Wade Blocker on sun 28 jan 01
Dear new Clayarters,
Recently there has been a discussion that 50% wholesale price is equal to
50% on consignement sales in galleries. That is not quite correct.
Assume that you wish to receive $l2.00 for a mug. When the gallery
accepts a 60/40 split on consignment, the selling price would be $20.00
for that mug. The potter receives 60% which is $12.00, and the gallery
receives 40% or $8.00.
If the gallery wishes to receive 50%, add 20% to the selling price.
Therefore the mug would cost$24.00. You receive $l2.00 as before, and the
gallery receives $12.00.
For wholesale at 50% that $20.00 mug will give the potter $10.00
(based on the 60-40 split) while the gallery sells that mug for $??
depending on their mark up.
I am not a production potter, I make one of a kind items.Nor do I
depend on selling for a living. For that reason I do not particularly care
for wholesaling,since I loose control of pricing my work. The gallery
determines the final sale price, which either becomes higher than I think
my work merits, or can be lowered for a special sale to a price that is
far too low.
I never go to a gallery without an invoice made in duplicate. I would
have been laughed out of the galleries I dealt with in the Los Angels area.
I have a number on the price tag which corresponds to the number on the
invoice, plus a brief description of the piece. eg. stoneware bowl, 12" in
diameter, gloss glaze, multicolored, and the selling price.I cross the item
off the invoice upon receiving payment.
When I was a novice potter, I visited Beatrice Wood in her studio in
Ojai, CA. She had made a delivery to a museum. As usual,she did not
bother to have an invoice, since she felt that making a list was not a
job for the " Artist". The museum official made her sit down and told her
what was required of her, since otherwise they would not accept her work.
>From that day on, she became proud of her meticulously written invoices.
Mia in snow covered ABQ
TERRANCE LAZAROFF on sun 28 jan 01
It has been stated that.
"Assume that you wish to receive $l2.00 for a mug. When the gallery
accepts a 60/40 split on consignment, the selling price would be $20.00
for that mug. The potter receives 60% which is $12.00, and the gallery
receives 40% or $8.00.
If the gallery wishes to receive 50%, add 20% to the selling price.
Therefore the mug would cost$24.00. You receive $l2.00 as before, and the
gallery receives $12.00.
For wholesale at 50% that $20.00 mug will give the potter $10.00
(based on the 60-40 split) while the gallery sells that mug for $??
depending on their mark up."
My question is where did the $10.00 come from. If the potter wishes $12.00
when he sells wholesale, he gets 12.00. If the gallery wishes to sell the
piece for $20.00 the potter still has his $12.00. It is the potters
responsibility to suggest a retail selling price but the gallery can do what
they want with the price once they own the work.
Always work from the amount of money you want your pocket, not from the
retail selling price. The retail selling price is derived from the
wholesale price. It also a used as a historical figure to help you determine
your wholesale selling price. The same goes for the consignment price. We
calculate from the amount we want in our pockets. The retail price follows.
Terrance
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KLeSueur@AOL.COM on mon 29 jan 01
In a message dated 1/28/01 8:49:09 PM, zalt57@EMAIL.COM writes:
<< Always work from the amount of money you want your pocket, not from the
retail selling price. The retail selling price is derived from the
wholesale price. It also a used as a historical figure to help you determine
your wholesale selling price. The same goes for the consignment price. We
calculate from the amount we want in our pockets. The retail price follows.
>>
While I agree you should consider what you want in your pocket, I also
believe that it is imperative that you know what the market will bear for
your work. If you consistantly sell a mug for $20 and then decide to sell it
wholesale at $12 it has become a $24 mug. No gallery can afford to sell it
for less and few operate on the "keystone" (50% markup) anymore because
overhead is too high. Can you get $24 for your mug. If not, then probably the
gallery can't either.
I've seen many potters who decide one year to do a wholesale show. When they
realize that they are expected to sell their work at 50% of retail, they
raise all of their prices so that they can get a higher wholesale price.
