Jun 10, 2016
This is the
first in a series of 5 episodes covering the different areas of
selling and pricing your work. The goal with this series is
to discuss and help you find ways to sell your art,
create consistent revenue, and build relationships with
the outlets you sell your art through. Whether distributor or
retailer.
Today we are diving head first into selling to a distributor.
I personally sell my work through 2-distributors and
several retailers directly. The benefits of both allow for a
consistent income without putting all your eggs in one basket. On
one hand you have a catalog that has a broader reach of
distribution allowing more exposure for your line of work.
Most distributors take a 15-25% fee off the top of the
wholesale. If you sell an item for $10.00 wholesale the distributor
will then pay you $7.75 per item. If you calculate your time and
gas that it takes to drive around and hope to sell orders it is way
more beneficial to work with a distributor. When you first
start out I recommend starting off selling to a select
few shops and have then help you find the right pricing based on
their customers feedback. In the long run you can then fine tune
your line and become more consistent which you can then approach
the catalog companies.
When you begin building relationships with distributors it is
important to know that you will need to mail off FREE samples
giving them a physical sample of your work. This allows them to
settle on pricing and then if they accept the item they have it for
photographing it for their catalog.
If you decide
to go this route there are a few details to take
into consideration.
1. distribution companies tend to buy in bulk which means you
will need to be able to keep up with orders if your lines sell
well.
2. purchase
materials in bulk which will save you a ton in overhead. if you
order 6 or more cases then frieght will be an option to ship saving
you tons of cash in the long run. Wait
till companies like mountain glass have a monthly sale on
clear or a color company.
whether you buy your material in bulk or single cases always
estimate your cost to manufacture based on regular pricing, not the
sale price as well as always include shipping in the cost of the
case. if you buy a case of 1" hvy wall and it costs 130.00 before
shipping then the actual cost will be around 165.00- then
devide that cost by the number of tubes in the case.
Below is a basic calculation you can use when figuring out
cost of manufacturing your items.
How to calculate cost
of production
In this example I'm using
reference from internet which has material price based on length
.....
This is a generic
example
example 3"-wrap and rake hand
pipe
Material
breakdown :
2" section of simax 25.4 hvy wall
($8.00/60")
$0.13per inch or
$0.26(2"section)
1/2" section of color cobalt
firsts ($5.25/18")
$0.15
9" section 4mm clear for raking
($0.52/60")
$0.09
Estimated total for
cost of Goods
3"wrap and take spoon
($0.26+$0.15+$0.09)=$0.50
Propane/oxygen/power is pennies on
the dollar if you're able to get liquid oxygen. If you are renting
space you still need to calculate your estimated per hour rate. If
you pay $1500.00/mo(power,rent,gas) break it down
to per day then estimate how many hours you work in a day and use
that number as a base calculation.
$1500.00/month
(30-day month) is approx
$50.00/day (per hour in a 10-hr
day)
$5.00/hr (gases,power,rent)
If you can make
10-$5.00 3" wrap spoons per hour your
estimated cost per hour is $10.00/hr
(power,rent,gas)
$5.00+(material x's 10-hr) $5.00=
$10.00/hr. to manufacture 10-$5.00
spoons
Net-$50.00(10-$5.00
3" w/r)-$10.00(cost to manufacture)=
Gross approx
$40.00/hr.
In a 8 hr day do the
math
You can see just by
getting a good base line down for estimating your cost to
manufacture
you have the ability to
make anywhere from
$30-60.00/hr gross
profit
Gross=
income
Net =income-cost to
manufacture =profit
Now take 15% of your gross and put
that aside for TAXES !!!!
If anyone has questions feel
free to contact me info@wyzguyradio.com
GO TO WWW.WYZGUYMEDIA/RESOURCES FOR
A DOWNLOADABLE FILE TO FIND OUT WHAT YOUR BASELINE COST TO
MANUFACTURE YOUR PRODUCTS ACTUALLY IS.
WWW.WYZGUYMEDIA.COM