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June 2015

Control Your Prices and Avoid Price Comparisons With Your Gallery

In response to the previous post, Emily Johnson left a comment that deserves further attention. You are welcome to leave your comments as well, . . . but let's start with her questions.

Emily-Johnson-Soli-14k-ring
"Hi Harriete!
I've been moving to sell more online myself, my galleries are doing it, so why shouldn't I?"

"Locally my work sells at double wholesale. However, most of my out of state galleries do a 2.25, sometimes 2.5 markup on my work. I think that's too high." 

"What is everyone's opinion on how to keep my prices consistent? Do I raise my prices to 2.25 to keep consistent, or do I ask my galleries to stick with 2 x markup? Knowing full well that they may not be too happy about that....."

Pat-Flynn-prices-on-internet-phoneEmily's questions bring up several issues that I was thinking about when composing the previous postThe point of the previous post was that the transparency and ease of price comparisons facilitated by the internet also creates an opportunity for artists and makers to control the price point for their work.  Expanding on Emily's thoughts, I also think that some new approaches to price management with more strategic thinking are in order.
 

 

 

 

Let's Break Down the ISSUES.
What is the impact when galleries calculate their retail price at 2.25x or 2.50x the wholesale price while the artist/maker continues to maintain a lower retail price at twice wholesale? 

  • The galleries may be frustrated that artists are selling at a lower price.
  • The galleries may consider that their retailing expenses justify a higher price point.
  • If artists/makers are retailing work independent of the galleries, maybe artist/makers are not fully accounting for their retailing expenses. Have you thought about how much it costs you to stand at a retail show, or list your work online? 
  • If the galleries think the work can sell at a higher price point, why do you think that a 2.25 /2.5 markup is too high?
  • Does a lower price lead to higher sales volume and more profit?  Do you have evidence that more work will sell at a 2.0 markup? Is selling more work at a lower price your objective? 
  • What would be the impact on your bottom line if the gallery decided not to sell your work any longer because they didn't want to compete with your lower price point?


The future of selling:
While not every artist and maker sells directly online, it is definitely a growing trend. While craft shows continue a slow decline and brick & mortar locations struggle to maintain market share, the alternatives for selling online continue to expand and the barrier to entry is low. 


The impact of selling online:
Posted prices are expected online  -- and price comparisons are easily obtained within minutes. 

Work on consignment is owned by the artist:
If the work is on consignment, I think artist should be able to dictate the retail price. You own the work, not the gallery.  An artist/ maker can definitely specify a recommended retail price (which should be at least double wholesale to cover your retailing expenses).   

Thinking strategically, here are other options:

Option 1.
Ask the consignment gallery to purchase your work outright (at your wholesale price) and they can mark up as much as they like when they own the work.  You can also offer to stop selling the same work from your website or any other online marketplace in exchange for a minimum sales volume within a specified time frame. (See below for more on this point.)     

Option 2.
Change the wholesale approach altogether.   To avoid a direct price comparison between you and your gallery, sell a specific line of work at the gallery and sell a different series on your website.

Stores do this all the time. I discovered this marketing approach recently when shopping for carpet. After going to five different carpet stores I realized that all the stores sell well known brand names like "StainMaster" but the names for the same carpet grades and styles are different at each store.  It was impossible for me (the consumer) to make a side by side comparison on price or quality even for the same brand name. Comparing carpet from different carpet companies was equally impossible and completely overwhelming.

Artists could adopt a similar strategy to avoid the appearance of direct price competition with their galleries.  Galleries can sell a particular group of work and the artist can grant an exclusive on that style to eliminate side by side price point comparisons. Another approach is to simply change the name of the work or the series on your website, so it is harder for the consumer to make a side by side comparison.  This tactic is what carpeting and mattress companies depend on for their marketing and pricing strategies.

Option 3.
Think about prices and value more strategically. The idea of selling to a small local market is quickly vaporizing. The world is your market.  Every person is now competing with everyone else (including imported jewelry marketed as "handmade" and lifestyle purchases like a new phone). How can you create a perception of value for your work that has less to do with price?  To compete your work must standout and be unique.  Average is very hard to sell in a global marketplace. Define your market more specifically and help buyers choose your work based on factors beyond low prices alone. 


IN SUMMARY:

  • Rethink how to manage the marketing and pricing of your work.  
  • Consider selling different work at different venues (e.g. galleries and online). 
  • Avoid obvious comparisons between your website and your gallery prices. 
  • Market your work beyond local.  
  • Be more assertive in managing the prices of consignment work. 

 

Related Posts:

Pricing and the Impact of the WEB: To post prices or to not post prices??

She Sells Wholesale. She Sells Retail. Is She Selling Wholesale at Retail?

Commission Structures with Galleries - Are they negotiable?

Surviving an I.R.S. audit - What Is Included in the Cost of Finished Good besides your best guess?

The Value of Your Work is NOT the Price of Your Work

Pricing Your Work - The Ultimate Variable in SELLING YOUR WORK has no numbers! What the Market Will Bear


Pricing and the Impact of the WEB: To post prices or to not post prices??