They've never tested these prices so they can't honestly tell the gallery
owner that this is the price they get when they sell a piece. The
unsuspecting shop buys from them and then finds they can't sell the work at
that price. they don't reorder.
Kathi LeSueur
Terrance Lazaroff on mon 29 jan 01
-----Original Message-----
From: KLeSueur@AOL.COM
To: CLAYART@LSV.CERAMICS.ORG
Date: Monday, January 29, 2001 8:35 PM
Subject: Re: Another gallery question,re pricing and invoices
>In a message dated 1/28/01 8:49:09 PM, zalt57@EMAIL.COM writes:
>
><< Always work from the amount of money you want your pocket, not from the
>retail selling price. The retail selling price is derived from the
>wholesale price. It also a used as a historical figure to help you
determine
>your wholesale selling price. The same goes for the consignment price. We
>calculate from the amount we want in our pockets. The retail price
follows.
>>>
>Kathi LeSueur writes:
>While I agree you should consider what you want in your pocket, I also
>believe that it is imperative that you know what the market will bear for
>your work. If you consistantly sell a mug for $20 and then decide to sell
it
>wholesale at $12 it has become a $24 mug. No gallery can afford to sell it
>for less and few operate on the "keystone" (50% markup) anymore because
>overhead is too high. Can you get $24 for your mug. If not, then probably
the
>gallery can't either.
>
>I've seen many potters who decide one year to do a wholesale show. When
they
>realize that they are expected to sell their work at 50% of retail, they
>raise all of their prices so that they can get a higher wholesale price.
>They've never tested these prices so they can't honestly tell the gallery
>owner that this is the price they get when they sell a piece. The
>unsuspecting shop buys from them and then finds they can't sell the work at
>that price. they don't reorder.
>
>
I guess I am not being clear. Let me put it this way:
First, do a cost analysis on how much it costs us to produce the object.
If that price comes to $12.00 including profit, then that is what we should
always expect to get for the object. I don't care what the Gallery feels
the value is. I want $12.00 in my pocket. If I go to a wholesale show I
sell wholesale; I want the $12.00. When the object is priced retail by
the purchaser it is set at $24.00 or more, fine with me. The gallery gets
$12.00 or more. But they take the risk of not selling, not me.
When I place work in a gallery at 60/40% then I still want $12.00. In
order for the consignment gallery to give me $12.00 after the sale, I
recommend that they sell the object for $20.00. I get my 12.00 and the
consignment gallery gets $8.00.
Looking at the figures we might feel that the wholsale purchaser is getting
the shaft. In reality they are not. because when they sell the $12.00
object for $24.00 they get $4.00 more than the consignment gallery. They
also get the work they choose and at the time they want. The consignment
gallery gets what is left, what we are unsure about and maybe some not so
nice pieces. Who knows.
Is this just? Well, we have all read the threads stating, that when work is
purchased by a gallery as wholesale, the gallery will take more effort to
sell the work, than they would to sell consignment stock. I guess, when we
look at the $24.00 object giving 50% more than consignment, we see that
there is a bit more incentive for the gallery to sell the work.
Consignment galleries are getting free inventory that is their incentive.
When we place work as consignment, with a gallery that also buys wholesale
work, we may find our pieces in the back room, on the bottom shelves, or in
the celler. Less effort, less pay.
Finally when the consignment is 50/50% then again take your $12.00 first.
The gallery must now charge $24.00 to sell the work.
And, if the gallery is also selling stock they paid cash for, they may be
able to increase the retail price to a level greater than $24.00, as they
own the piece. I will still get my $12.00 and they will get their cut,
which may be more. However, If they establish the wholesale piece retail
price to the higher level, say $28.00, in order to get more cash, and the
work sells, then next time I may increase my wholesale price to $14.00. It
will be my decision not the gallery.
This is how we test the market. Let the gallery take the risk.
We have to stop thinking in terms of retail prices, gallery prices and
established prices. We must recover our cost of labour, materials, overhead
and profit. Otherwise we are working for everyone but ourselves.
Food for thought
Terrance
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