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HANDLING AND EXPANDING CRAFTS' MARKETPLACE Traditionally, craft artisans have marketed their work through galleries, fairs, and directly with clients. The marketplace is much larger. It is time for artisans to look to other markets for selling their work. Some artisans, I am sure, have already reached out to these. Not enough have. What are these markets? There are three: retailers, catalogs, and interior decorators. Each, in some ways, poses problems. But anything worth pursuing will have problems. Do not let these problems get in your way of investigating these markets. Retail stores that feature furniture, gift and table top wares, flowers, and women's fashions are prime candidates. Each locality has other types of stores that may be open to selling craft work. Retail stores are, usually, in the habit of paying for the items they select for their inventory. Sure, there will be those who will ask for work on consignment. Most know that they will pay for what they order. (See the article on consignments for more on this subject.) In some instances an artisan's work may be the only craftwork in the store. But do not let this deter you from approaching them. Being the only one can be an advantage; the work will stand out because it is unique for that store and it gives the staff something new and different to sell. The disadvantage is that some customers may want to see other items before making their decision. Yes, you will get rejections. No one makes every sale. You may be planting the seed. Just because you got a "No" now, does not mean "No" forever. One never knows what potential customers have been thinking or talking about before being exposed to something or what they will think or say afterward. Surveys among salespeople in all industries say that if often takes 10 calls before the sale is made. Will there be problems? Sure! But they can be handled if one is aware of them. They concern credit and payment. Without previous experience, giving credit on the first order may not be the thing to do. Payment for first orders should accompany the order or be paid upon delivery. Small stores sometimes have cash flow problems. Vendors may have to wait for their money. Subsequent orders may be billed for later payment. BIG retail operations will not pay up front! You have to give them credit at least for 30 days. Many may take longer. It is not because of a cash shortage. They want to delay payment so they can earn the interest on that amount while the payment is delayed. Some stores and mass merchandisers will, after taking 6 or 9 months to pay, take "discounts for cash" even the time has passed or is not part of the vendor's policy to offer it. Some stores will take unauthorized advertising and freight allowances, will subtract what they call "shrinkage" (items supposedly missing from the shipment), and take an allowance for damaged goods even if none are damaged. This can take up to 20% off the invoice total. No, it is not right, but it is a common practice with some. Many stores, especially if they believe their order is large enough, will ask for advertising and freight allowances. Advertising allowances are based on a percentage of the wholesale price or a flat fee per item. Freight allowances are to offset their freight costs. It is usually based on a percentage of the invoice or percentage of the actual freight charges. Does this mean the problems are greater than the business they will generate? I don't think so. Again, if one is aware these may occur, one can plan to handle them before the sale is consummated. Some large firms have a "prepay desk." No, it is not to pay before delivery. What it does is assure that the bill will not go through the normal channels because the firm's management realizes that small suppliers are important to them and need their money to survive. Usually, payment is within 60 days and unwarranted discounts are not taken. The second market to investigate is catalogue firms. I get many questions about them. It is not unusual for artisans to look at this method of merchandising as a potential customer. But it is not one to jump into. Beware! Few catalogue firms buy a lot up front. Most expect their vendors to carry the stock and ship the orders directly to the customer. Some buy some inventory. It may seem to an artisan like a large order. But all, no matter what size the order, expect the supplier carry a backup. They do this because of the 80/20 rule: 80% of their sales will be on 20% of what is in their catalogue. They do not want to invest in inventory if it will not sell. They expect the same discount and allowances on the backup goods sold that they get when buying inventory. A few firms will give the vendor a small stipend in addition to the postage for the vendor's expenses for boxes and handling. Moreover, artisans must ask themselves, "Am I prepared to make a lot of these if my items are one of their winners?" This question will be posed when the catalogue firm's buyer gets close to considering including an artisan's work to their publication. The advantage to artisans being in a catalogue gives their name and work exposure to a far wider audience that they might otherwise have. It may cause other catalogue firms to be interested in an artisan and some galleries and stores may want to have the same items. Others may look askance because the work is in a catalogue. These attitudes will be determined by the catalogue, who is behind it, the other products in it, and what the store or gallery feels about the catalogue. There is a very important aspect to consider when working with catalogue firms. Many expect vendors to pay for their space in the catalogue. Sometimes it is a fee based on the area the wares and description take. At other times it is a flat fee or based on a percentage of the wholesale price. Sometimes it is a combination of these three fees. This practice is also done by stores that produce a catalogue besides selling from the sales floor. Some retailers put