Sales Model

Selling your crafts

Pretty early in the process, it was apparent that there were a number of different approaches to sell my crafts. (My experience is with large wooden objects like furniture, but I believe similar options apply to quilts, pottery, pictures, jewelry, and most other crafts).

Gallery Sales. If you are very good, you can make a small number of items, whether paintings, quilts, or chairs, that are displayed and sold in galleries. If you want to build and sell something you have "invented" rather than fulfilling a commission from a customer, this is the way you need to go. But remember, the facilities (rent), utilities, insurance, and other overhead, and the staff to operate a gallery adds up to a huge expense. (just think what it would cost if you started a gallery yourself).

When I build a custom piece for a customer, I am paid as soon as I am done (or actually half before I start and the balance when I am done.) I don't have thousands of dollars in material and hundreds of hours in labor "tied up" in a showroom. My sales overhead is very low, so I can sell directly to a customer at about the same price as I can sell to a gallery. My prices are basically wholesale, making custom work competitive with the factory goods the furniture stores sell.

Therefore if you sell your work through a gallery, it has to be so good or so special that it can sell for twice as much as you expected... a gallery needs to keep 1/3 to 1/2 or more of the sale price to stay in business. Are you ready to have someone sell your work for you? Is your work so good that it will sell for that much?

Craft Fairs. Some people enjoy traveling to different locations many weekends each year to show and sell at craft fairs. They get to visit different locations, meet many people, including the people who will buy and enjoy their crafts. This also applies to setting up a table each time a cruise ship comes in, or seasonal sales - the Christmas gift sale at the office. Between the fairs is time to manufacture... probably many small "impulse purchase" items - a lot more $10 items are sold at a fair than $1,000 items. If you work this way, you have to like the travel and meeting people and chatting with them. You may have a craft where you only make a few items per year, and can sell them in one or two specialized shows per year (presumably less expensive than paying gallery overhead), but I don't. The thought of making hundreds of cutting boards or wooden bowls isn't for me.

Furniture shows. If you live in Texas, there is an annual Texas Furniture Maker's Show at the Kerrville Arts and Cultural Center. This museum attracts furniture makers from throughout the state. Entry fee is about $125 for each piece, and if sold, the gallery takes about 30% of the selling price. I would guess that 10-40% of the items exhibited sell - I have exhibited twice and sold once. In Texas, exhibiting there brings status, but I would hate to try to live only on the sales from this show.

Production sales. I know a woodworker who is very good at making cabinet doors. With the special equipment he has accumulated, and his years of practice, he can sell doors to all the local contractors, cheaper than they can make or buy them elsewhere, and he can make an attractive profit doing it. You have heard the old business saying - "fast, good, cheap - pick any two." He has achieved all three, and thus has a very successful business.

I know another woodworker who builds a line of inexpensive furniture - all made from poplar wood, all painted (mostly white). I don't know how he can compete with the imports from automated foreign factories, but with low cost equipment and a couple helpers, he says he has been profitable for many years.

Some people make lots of small items for gift shops... little boxes, puzzles, and unique items that can sell for $10 and be made for far less - low end gallery sales. A "fine" woodworker lamented that someone who had a "craft" booth next to his, filled it with crosses cut from construction lumber and other "cheap junk," but every month the neighbor's booth sold out at a few dollars per item, and the craftsman felt lucky to have a sale or two (but at thousands of dollars each). Both were successful small businesses! Both were honorable professionals! But their sales models were very different.

Custom sales. This is the primary niche I have chosen, and elsewhere will describe some (or many) of the lessons learned. I like the variety and challenge of building something unique... even if it is yet another entertainment center that is just a little special. I sell directly, so can usually keep the cost of sales low (far less than in a gallery). I interact with the customer so I can add something special that the customer wants, whether it is size, style, or quality. I cannot compete with the cheap imports (so I don't try), but I can compete with furniture from a good quality store. I have a friend with a similar business model, but he builds exceptionally fine furniture - better than I have seen in any store - and he is also successful - someone described him as the Lexus and me as the Toyota. OK. We both have a niche.

What will your niche be? What exactly will you make? How will you sell your crafts?

Sharing your profits

Gallery sales are an obvious choice if you are making items "on speculation" rather than "on commission." But there are many ways galleries or other people can help you sell.

• You can sell to a gallery wholesale. They own the item and sell it for whatever they want (or can get). It will likely be at least twice as much as they bought it from you. Once you go down that path, you cannot turn around and sell the same or similar item directly to a customer, at the price you sold it to a gallery. They will never deal with you again, and may even threaten legal action since you have destroyed their market. You need to be clear whether the gallery has the exclusive right to sell your goods, or whether you can deal with additional galleries for the same or different items.
• You can display it in a gallery, on consignment. You own the item, and are responsible if it is scratched or damaged - but they own it (must pay you for it) if it is destroyed or stolen. Typically the gallery will collect about 1/3 of the sale price for displaying and showing it, and managing the sale, less than if their money was invested and they were at risk. Be sure to discuss how long you are willing to let them try to sell it. A year may be reasonable, but if it hasn't sold in a couple years, you need to take it back and try another way to sell it.
• A decorator who recommends furniture from a store generally makes about 30% of the cost of what they recommend, so will expect the same from you. (In fact, if the gallery uses decorators as "salespeople," they probably need to price your work even higher, to pay the decorator, in addition to covering their costs.) When a gallery or store works with a decorator, it is almost like the store is doing a consignment sale through the decorator.
• A store or decorator, who handles all the customer contact for custom work, will feel that they have provided you with a valuable design, even though you know it is merely the specifications. You will still have to engineer the detailed design of the internal structure, all the joints, material lists, cut lists, hardware, etc., and will probably not have access to the customer to make suggestions of ways to improve the product or reduce the cost. If they handle all the sales work and customer hand-holding, expect to pay 10-30% of the cost of the item. In fact, for full commission, the designer (or their store) should handle all the customer billing, collection, tax reporting, etc. Many craftsmen I know hate working with decorators since they lose flexibility of dealing directly with the customer. On the other had, I have met a few craftsmen who like working with a small number of designers who serve high end customers. They build premium pieces, charge the designer a fair (high) price, and never ask (or maybe don't want to know) what the end-customer had to pay for their work.
• Someone who says "call Joe, I hear he does good work," and hands out your business card (but no more than the recommendation) generally gets a finders fee - purchase the wood from the lumber yard that hands out your business card, or return a favor to another woodworker, or a bottle of wine, or perhaps two percent of the cost (maybe up to 5%).
• A designer who recommends you, but expects you to do all the customer contact and design work and billing, may want you to add their full 15%-30% commission to your bill. The consensus on professional woodworking forums is that this is just a referral, and the demand for a high percentage buried in your costs is an unethical (or perhaps illegal) kickback.

Some craft fairs charge a minimal booth fee, but expect a percentage (often 10%) of the sales. Other events have a higher booth fee, but little or no percentage.