40% discount!

Pete Howlett

Pete Howlett

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I got contacted through my website by someone who wants to carry my work. Without a functioning website or physical store he was expecting a 40% discount on retail. Since he is running his business from a room in his house and he has minimal costs, I'd have thought 15% would be more realistic if he has, as he claimed, a client base waiting for quality instruments and he is simply a middle man forwarding goods. Anyone else had similar cheeky experience?
 
Perhaps he's the one who wants quality instruments......at a huge discount.
 
It's what my assistant said also... Couldn't see how he could do any better than me marketing my work :) I have never heard of him.
 
Parasites Pete ...If they hear or think money will change hands somewhere they will try and think up some method of getting in on it...I put my car up for sale in one of those trade mags a couple of years back..and I got so called "agents" contacting me all the time saying "they have a buyer for me lined up" ..I told e'm "Well you buy off me at my price and you sell it to them, with your bit added on" .. That usually stopped e'm dead.
 
Sounds like a total chancer to me ... and a bloody cheeky one at that. Not even got a working website or shop ... good grief! I suppose hats off for the "if you don't ask you don't get" approach but it would be laughable if it wasn't so sad.
Flog your work yourself and if you find you have stock and no buyers then go in search of middle-men/women that you trust.
 
I have a solid enough reputation and a full order book not to have to worry about stuff like this. It was rather satisfying telling him that his business model sucked. He should have known better really.. if he was what he says he was.
 
modern world and all that the 'keystone' concept is now laughable and archaic. a lot of businesses work on 30% and i imagine competitive schemes like ebay often far less. i would take a guess that HMS offers their custom builder goods getting 30% of the price. anyone knowing better please advise. ramping up one's production with that view, it would be reasonable to pay 30% to get goods moved as you get to keep 70%. is it worth it for a fine builder to expand, no. many outfits find that the more work they do the less $ they make. plus 'running a business' would quickly sap the remaining joy in life. internet forums like this provide plenty of feedback and leads.
 
Chuck, a 30% commission is gouging... if you have a network of customers (as he claimed) then he has no risk. The 'risk' is commensurate to the percentage. Besides, he is not a shop which carries huge overhead - I doubt a store gets more than 12% out of 40% after paying all their costs.
 
Selling on a commission basis usually takes 20 to 25% + the VAT. The risk is all the makers and it costs nothing but wall space to the retailer. Of course they have their business costs, so one can't say it's entirely free.
If they are buying as trade they usually seem to want it marked down a considerable amount. His 40% is hardly unheard of (actually it can be greater). That's irrelevant if he has neither shop front or an established online business. He adds nothing.
My friend in the art world tells me that some galleries want double that 40%. . .
 
Michael, I've been selling to stores in the USA and in the UK for over 21 years... never been asked for more than 40%. That sacrifice got my name out there when the ukulele market was less sophisticated and places like this and the internet did not exist.
 
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A 40% cut of retail is pretty standard in the music business, and has been for a long time. A production instrument company that sells through dealers can count on a profit of 10-15% of retail on standard models. Custom work and fancy wood makes it possible to claim a better profit for the builder. A $500-600 profit on a $5000 guitar is pretty good. If the company can crank out 200 instruments they will net over $100,000 per year, and since the owner usually takes a salary as part of the gross he can make out pretty well. Obviously, one-off builders would starve at that rate. Any multi-million dollar corporation that can net a 10% profit is making its stock holders pretty darn happy. Too often a one-man lutherie shop can't even get a discount on materials without taking out a loan. There's no way we could make even an average salary, much less support a family. For the most part, only the top tier builders make a good living. Repairmen in a populated area have an opportunity to make out much better than builders. The old joke that professional luthiers and musicians must have working wives isn't so funny because its usually true.
 
Michael N. said:
Selling on a commission basis usually takes 20 to 25% + the VAT. The risk is all the makers and it costs nothing but wall space to the retailer. Of course they have their business costs, so one can't say it's entirely free.
If they are buying as trade they usually seem to want it marked down a considerable amount. His 40% is hardly unheard of (actually it can be greater). That's irrelevant if he has neither shop front or an established online business. He adds nothing.
My friend in the art world tells me that some galleries want double that 40%. . .
Click to expand...


I used to sell turned work and instruments through craft/art galleries. All of them had a policy of a 100% mark up. Every crafter I've met is hardly doing more than supporting their hobby. It sucks.
 
I personally never sell through the trade, apart from the odd instrument that I place as a commission sale. Even then the 20% eats far into that infamous loaf of bread. I have nowhere near the output to be able to take the 40% hit. The odd commission sale has it's advantages in that it can help to establish a name but it certainly needs to be through a well established and well known outlet. Just don't expect miracles. It takes a lot more than that.
 
jcalkin said:
I used to sell turned work and instruments through craft/art galleries. All of them had a policy of a 100% mark up. Every crafter I've met is hardly doing more than supporting their hobby. It sucks.
Click to expand...

I've heard this so many times. There was a thread on a furniture making forum recently, many fine makers stating that they would be better off stacking shelves at the local supermarket. It's not always quite as bad as that but the ones making half a decent wage are probably few.
 
Well after those 21 years I am pretty well set. I doubt if I will recover my investment and were it not for a life changing event last year was projecting working way past 70 years old. Unfortunately we are soon going to be in the position of the guitar making fraternity - too many builders, not enough work. Those who got in at the beginning are going to fare better than all those Johnny come latelys..
 
As a pretty good sculptor a few decades ago, my galleries wanted to mark up my work 250%. A large bronze that would have cost me $2,500 to have the foundry do all the work left me no room to make any profit whatsoever because of that, so I did all the mold making, the wax pouring and retouching, and the finish chasing and patina and mounting on a marble base. That got my cost down to about $1400 plus I had to pay to ship to my galleries in Hawaii, Nevada, Arizona and Florida. The foundry made $1,250, I made $900, the gallery listed at $7,500, sold for maybe $6,500-$7,000. The recession in the early 90s finished me off. Then add in around $65-$70,000 worth of losses through theft and I was done. Now I walk dogs for a living.

With the internet providing personal websites, blogs, forums, specialized sales sites, and various ecommerce solutions, plus digital imaging and social media, and add in cheap phone service; self representation is the only way to go.
 
40% commission in the art world is on the low side. Some galleries in the bigger cities take up to 75% and more. If the artist doesn't like it, tough, next artist please!

Michael N. said:
Selling on a commission basis usually takes 20 to 25% + the VAT. The risk is all the makers and it costs nothing but wall space to the retailer. Of course they have their business costs, so one can't say it's entirely free.
If they are buying as trade they usually seem to want it marked down a considerable amount. His 40% is hardly unheard of (actually it can be greater). That's irrelevant if he has neither shop front or an established online business. He adds nothing.
My friend in the art world tells me that some galleries want double that 40%. . .
Click to expand...
 
BlackBearUkes said:
40% commission in the art world is on the low side. Some galleries in the bigger cities take up to 75% and more. If the artist doesn't like it, tough, next artist please!
Click to expand...

So true, the artist has it very bad....Most of the Galleries want at lease 50% to 60%, and many want more as Black Bear said,.... and sometimes the artist has to pay for all the advertising as well..... I don't know any artist who can make a living just with his/her art and who does not have a side job to pay the bills (unless of course they are independently wealthy...)
 
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