Wholesaling your line to retailers? A gallery owner shares what she wishes every artist knew.
In her role as the former owner and buyer for Craft Concepts in Baltimore, Maryland, Carole Halverstadt worked closely with artists for over 36 years. As a wholesale buyer, she selected work carefully from artists’ collections, mostly at trade shows, and placed orders for her retail store.
Building close relationships with vendors taught her a lot about making a business work. She shares some advice on how artists and their wholesale customers can work together as partners.
“Artists must understand about pricing,” she says. “It’s not realistic anymore to expect that your store buyers will keystone (double) your wholesale price. It must be higher.” She explains that eventually she used a 2.5 markup formula to be able to cover store expenses and make a profit. High rents, shipping costs and the fact that it takes longer to turn higher-end handmade work often make this type of markup necessary.
Artists who use this business model will have written a profit margin into their wholesale price to begin with. Since retailers determine their markup, retail prices will vary. Artists should have a good grasp on what their work is retailing for in the stores that feature their collections; this enables the artist to set their own retail price if they sell direct to customers, and avoid undercutting their gallery customers.
Other important “musts” for artists include always being up front about when delivery can be made, and calling if an order cannot be shipped on time.
“Never ship a partial order, or substitute merchandise without contacting your wholesale customer first,” she advises. Stores plan their delivery dates carefully so that inventory will arrive at certain times for display. Unexpected delays in shipment can cause big problems, and it can negatively affect your business relationship and future orders.
“Artists should also know that Net 30 terms mean that the retailer has thirty days from the date of receipt of an order to pay the artist, not the date of shipment,” she says. “When the artist is aware of the way store buyers plan and make invoice payments, they can avoid frustration and misunderstandings.”
Lastly, she spoke about avoiding C.O.D. orders, which are impractical and costly. This arrangement is outdated and unnecessary in her opinion.
“Instead, work out a deal with the buyer for a 50% deposit with the balance due after delivery,” she suggests.
The more clearly artists understand the needs and practices of wholesale buyers, the better they can anticipate and work closely with them for mutual benefit.