Are you competing with yourself?

Are you underselling yourself and breaking your contract? It’s so easy to do and you might not even realize that you are doing it. When you have a piece in a gallery, under consignment, or in a craft mall; do you sell it on your own website or in person too? Do you charge the same price that the gallery, consignment or craft mall does? If not, you could be asking for trouble.

If a gallery has your art dolls priced at $150 each and you sell them on your website for $100 – who loses? You do of course. Even though a gallery sale may only net you $75 – that is the wholesale price – not the retail price. If the retail price is $150, why should you sell them for 33% off? Are you punishing the folks who buy from the gallery? Won’t anyone who buys from the gallery feel cheated? Do you think they are apt to buy any more of your dolls?

Are You in Breach of Contract?

A far bigger problem may arise when the gallery owner finds out that you are under-cutting their prices. Why should they continue selling your items if you are going to steal sales back from them? If your contract gives the gallery “exclusive rights” you might even find yourself in default of your contract with the gallery. That means they can sue you for breach of contract. Doubtful that they would go to that extreme; however, it would be likely they will not renew, put your items in the worst place in the gallery, or pull your items from display.

Unless you are selling a particular doll that is “on sale”, it is never smart to under-price your own items. It isn’t professional and will only dirty your name as well as drive down the prices of your items.

Maximizing Revenue

All of this leads to knowing your product and how much you can sell it for. Suppose our art gallery sells 86 of your dolls per year, netting you $6,450. If you sell your dolls on your own website and keep 100% of your reduced sales price, you would have to sell over 65 dolls to equal what the gallery does. Feel confident you can do that? You might need to decide if the gallery is helping or hurting your business overall.

Besides, wouldn’t you rather sell 65 dolls on you site for $150 and net $9,750 (instead of $6,500) plus whatever the gallery sells? I’d much rather keep on good terms with the gallery and yield the highest possible income from my work. Besides, if they can sell 86 of your pieces a year, why would you want to throw that away and perhaps it’s even time to raise your prices.

Premium Prices Direct from the Artist

I’ve seen some artists, when selling their items on their own, flip this dynamic. The gallery prices are below what they sell similar items for. This way the artist can maximize their profits and turn the gallery into the lower-priced alternative. This does have some merit when you think about it; particularly if the artist sells online and the gallery is off. Customers at the gallery can be introduced to your artwork at ‘introductory’ pricing. This also helps to build your reputation within your community. And those who want more and are hopefully willing to spend more for it can visit your website for more information about you, your work, and other pieces. (You do put tags on your items with your website URL – right?)

Another way to approach this is to offer a particular line, size, or style at the gallery exclusively and then never sell those items yourself. This might limit the reach of your items, but it will help to keep your pricing consistent and prevent you from competing with yourself. One pitfall may be a loss of control for pricing on those items in the gallery – if you find the gallery turning into a loss center, it may be time to break your ties with them.

Is the exposure worth it?

Galleries, consignment shops, and craft malls can be wonderful ways to get your name known and your art seen; but you have to consider what the accompanying agreements can do to or for your pricing and whether or not they can actually harm the sales volume of popular items.

If you are a gallery, consignment shop, or craft mall owner – what’s your compete policy? Do you have one?

If you are an artist who has been in this situation – I’d love to hear what happened and the outcome.

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