Think Art Loud

Inspiring, Encouraging, and Promoting the Handmade Arts and Artists

Posts Tagged ‘selling your artwork’

Consignment vs wholesale is another of those decisions that is likely never going to be easy to decide, and both have their upsides and their downsides. When it comes to considering consignment vs wholesale, first of all, make sure that you are ready to take either step as both can cause a lot of damage to your business if you rush into either one too fast. You don’t have to wait till you have learned everything there is about your particular art media before you start considering consignment or wholesale (as that is never going to happen! There will also be something new to learn or improve upon no matter how long you’ve been doing it). However, you also shouldn’t just run out to every gift shop/gallery in your area if you’ve really only just started making/selling your art. When looking to interest a retail venue in either consigning or wholesaling your work you need to be confident not just in the quality of your work, but also in your pricing, knowing what your art is about, who your market is, and (particularly in the case of wholesale) your ability to keep up with a demand for more product is your work does well.

If this issue of consignment vs wholesale is new too you, then, once you feel you are ready to pursue it, you should really start with consignment. Consignment is a good entry into the world of third-party sellers. Besides generally being easier to come-by and wholesale, it also helps you to build up your professional resume which can help you down the road should you start looking for wholesale venues. However, there are some definite risks involved with consignment: damage, theft, lost, and, of course, trusting that those you are consigning your work with are honest. Whenever possible, get a consignment contract in writing and signed by all parties involved! First of all, a good consignment contract will explain to you when you get paid, how you get paid, and cover all other relevant issues such as who is liable in case your work is damaged, lost, or stolen (some galleries/stores will compensate you in the event any of those happen, but others will not). And secondly, having a signed consignment contract allows you legal recourse in the event that the consignment venue is acting dishonestly. It’s one of those things that you hope you will never need to use, but best have just in case.

With wholesale, you have the benefit of being paid up front, unlike consignment where you wait, hope, and pray that you make a sale. However, your selling price for wholesale will be lower than that for consignment, and wholesalers can be much harder to find. Also, before considering wholesale, make sure that all your legal business documentation is in order as tax numbers are likely to be required for any wholesale agreement.

When considering consignment vs wholesale, really take into consideration what kind of an artist you are. Do you enjoy making the same designs over and over with only a few modifications, or do you thrive on making completely one-of-a-kind work? Knowing where you stand on this will help you identify whether you are better suited to consignment or to wholesale. If you don’t like making the same or similar thing over and over and over, than wholesale may not be for you. So before you push too far forward with making a decision on consignment vs wholesale, take a minute to consider how well either one fits your business, not just where it is right now, but where you want to take it down the road.

If you sell your artwork or are thinking about selling it, pricing is likely something that you have (or will) struggle with (don’t worry, most everyone does!). Knowing how to price your work cam be a major headache. I’ve struggled with pricing for years, and, while I’d like to say I understand it perfectly now I can’t, but I can say that it does get easier and that I understand it a lot better than I used to.

If you’ve ever looked at a book or website for information on how to price your work, then no doubt you’ve seen all the pricing formulas out there. They’re all some form of materials + hourly wage x markup. Sometimes the emphasis may be on marking the materials way up and then adding in the cost of your time (all of which often gets marked up yet again for the wholesale or retail price). And sometimes the emphasis is more on the value of the time put into the piece. There are many, many different pricing methods but they all involve the value of the time put into the piece and the actual material cost.

Something worth noting is that most all the time, we understand that we need to make back our material costs, but we often neglect to properly compensate for our time. This begs the question that I’ve seen asked over and over on various forums: how much should I charge for my time. Well, there’s really no easy answer to that. Some will tell you that you need to make at least minimum wage. And they’re right, you should NOT be making any less than minimum wage, however, if this is to be your living, you need to be making well above minimum wage.

When it comes to determining a wage per hour, a common mistake that is made is to just pick an hourly wage that sounds good to you. This is a huge mistake and will most often just set you up to fail because it does not account for what you need to make an hour to actually make your business work.  Like many, I started off making this mistake. I thought $10 an hour sounded like a great wage to make, and, in an area where most of the jobs are not much above minimum wage ($7.40 an hour here in Michigan), it was more than a lot of jobs around.  But I didn’t understand then what I do know.  It wasn’t until joining Ganoksin (an online gem and jewelry community) and reading about this very issue there that I saw it explained in such a way that it made perfect sense.

The way it was explained was that we often make the mistake of deciding what we would like to make an hour instead of doing the math to find out what we need to make an hour. To find our what your hourly wage needs to be, you have to add up all of what your expenses are.  What is your cost of living? Your cost of doing business? Taxes? Etc. To know how much you need to charge an hour, you need to know you much you spend yearly.  After you’ve found out what you cost of living  and cost of doing business is add them together this is your (estimated) yearly expenditure.  But you’re not done yet, it is often said to estimate at least 30% of your income will go to income tax so need to factor this in also.  This all just gives you your break-even point, you need to make above this so that 1) you have a profit that can be reinvested back into your business, and 2) you have extra left over that can go into your personal savings to cover unexpected expenditures, fun personal expenditures, etc.  So factor in an additional percentage to get what you need to be making in a year.  Now that you know what you need to make in a year, you can start working backwards to figure out what you need to make in an hour.  When you are self-employed as an artist, you likely will not be working the ‘normal’ 40-hour week that most everyone else works.  On average, an artist will only spend between 20-25 hours a week creating their art, the rest of the time is generally spent taking care of other aspects of the business (marking, promoting, advertising, paper-work, photographing, attending shows, etc.) but the only time that actually makes you money is the time you spend creating each piece.  Find out how many hours on average you spend each week creating your artwork and use this to calculate how many hours you spend in a year creating salable product.  When you have that number you are ready to calculate what your target wage per hour should be, all you need to do now is divide the number you got when you determined how much you need to earn in a year by how many hours you spend creating and you will have your target wage per hour.

I know it sounds complicated, but knowing this information is invaluable when it comes to knowing how well your business is actually doing.  It will save you from a lot of needless headache and heartache later on if you understand how much you actually need to be making in order to have a successful business of selling your artwork and not have to always rely on a secondary source of income.

I hope you find this blog post to be helpful (and understandable) to you and I wish you all the best in going forward and putting that price on your art!

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