To post prices or to not post prices??

The debate about posting prices for art or craft on the web has raged on for years. One faction advocates that no posted price encourages customers to contact the artist or gallery.  A different faction rationalizes that most potential buyers will be discouraged if such basic information is not readily available.  Read on for my opinion on this issue...

Pat-Flynn-prices-on-internet-phoneI've been wondering... with the ease of comparing prices right in the palm of your hand.... what is the impact on the arts and craft market? Can you vary your asking (retail) price in different market niches?  

My experience in a recent eBay auction has helped gel my opinion.

 

 

Pat-Flynn-ebay

It all started when my sister found a Pat Flynn bracelet on eBay for a minimum bid of $650. We both recognized this as a great deal.  

Pat-Flynn-WebsiteWhile Pat Flynn has no prices on his web site, it didn't take much detective work to find this production bracelet #9 available at multiple locations, galleries, stores and online marketplaces with the retail price of $1,680. 


Since I was able to verify the retail price, the eBay $650 starting bid would be a fantastic price for a Pat Flynn bracelet. Would it sell for $650?  With 24 hours before the deadline, there were no bidders.

OBSERVATION #1
Pat-Flynn-HamiltonHill
It is easy to compare prices on-line from different venues even for art jewelry with a limited production. 

 

 

OBSERVATION #2
Pat-Flynn-Sam-Shaw-GalleryAs every brick and mortar retailer moves to online sales for survival, prices online will be expected, just like in the store. Everyone expects the price to be listed even for art & craft. No posted price indicates that the item is not for sale or it is already sold. The days of "price available upon request" is truly only for the most rarefied, truly one of a kind, and very high end (i.e. if you have to ask, you can't afford it).

 

THE eBay BIDDING 24 HOURS LATER... 
Pat-Flynn-final-bids-2
The next day as the bidding deadline was getting closer.....I followed it closely.  As I had discovered already, any potential bidder could easily find price comparisons to verify the retail value of the bracelet.  In the last two hours, the bidding rapidly accelerated. 

 

OBSERVATION #3
Pat-Flynn-Quadrum
Listing your prices on-line establishes value.  In this example, there was ample evidence that the asking price for a Pat Flynn bracelet was $1,680 at several different locations across the U.S., so any price below that would be a bargain. 

 

THE eBay BIDDING CLOSED
Pat-Flynn-final-bids3The bidding ended significantly closer to retail....though not quite full retail. Someone still got a great deal at $1,031 -- saving $100's off the full retail price elsewhere. I think if the eBay listing had a better photo, they would have had more bidders earlier on, but still an exciting frantic finish.

 

OBSERVATION #4
Pat-Flynn-website-9-stone-nail-BraceletPut your maker's mark clearly on your work. Pat Flynn's work is clearly identifiable not just with his signature style and materials, but because of his maker's mark in gold on the inside of every bracelet. Even for a person with little knowledge of art jewelry market they know this is by Pat Flynn. 

 

Pat-Flynn-ebay-cuObviously, the photo on e-bay was terrible (left) and the description of the Pat Flynn bracelet was unsophisticated and even incomplete.  Still they had his name in the description on eBay which brought bidders.  Your maker's mark, signature or stamp is important to establishing the value of your work.

OBSERVATION #5
With limited or no established secondary market for art jewelry and craft the possibilities of bargains on eBay will be more commonplace. People selling items from an estate will turn to eBay as online continues to expand. The potential for a discovery is there. 

FINAL THOUGHTS:
A variation on the debate about posting prices is whether pricing can or should vary in different markets. Artists and makers have often commented, "I can't sell my work for that price in my own hometown.  Shouldn't my work sell at a lower price at a local store and at a higher price in the big city galleries?"  In response, my professional recommendation is and has always been that work has to be the same price everywhere. 

Especially with price comparisons so easy on the Internet, prices need to be consistent everywhere.  This is most important where the customer can compare identical items. Price comparisons are inevitable.

And most important, artists and makers need to price their work at full retail on their website so as not to confuse their customers or undercut their galleries/stores/online markets. The on-line posted price establishes value.

THE FUTURE:
The new reality is that artists may have more control of the retail price.  
As pricing visibility on-line becomes the status quo there may be beneficial consequences for artists and makers. Quickly fading are the days that brick and mortar locations could add another 10% or 20% to retail figuring no one will notice. 

Retail prices are now viewed with the transparency of the web and the convenience of a smart phone. Price comparisons are only a search away in the palm of your customer's hand. Variations in price are immediately discovered and compared against similar to identical items. Control of your recommended retail price is now the artist's decision more than ever before.

Take the power and the responsibility of controlling the value of your work. 

Establish a recommended retail price consistent for all situations and establish the value of your work. 

