Re: first wholesale show
Posted by John on October 03, 2000 at 18:20:36:
In Reply to: Re: first wholesale show posted by Luann Udell on September 28, 2000 at 19:10:32:
Methinks there's more here than meets the eye. Is it possible that these high end, one-of-a-kinds are really somewhat limited production pieces produced on a variations-on-a-theme basis?
Example: On one hand I make a Damascus steel katana with some exquisite inlay furniture. It's beautiful, but I really got sick of working on it. I will never make another one, and need to get three grand just to cover this indulgence. That's my price. I'll sell it to Joe Blow who walks in the studio for the same price as I'd sell it to that gallery owner down the street with all that shockingly good taste. She marks it up to whatever she wants because she knows there will never be another one close enough to compare it to. One of two things are going to happen: either that investment banker from Chicago in town to celebrate his participation in the latest Dot.com IPO is going to see it and blow a wad, OR she's going to be sick of dusting it after six months and start marking it down. Issues of perceived value and intrinsic worth are at work here.
Now suppose I liked that katana and decide to make a limited line of Japanese swords: some longer, some shorter, some with fancy furniture and some plain. Might even offer them in various steels at different price points. While these are made to order, I'll continue making them as long as I have those orders. These are not one-offs, and it won't be long until I have to have a coherent pricing strategy for them because folks will know what they should cost based on where they are on the distribution chain. Rita Retailer walking by my booth at the only high end retail show at which I exhibit would be less than pleased to see me selling this stuff at *her* price.
So, I have to do some noodling here and figure out what my price has to be to make it worth my time to create these swords. That becomes the floor, or wholesale price -- I won't sell them for anything less. My price at that craft show then has to be double the wholesale. If the pieces sell, then I'm rolling in dough. If they don't, then I've got a problem with my perceived value. In any event, I can't in all good conscience ask my retailers to try to charge a higher price than I am willing to offer similar items at that hypothetical retail show.
Is this realistic? You bet. Stoneworks had a nice little retail gallery off the studio here in Santa Fe. We had a very expensive set of custom kitchen knives. We couldn't sell them in the gallery at retail. Put them in our best store downtown on consignment. They couldn't sell them. We got them back. We dusted them, moved them around, discounted them, dusted them some more, etc. Finally we sold them for $50 more than the retail tag on the bottom reflected (an honest mistake as no one could remember the price -- much less that there was an actual price tag on them). Elapsed time: EIGHT YEARS!!!