determined by the value
of
YOUR inventory. Don`t forget to establish a contract that clearly spells
out
who owns the inventory as well as the length of time, notice must be given
before you can remove your inventory. >>
So Terrance, are you an Artist or an investor? . This is an expensive way
to do business. I consider the money I receive from consignments to be my
profit on work fronted to the gallery at NO INTEREST to them. The percentage
that I pay the gallery is their FEE for selling my work. Replacing
inventory,piece by piece, as it is sold, would be extremely inefficient
unless your pieces were selling for really big $$.
I have never found a gallery that was willing to invest in MY business or was
really all that concerned if I was in the black, or in the red. I don't mean
to say that I don't have good relationships with the few consignment
galleries I deal with, it's just a fact that if I go "down the tubes", there
are plenty of artists to take my place. Invest in yourself, and pay the
galleries their just due to market your work. If you don't get what you are
paying for, start looking around, there are lots of good folks out there.
The only time that I will consign at 50% is when I am given a show, one man
or group, and the gallery is doing extra promotional work on my behalf. I
leave the work there after the show for an agreed on length of time so they
have the chance to get some "residual" sales.
Kind Regards, Craig Martell-Oregon
ken tighe on tue 24 dec 96
As a former shop/gallery owner I can tell you that I laid out $50 cash for
stuff I sold for $100. This ties up a lot of money. For an artist who is
willing to consign-- are you kidding me? If the work is top-shelf and
sells, it is a retailer's dream. Cash that is not laid out becomes
available for rent etc. This relieves the the shop owner of a huge
financial burden. I always felt that the 60/40 formula was more than fair
to the retailer. Now I'm on the other side of the counter consigning my
work to a local gallery. I get 60% but the gallery owner wasted little
time in telling me that he is one of the few 60/40 galleries left in the
area-- and he's right. Everything is 55/45 or 50/50. I still feel
strongly that if a retailer is doubling the price he/she should pay cash.
--Ken
Sam Cuttell on thu 26 dec 96
At 09:44 AM 12/24/96 EST, you wrote:
Now I'm on the other side of the counter consigning my
>work to a local gallery. I get 60% but the gallery owner wasted little
>time in telling me that he is one of the few 60/40 galleries left in the
>area-- and he's right. Everything is 55/45 or 50/50. I still feel
>strongly that if a retailer is doubling the price he/she should pay cash.
>--Ken
Which is precisely why I *don't* do consignment anymore. (Lone exception is
a non-profit guild I support - they pay monthly and the split is 1/3 - 2/3).
I've received many calls and e-mail (generated from my homepage) requesting
consignment in their "new" stores.
They receive a polite "No, I no longer do consignment"....and I tell them my
terms. $300 minimum on ALL orders - FOB my studio - payment either in
advance (if shipment is required) or when they pick up the work. I've been
stung too many times with distant stores who order then never pay. If they
don't like my terms, in my opinion, I've probably just saved a bunch of
money and aggravation. My current customers understand and abide by these
policies.
If this sounds harsh and unrealistic to you gallery owners out there, so be
it. I would prefer to direct retail my work at art fairs then spend
time/money chasing down deliquent accounts. Also, I like direct retailing
as it gives me fresh ideas direct from the people that are buying the work.
FWIW
sam - alias the cat lady
Home of Manx cats, Cavalier King Charles Spaniels and the odd horse
Melbourne, Ontario, CANADA
(SW Ontario)
http://www.geocities.com/paris/3110
"Madness takes its toll. Please have exact change."
Suzanne Storer on thu 26 dec 96
Paul, I agree with what you've said that the artist should receive more than
50% of the retail price for consignment. 55% probably does not cover extra
bookkeeping and shipping costs for me. I consign with two city art centers
who offer a better split. I do it as much for the exposure as for profit.
However I don't agree with your words about "ethics". You said
"But I also have an ethical objection to consignment at 50% (or more, as I
>hear some big-name fine art galleries do) in that I don't believe that
>selling art should be as important as making art. Artists can be in business
>without galleries, but galleries cannot be in business without artists."
In my mind it is important to consider the world of commerce and the value
of art as existing in entirely different spheres. The primary goal of
commerce is usually monetary profit and the primary goal of art is often
not. When art is placed in the market place it enters the sphere of
commerce and I have found it useful (in making a living by selling objects I
make with clay) to consider my work as the sellar might at that point for
the purpose of doing business with them.
