Spring Window at Plaisir
Following on from last month’s post about undercutting, today we’re going to talk about pricing your work for wholesale.
Is there anything more apt to strike terror into an artist’s heart?
It’s often accompanied by a sudden and uncontrollable urge to clean the grouting with a toothbrush / paint the skirting boards a slightly different shade of white / watch every episode of Murder She Wrote back to back.
Anything rather than sit down with that damned calculator and think about money.
We’re not going to get into the nitty-gritty of working out your wholesale prices right now. If you need it, there’s lots of help with that right here.
Instead, let’s get your feet wet by talking about what you need to know when pricing your work.
That sound okay? Nice toe ring by the way.
Okay, so let’s imagine you’ve worked out your wholesale price in forensic detail.
Sums have been done, teeth have been gnashed and fists have been shaken at the gods, but you’ve got a figure.
Now you need to decide your recommended retail price, or RRP. This is the price you suggest stockists charge for your work. As we talked about last time, it’s also the price you’ll sell your own work for on Etsy, your own website or at craft fairs.
The general rule is that to get your retail price, you simply double your wholesale price.
In practice this can be as flexible as you need it to be, but multiplying your wholesale price by 2 gives you a place to start.
Once you’ve got your head around that, here are some things to take into account.
Check out the competition
What’s the average price for five or six items which are similar to the lovely thing you make? Remember this might be skewed if you’re considering a marketplace like Etsy, where sellers are often charging far too little for their work.
You certainly don’t have to match your competitors’ prices, but if your price is significantly higher or lower the reason should be obvious to your customer.
Do you use only the finest materials to make your product? Does it come gift-wrapped? Do you print onto archival paper using inks that won’t fade over time?
Or maybe you offer a streamlined, no-frills version of this item which means you can charge less.
The value and benefits of your lovely thing have to be absolutely clear. Kick-ass photos, product descriptions and branding will help you out a lot here.
Remember that your retail price isn’t set in stone
It’s important to realise that your stockists might decide to multiply your wholesale price by more than 2 – maybe 2.5 or even 3.
This depends on their market. A very high-end shop in the middle of a big city might be able to triple your wholesale price and their customers would still find that perfectly acceptable.
Shops with a more price-conscious customer might stick closer to a mark-up of 2.
Let’s get down to brass tacks here.
When it comes to deciding the selling price of your work, retailers will generally try to make it as high as possible without putting their buyers off.
That’s because running a shop is expensive and we need every item we sell to pull its weight.
If you’re outraged by the idea of a shopkeeper making a significant profit from selling your work, it could be a sign that perhaps you’re not completely ready for retail.
Be clear about who sets the retail price of your work
If you’re selling your work wholesale, which means the retailer is paying for your items up-front, your work becomes theirs as soon as they pay for it. Most designers and artists (although not all) feel that whatever retail price the shop sets is pretty much up to them after that.
It’s also worth mentioning that you don’t need to worry about small variations in price across all the shops that stock your work. Trying to enforce a single price on every retailer you work with is an excellent way to give yourself a migraine.
Things are a bit different if you’re working on a consignment (or sale-or-return) basis. In this case you need to know how much the retailer intends to sell your work for and how that money is going to be split between you. 50/50 or 60/40 in your favour are common.
Be clear on this, and get it in writing, at the very beginning of your relationship with a stockist.
That wasn’t so bad, was it?
Your cute little toes look pretty happy, actually.
They’ve been for a dip in the murky waters of pricing and lived to tell the tale.
Give them a nice footbath tonight to say well done.
Or a stiff gin and tonic. My toes certainly seem to enjoy that.
Clare Yuille — Indie Retail Academy
Clare Yuille is a shopkeeper and retail coach for creative types who want their wholesale business to go whoosh. Want to sell your work to indie retailers but feel overwhelmed, out of your depth or, erm…completely paralyzed by fear, doubt and self-criticism? Clare’s blend of insider knowledge and expertise will help you simmer-the-heck-down, plot your course and experience so many biz-related epiphanies you’ll actually enjoy pitching your work to retailers. She takes away the eeeek! and replaces it with aaah.
Ready to get moving? Download her free Indie Retail Starter Kit
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