Craft and Wholesale Pricing

Craft fair pricing 

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An important element to be considered in setting prices for pieces at a craft fair that are also consigned to a shop, is that the price the shop is selling your item at, is also the price you should be asking at craft fairs.  Without doing this you risk losing the consignment arrangement with shops and stores.

Also remember that when attending craft fairs or pop up shops, you are doing the setup, travel, marketing, sales, etc., that the shop is doing in a commission arrangement. That cost needs to be reflected in your price for the item at a craft fair, even if different work is being offered.  Especially if the craft fair is in the region of any of the shops or galleries you have placed similar items, you need to be fair to the shops in your pricing to be able to continue supplying them.  The same principle should apply to your online sales.

Some people solve this problem by having a craft fair range and a consignment range.  The craft fair items can be offered at a slightly lower price, if you must. But remember to factor in the costs of craft fair and pop-up shops even when pricing craft fair lines.

Wholesale pricing

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Also note that your price on consignment needs to be high enough that you can take wholesale orders without losing money.  Wholesale orders are where the buyer pays you for the work in advance or upon delivery without taking a commission. They normally expect to buy at a lower than commission price and multiples of the work you are offering.

Maybe you feel you do not want to do wholesale work.  Stop a moment to consider that instinctive reaction. Wholesale means you have made the sale already without having to wait for the ultimate sale to occur, as you would on consignment. You do not have the administration of keeping track of stock in various galleries. You have certain, and almost immediate income. All these things make wholesale attractive.

It is the expectation that the wholesale price will be half or less of the retail price.  To make the piece affordable to the wholesaler and for you to still make a profit, you need to add something to the consignment price to enable the items to be sold by the wholesaler and the consignee at similar prices. This is most often less than the full difference between wholesale and consignment prices because you receive the money up front.  Cash can mean quite a lot.  You also need to have enough cushion to be able to give a discount on orders for multiples of the piece.  And that means you need to set the minimum order number to get that discount.

The bottom line (as they say in accountancy circles) is that you need to set the wholesale price first and then work back to the consignment price and retail price.

The wholesale price should be about 10% above the absolute minimum price where you can make the desired profit.  This enables you to offer that amount of discount for orders of multiples of your work.  This then implies the retail price is twice the wholesale plus taxes.  The consignment price will be about 70% to 60% of the retail price (based on 30%-40% commission levels).  More realistically, you can visualise the consignment price to be 10% to 20% higher than the wholesale price, leaving the shop to add their percentage on top of your price.

Image credit: seobook.com

Selection of a gallery or shop in which to place your work is a complex interaction of commission levels; the value you place on your time in preparing for and attending craft fairs or putting your work online; the perceived prestige of the shop/gallery; the potential relationship between you and the outlet; and the relationship of the consignment, wholesale and retail prices.