That means what I make from the object compared to what the person who
sells it makes from it is determined by our respective costs of doing
business. And, as an artist, my cost includes the value I place on how much
of myself I put into a piece. Whether I believe that my job creating art is
of more value to me than the sellers job is to her/him is a thought I'd best
leave in the studio when I go out to engage a store owners help in earning
money from my work. Otherwise they will sense my attitude and I'll not get far.
Many artists cannot "be in business" in the manner they choose to be without
galleries. I think in the business world it pays to keep ones options open.
>----------------------------Original message----------------------------
>I had a conversation today with a gallery owner about consignment, and I was
>wondering how other people felt about this issue. This gallery takes 50% on
>work on consignment.
>I try to avoid consignment at all, and never do it at that rate. I consider
>consignment in general to be an interest-free loan to buy inventory, and if
>I'm going to go to the extra hassle of bookkeeping and uncertainty over
>payment that consignment entails, I want a bigger cut than for a wholesale
>sale.
>Her response was, of course, "Just raise the price." Well, that would be
>fine if I got all of the increase, but of course, I would only get half of
>the increase.
>I can see consignment if you're making large one-of-a-kind stuff, but I'm
>talking about production work, retail $100 or less. And when they buy it
>wholesale, they have every right to sell it for whatever they can get for it.
> I don't like it when they more than double the wholesale price, but there's
>nothing I can do about that.
>But I also have an ethical objection to consignment at 50% (or more, as I
>hear some big-name fine art galleries do) in that I don't believe that
>selling art should be as important as making art. Artists can be in business
>without galleries, but galleries cannot be in business without artists. This
>gallery owner objected to that, saying that she was educating people,
>improving their lives, and so on. Didn't make much sense to me.
>So I was wondering what other people out there thought. Do you let galleries
>have your stuff on consignment at a wholesale rate? Do you just raise the
>price, and is that OK? If this person had any brains, she'd just buy it, and
>charge whatever she wanted, especially since she told me she thought it was
>underpriced anyway.
>Paul Lewing, Seattle
>
Terrance Lazaroff on fri 27 dec 96
Craig;
You are very fortunate to have sufficient numbers of boutiques and galleries
that purchase your work up front. This means that your work is a very good
product and it is past the R&D stage. The galleries that buy your work are
very sure they will be able to sell it.
Sadly, that is not the case with me. My work is allways changing and most
galeries that buy up front are a bit shy of investing in new directions. So
If I want to show, I consign.
Consignment allows me to try new work without loosing out on the gallery
support. Yes, there are boutiques that push the consignment work to the
back of the store until they absolutly need it. I know this happens. When
this happens I ask that they show the work or loose the chance.
Sometimes my the body of work on consignment doesent sell at all, other
times it goes like gangbusters. What I like most about consignment is the
privilage to change my direction without fear of loosing the support. Most
consignment galleries welcome my work even when they personally feel that it
may not be the stuff that is moving at the time.
The relationship with a consignment gallery must be one of mutual support.
They cannot survive without the work of us artists. We can sell our work
directly but it is very time consuming when looking at time lost in
production. They know the market and they can advise in areas that we don`t
have the time to study. They are our agents. They are our employees.
Your belief that the galleries don`t care about our financial situations is
true sometime but not not always. The big question is "do you care about
their financial situation?". Life is difficult for anyone who makes
something to sell and is just as difficult for the seller if their is nothing
to sell.
I don`t replace the work piece for piece. I replace it in monitory terms.
That is If I sell for $200.00 during the month of Feb. I quickly deliver or
send out sufficient work valued at $200.00 to replace the work sold. The
only draw back to this is that I must keep my inventorry well documented and
available.
As for the 50/50%, It is a fact of life and we must adjust our thinking to
match. If you have analysed your operating costs adequately to determine how
much you must receive for your work in order to pay your overhead and salery
you simply double to cost and pass it on to the customer. If your work is
priced so that it cannot sell then I suggest you make something that does or
find a new job. I believe that is the whole idea behind manufacturing.
Art that is !!!!
Best regards
Terrance F. Lazaroff
St Hubert, Quebec, Canada !!!!!
rick Mace on fri 27 dec 96
It doesn't matter what you sell or consign for, 50/50, 60/40, or whatever.
It's the bottom line that count: Are you able to stay in business doing it
the way you are doing it. If you are not, then don't do it like that
anymore. If you think a store is taking too big a cut, then don't consign
to them. But if, for example, I have a store, and I tell you I want 90%,
that's my business. You don't have to give me your stuff, but if you do,
don't complain about my 90% if I've told you that's what I take and you
agree.