 

Guide to images found online:
Pat-Flynn-HamiltonHill-cuHamiltonHill
SPRINKLE NAIL BRACELET
Nail Bracelet by Pat Flynn made with black iron and 18 karat yellow gold hinge featuring nine small diamonds in palladium settings.Price: $1,680.00 

Pat-Flynn-QuadrumQuadrum
Nine Diamond Nail Bracelet
Pat Flynn

This Pat Flynn nail bracelet is hand forged from iron and finished with an 18K yellow gold clasp. There are nine diamonds set in 18K palladium bezels that are scattered throughout the bracelet adding an element of surprise and just the right amount of sparkle. Wear this edgy hinged bracelet solo or stacked into your everyday collection. This is a truly unique collector's piece. Look to the interior for a stamped and artist signed 18K yellow gold plate!

Since each item is handmade, slight variations may occur.


$1,680.00

 


An Astounding Jewelry Discovery

One year ago the Professional Development Seminar for the 2014 SNAG Conference focused on the importance of documenting your work, Inventory Records: Documentation and Provenance along with your maker's mark. History can have a short memory and recently this was brought to my attention in a very surprising and astounding jewelry discovery!

In 2006 my parents bought this wonderful necklace and earrings for me!
Caroline-Broadhead-Nuala-Jamison-Necklace-Earrings
My parents knew I would like the colorful necklace and big earrings -- just my style. In addition, I collect vintage acrylic jewelry and lamps so they knew they had found something that would fit my tastes perfectly.   For the past nine years, the only thing that I knew about the necklace and earrings was that my parents bought it in Florida at some antique or consignment shop.

Fast forward to the recent 2015 SNAG Conference in Boston.  On the final night I decided to wear the necklace and earrings for the evening activities. As you can imagine, many people wear fantastic jewelry to a finale event for the Society of North American Goldsmiths. 

It was then that my friend Marjorie Schick identified the necklace as the work of Caroline Broadhead (one of my jewelry & installation heroes).  I was stunned. I had no idea.  Marjorie recalled that in the 1980's Broadhead set up a business in London with Nuala Jamison "making buttons and acrylic jewelry for Jean Muir and other dress designers." 

Caroline-Broadhead-Nuala-Jamison-Earrings-1

Marjorie and I immediately looked carefully at the necklace and earrings in better light but found no maker marks.  We went to a computer to research further and promptly found these similar earrings (left) from the Crafts Council Collection Online with attribution to Nuala Jamison and Caroline Broadhead for C&N Buttons & Jewellery Production circa 1992. 

Caroline-Broadhead-Nuala-Jamison-VZ-cu2Further research also discovered this necklace by Nuala Jamison and Caroline Broadhead at a Von Zezcchwitz auction in 2009.

Caroline-Broadhead-Nuala-Jamison-Von-Zezschwitz

How did Marjorie Schick know all of this information? I've worn the necklace at several other SNAG conferences and no one said anything before. Marjorie glowed with enthusiasm as she recounted her experience.  She said, "I made trips to the UK and Holland, etc. during the 1980's and spent at least two sabbaticals and a summer in London so I was meeting a lot of people AND buying a few pieces.  I enrolled at the Sir John Cass Faculty of Art, Architecture and Design and later was artist-in-residence there as well as at Middlesex University and both schools provided the opportunity to meet more artists.  I love that time period when the “New Jewelry” was happening and feel that I am fairly knowledgeable about it --- having lived it and having been a part of it." 

This has been an exciting discovery. I've been bursting to share this jewelry tale. To think that I own a necklace and earrings by Caroline Broadhead is just wonderful. I have always loved wearing this jewelry, but now appreciate it with more insight and knowledge. 

Lessons learned for everyone:

  • Put your maker mark on all your work, some how, some way, so that your jewelry can tell a story even if you aren't there.
  • Be on the look out for fabulous necklaces by your jewelry hero. Some day you may find an example at a flea market on the ground (like this story about a Calder necklace) or at a consignment shop.
  • Trust your instincts and buy fabulous jewelry for $15, $50, or if you can afford it, $5,000. Don't wait. Your eye for jewelry may be a discovery.  
  • Wear your jewelry.
  • Be knowledgeable about your fields of interest. 
  • Conferences can offer wonderful surprises (keep this in mind when wondering if it is worth going).
  • Speak with your own voice with everything you make.  

Sculpture-to-Wear-Marjorie-SchickSculpture to Wear: The Jewelry of Marjorie Schick

This is a fabulous book about jewelry as sculpture you won't see any where else. Beautiful photos, and a complete Oeuvre Catalog clearly demonstrates the vision of this unique maker Marjorie Schick. Essay by Tacey Rosolowski.

If you love color or jewelry then this book is a must! Ask your library to add it to their collection. Marjorie does not have a website and only a fraction of her work is on the web. 


Learn to keep Inventory Records: Documentation and Provenance of your work.

InventoryRecordFORM
MORE POSTS about Inventory Records: Documentation and Provenance can be found here.

TAKE A MOMENT to study the jewelry and installations of Caroline Broadhead.

Caroline-Broadhead-Jewelry-In-StudioCaroline-Broadhead-Portfolio-Collection