Over Supply, Reduced Demand = Downward Price Pressure
September 25, 2012
The increasing number of craft sellers and the expanded number of sales venues exacerbate over supply of craft .
Over supply and reduced demand in any market leads to one inevitable outcome - downward price pressure. We have seen the results in the craft market place.
This is a fundamental principle of economics. Prices will competively spiral down as long as supply exceeds demand.
It is not a judgement about art vs. craft, quality, or intentions. With so many choices, consumers can simply wait for something as good or better to be offered at lower prices. They have come to expect lowered prices and their expectations are steadily fulfilled.
OVERSUPPLY + REDUCED DEMAND
= REDUCED PRICES
My
own observation of craft fairs is that the price points for "bread and
butter" items have been stagnate, at best.
Taking inflation into account,
real prices have decreased significantly.
I had a growing feeling about this for years and had wondered why? Now I am beginning to
understand.
The bread dish above is my personal example. In
the early 1980's, I'd take my saved up "mad
money" (maybe a couple of $100) to the annual ACC
show. Once a year, I'd look for presents for family and
something for myself.
I clearly remember buying this $85 bread dish (stamped Claudia Reese) which I still have (note the jade green glaze, a signature color of the 1980's). This was the typical price range of bread and butter items at the time. Despite nearly 30 years of inflation, $85- $125 is still the bread and butter price range at craft fairs. During that same time period gas prices, food prices, and housing prices have certainly risen substantially.
At the recent ACC Show in San Francisco, there was even a promotional segment "less than $100." In an effort to promote craft purchases to a larger market, they are marketing to the lowest common denominator. Perhaps they are trying to turn the downward spiral of prices into an asset. However, I'd say they are catering and compounding a weakness - the downward spiral of prices.
Additional evidence for
STAGNATE or DECLINING PRICES
The Art Festival Newsletter.com Newsletter recently conducted and distributed a survey titled, "Art Festival Artists: Who We Are 2012".
The Newsletter has allowed me to share their survey with you. (CLICK on the
links for the full survey.) The quote below only compares only 2011 to
2010.
Quote:
"The responses to this
question show a strong downward trend in the price of art sold at
festivals."
"At a sales level below $100, the percentage has increased five points, to 29.1% Thus, except for the highest sales point, artists are continuing to sell at levels equal to or lower than last year, and much lower than in 2010. Put another way, any increase in the nation’s economy has not, as yet, translated into widespread spending increases, by price of work sold, at art festivals."
End quote.
This is a reality. Depressing, maybe, but the point is not to dwell in this abyss. We need to recognize that the crafts marketplace is in a state of over supply and reduced demand.
In an effort to sell more, makers are showing more low priced items at craft fairs. Instead of making and showing their best, makers are increasingly focused on the cheapest. This approach is not limited to the White Tent craft fairs and art festivals. The online markets enable anyone who makes anything to offer their "craft" for sale online.
And low price isn't the only issue here. Too often, instead of adapting by making work with less expensive production technologies, makers are simply paying themselves less. In other words they are reducing their cash flow, income, and profit (if any).
Garth was talking about a craft vs. art debate. I agree with the observation, but not the reason. I think everyone who becomes successful in craft wanted to escape the craft world not because they rejected craft definitions, but because they wanted to escape the low prices of the craft world.
Time to stop and rethink.
I welcome other people's insights.