I'm starting out as a potter now after twenty years of being a stone dealer
and jewelry store owner. How is that for a switch? But I can tell you that
as a jewelry store owner I had jewelers who wanted to consign things to my
store and also thought that 50/50 was too much for me to get. After all,
they had made it and paid for the materials, and all I was doing was
selling it. What they failed to appreciate was that I had a hundred things
of my own that I had made and was making three or four times my cost on. So
If I had an item of my own which cost me $25 and I could sell it for $100,
Why would I put any effort into selling a consigned piece for $100 if I was
only making, say $40, on it. Sure it's $40 for no work. But I've already
got the other pieces in stock also, and If I sell one of them for $100,
I've made $75.00. The bottom line, after all, is net profit! (If you want
to stay in business that is).
The point is: it's a waste of time to second guess why stores are doing
what they are doing. If you don't like it don't consign to them, but don't
assume that they are being unethical in how they have decided there
business should be run. It's their business and you don't know what their
rent and insurance and alarm system and their advertising, etc., etc., it
costing them. Lastly, Galleries DON'T need artist. They could do something
else where they don't need to put up with a bunch of elitist who think they
KNOW what is "fair."
Nothing personal intended. I don't even know who wrote the note I'm
responding to (I could look, couldn't I), It's just that I've seen how easy
it is for people to judge a situation that they really haven't the
knowledge about. Open your own gallery and run it successfully for ten
years, and then write back. -- Rick Mace, Business of Art Center, Manitou
Springs, Colorado.
ken tighe on fri 27 dec 96
When talking about galleries and percentages for artists we should consider
the situation in which most fine-art galleries find themselves. First of
all, many galleries rely upon the sale of paintings, watercolors, oils,
etc. Painters will not quarrel with the gallery percentage the way a
potter will. (PLEASE DO NOT LET THIS POST BECOME AN ART VS. CRAFT
ARGUMENT!) A Painting's value can be more flexible than that of a pitcher
or teapot. Correct me if I'm wrong. But a landscape or portrait done in
oil on canvas can retail for $300 one day, $600 the next. I don't see
functional ceramics having that flexibility. In order to sell our wares,
many of us find ourselves in fine-art galleries where a certain norm has
been established (like 55/45 or 50/50). Myself, I'm in a worse bag-- I do
sculpture: it falls under a "fine art" umbrella, is subject to "painterly"
percentages, but just don't sell like them paintings....... I stand by my
previous post that 60/40 (on consignment) gives the retailer a terrific
deal.-- Ken.
Kristin Conrad on fri 27 dec 96
I did a brief stint working for a gallery in Boulder, Colorado and can see
this issue from both sides. The main "situation" for most galleries seems
to be that to be successful, having a good product and business sense is
obvious, but then it is "location, location, location". This gallery was
on the main tourist street of Boulder, and the monthly rents were very high
(and constantly rising). There was PLENTY of foot traffic and many
"Artwalks", festivals, etc. for promotion of the galleries in this area.
Sales were steady, too; but still, this gallery, and at least two others
within that same year didn't make it. In fact, of the galleries that I
remember in this area 5 years ago, only one is still there. New ones
constantly come and go. (An interesting aside, though, is that all of the
coops are still in business. Don't know what that means.).
So, judging from the evidence, the gallery owners are not getting rich and
are probably doing what they have to do to stay in business. Of course,
where that leaves the artist is still the issue. Now that I am on the
other side (producing and selling), I can see that issue, too. I suppose
it amounts to an individual choice in whether to consign your work there.
Or, maybe you could agree that if your work sold well, you could
renegotiate the percentages. As another post said, you'll probably never
know the details of why the owner takes the cut that he/she does.
-----Kristin Conrad
Rollinsville, CO
Craig Martell on sat 28 dec 96
In a message dated 96-12-27 10:12:49 EST, Terrance Lazaroff wrote:
<< As for the 50/50%, It is a fact of life and we must adjust our thinking
to
match. If you have analysed your operating costs adequately to determine
how
much you must receive for your work in order to pay your overhead and salery
you simply double to cost and pass it on to the customer. If your work is
priced so that it cannot sell then I suggest you make something that does or
find a new job. I believe that is the whole idea behind manufacturing.
Art that is !!!! >>
Hello Again Terrance: As to the 50% factor, here is what bothers me about
the whole thing. If I am selling through a gallery that takes 40%, for a $10
piece I am getting $6 and the gallery gets $4. If the gallery decides to
raise its commission to 50%, they then get $5 and I get the same. They have
increased their take by 25%. If I then decide that I still need to get $6
for a $10 piece, I have to raise my price to $12. I am then holding the line
at $6, the customer is paying 20% more, and the gallery has increased its
take by 50%. When the gallery changes the way the pie is sliced, half for
me, half for you, they are the only winner. My profit stays the same,
customers pay more, and the gallery enjoys more profit. I have been through
this scenario many times and no matter how inflationary it is, the galleries
always seem to prefer commission hikes to more efficient selling programs to
increase their income. I don't believe that anyone should charge 50%
commission to sell crafts, and that's what my work is CRAFT. Fine Art is
another story.