their in-stock items in their catalogue, others run their catalogs as a separate profit center and the goods are purchased separately. A few stores will have both items that are in the store and items that are available only through the catalogue. The third market for craft artisans to look into is Interior Decorating. Here are people who look for items that will enhance their decorating projects. Instead of going out and seeking something new, they often work into their proposals things they know about. A few will go looking for craft work when they have a particular job they are doing and want something different. If artisans decide they want to crack this market, they will have to bring their work to Interior Decorators' attention. I suggest starting by sending information and making appointments with those in close proximity of where an artisan works. These appointments could be at their place of business or in the artisan's studio. Later, by exhibiting at shows and fairs, and by inviting those Interior Decorators located near the show to come to the show and, especially to their booth, expands one's marketplace. Defining who an Interior Decorator is and who isn't, isn't easy. Anyone who has decorated their own, their children's, or their friend's room, apartment, or home thinks they are now interior decorators. There are, however, associations that require training and give tests before confirming the title of Interior Decorator. One is ASID, The American Society of Interior Decorators. Another is AIA, The American Institute of Architects. Although they do not confer such titles, many qualified decorators work for architects. My suggestion is to make membership in either of these organizations a requirement for obtaining your work at other than retail. Other countries have similar organizations. There are some innate problems with working with Interior Decorators that need to be addressed. These relate to pricing, credit, and delivery. Most Interior Decorators want full markup although they don't carry an inventory. This may cause a problem when selling to Interior Decorators and to retailers. Retailers may not buy if they know that other people, possible competitors for a sale, get the same discount as they do without having to buy any inventory. An associated problem may be the result of a decorator discounting work from suggested retail as a way of doing their clients a favor. This then, lowers the price that others will be willing to pay for the same work at galleries or retail stores. Who wants to pay $x from a gallery or store when it is known it can be bought for less through the Interior Decorator? Some Interior Decorators have showrooms where they own and show decorative accessories and furniture. They are more open to buying inventory than those that work out of their home or have an office but no showroom. Credit can be a problem when working with Interior Decorators. Many do not like to pay for something until they are paid by their client. Additionally, they will pay those suppliers and vendors who are pressing them the hardest for payment or they want to keep as a resource for future projects. Craft suppliers may have to wait for payment. I suggest asking for full or partial prepayment until a business relationship has been established. Decorators, because they seldom have shipping and receiving facilities, expect artisans to hand deliver and pick up items if they have not been sold. They do not want to be burdened by boxes and packing materials and the bother of unpacking something that has been packaged for shipment. Nor do any have the expertise, materials, or room to repack things for sending to customers or returning to the artisan. There are ways to get around many of these problems. They entail breaking some traditions. It is common practice among artisans to have their wholesale price be 50% of retail. They make this available to any client who is going to be reselling it. Many retailers have stayed away from crafts because, as stated above, they do not like to pay for what others get on consignment at the same discount. I suggest a pricing policy which would be a radical change for the craft industry. First, is to classify customers by the quantity and frequency of their purchases into three levels and have separate price lists or discounts from "suggested retail" for each. These are:
Stocking dealers are those whose purchases meet opening order minimums and display a representative selection. They should get the most benefits: maximum discount, exchange program or agreement for replacing slow-moving items, consignment goods to enhance the introduction of one's work or for special events, terms upon approved credit, and, possibly, advertising and shipping allowances. Non-stocking dealers/frequent users are those who consistently make purchases but don't purchase inventory. Frequent users should get some, but not all of the same benefits as stocking dealers, and those that are given, to a lesser degree. Non-stocking dealers/infrequent users are those who may make purchases from time to time. Infrequent users should not get the same benefits as the other two categories. Their discount from "suggested retail" should be less and other benefits would not be available to them. They may be "upgraded" if what they order equals the requirements of the other two categories. Yes, there are many places artisans can place their work. Now is the time to investigate these markets. It is time to make some changes; changes that will make selling enjoyable and profitable for both artisans and their customers. Copyright © 2000--2006 Alan J. Zell, Ambassador of Selling, Portland, OR. All rights reserved. Click here for information on reprints of this and other articles. If you like the theme of this article and wish to make a comment, or if you are interested my consulting services or in having me speak at a future meeting, convention or trade show, please contact me via E-mail, phone, fax or letter.
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