I have to go make the pots now. My Best to you, Craig Martell-Oregon
Terrance Lazaroff on mon 30 dec 96
Craig:
Very interesting point of vue. The customer is the looser, the potter stays
put and the gallery is the winner. We can`t forget the government. They
get an increase as well. We have a GST and a PST. Together they demand
approximately 15% of the selling price. A $10.00 pot has now climbed to
$13.80 for the customer.
Lets make believe that we are selling whosale to the same store. I believe
we recommend a retail price of $12.00. The gallery pays 50% or $6.00. They
then sell the pot for $12.00. the key word here is SELL. Has the pie
division changed? Is everyone happy? We get the wholesale price, the
gallery gets its retail, and the customer walks away happy with beautiful
piece of craft. (art). The difference here is you were involved in taking
the extra 20% the customer is paying.
You originally asked me if I was in investments. I am not. When I recently
applied to become a member of a professional artist organization. I was
asked if I considered myself an artists or an entrepreneur. I replied,
BOTH, because that is what we are. As such I do have experience at
determining profit and loss. The bottom line of the business is what counts
and you are the only person who can determine what you are going to do with
that figure. Consignment, wholesale, retail all mean the same to the
bottom line. Is the colour red, or black?. Is the cost of sales large or
small? Can I continue another year or should I quit? These are the
questions and considerations that we must look at when we look at this most
important figure. We can only do this in a detached manner. We must look
at our operating methods like an accountant who has no attachment or
emotional feelings about the enterprise. It is hard but it is necessary. It
is at this point we must make our decission to carry on or to quit.
A recent edition of "Niche" pointed out how undervalued ceramic art was in
North America. This should tell us somthing about our pricing philosophy.
Best regards
Terrance F. Lazaroff
St Hubert, Quebec, Canada !!!!!
Marshia Hall on tue 31 dec 96
Dear Clay folks;
I am a potter for twenty five years as well as a retailer
for seven years in the Santa Cruz area of California. The con-
signment question/issue is one I address daily and the results of
many years working successfully with a handful of artists is such:
the potters/artists whose works are desired profit, as does my
retail shop. Consignment is a losing issue for the retailer as
well as the potter is works sit. The 50% paid the store is very
used up by usurious payroll taxes, workmen's compensation insurance,
insurance policies, alarm expenses, not to mention advertising,
promotion etc. etc.
I am proud to pay my handful of consignees 60%-40%...I'm one of
the last in the Bay area to do so. But this relationship is based
on trust, consistent sales and experience.
Good job on the research. Enjoyed your angle.
a new subscriber,
Marshia
Robert Acton on tue 31 dec 96
Great comments on the fiscal reality of a business. I currently run a
business and need to think that way about it. I am considering expanding
my clay work from a hobby to actually trying to make a dollar. As such, I
have been developing various scenarios with a business plan. One question
I cannot answer at this point concerns costs. Could anybody tell me what
I should estimate the average cost of each piece to be... 20%, 30%, 50%
etc.?
I understand that there are issues that vary from potter to
potter, place to place such as breakage, fuel type and associated costs,
etc. but if you could give me an idea of the basic costs per item (less
labour, of course) it would be greatly appreciated.
Thanks in advance.
Bob Acton in Calgary where it is bloody cold.
Marshia Hall on fri 3 jan 97
Hi & hope you haven't frozen off anything needed or significant;
I have been a potter for twenty five years, doing studio production
and also own a retail gallery in the Santa Cruz mountain
area of California (nearly flooded off!)
I usually do an annual evaluation of my studio costs by doing
a two week log or diary: I measure the clay, determine the cost per
pound to me at the current time, detail every operation from picking
up the clay from my supplier to packing it up for sale and delivery
to the marketplace. Through the years, an accurate figure for my
cost is 35% of the wholesale value...I receive 65% of the cost for my
labor/wage. Costs vary so much! My equipment is definitely paid for
and depreciated and as I work at home, I do not pay a rent. You must
calculate these costs into my above suggested figure.
I have supported myself and my two children as a professional potter
for all these years and if nothing else, can help supply other
ceramists, potters with a realistic idea of cost!
Hope this helps!
M.
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