What % commission should shops charge?

[mr dazzler]

Can I ask please, of any one who makes item's and sells through craft shop's/galleries/etc, what is the going rate of comission that a retailer should be charging, realisticaly, if your trading on a % basis? I have had some interest shown in my spoon's and ladle's, from a gallery which is due to open in late summer. I thought if other folk who have already done this type of deal would be willing to share there insight and experience, it would help me greatly to negotiate a fair rate.
Many thanks Jonathan

 

[British Red]

I used to work the other side of the fence Mr d.

50% is pretty average (of their selling price). Bear in mind of the sale price around 15% is VAT (or 17.5% or 117.5 if you like) so that leaves them 35% to cover rent, rates, heat, light & staff before they see a profit. We used to see people wince when we said that number but we had to pay the shop space even on stuff that doesn't sell.

If they offer you much under that I'd grab it. Not sure on the VAT rules though as they used to be weird on treen over a certain age - if theres no VAT you might do a bit better

Red

 

[Theo01]

I sell leathergoods at a craft type shop/ gallery. Their going rate is 45% (to them) - so not great if your trying to make a living out of your work, but as a hobby it can be quite satisfying when you do sell something.

 

[tommy the cat]

I deal in some bits as a retailer but we tend to buy the item and then sell on. Some people want a sale or return deal which I cant be ard with. Vat sucks and it has to be taken into account.Dave

 

[Eric_Methven]

I've found 50% to be quite common. Most sellers will do a 100% markup if they are buying directly from you to resell. If selling on your behalf, 50-50 as I mentioned.

I've had to drop a few sellers because of it. I sell my leather flasks for £40, many on here who've bought one will know that. There's a guy who really wanted me to make some for his shop. We agreed that £40 was around the right mark, but he wouldn't give me more than £20 per item. I politely told him where to get off. The advantage I have is the living history events where I can sell my own stuff for the full price so I don't have to rely on middle men. Also, it's basically just a hobby now as I'm almost retired (in all but name) so I can pick and choose what I make and when I sell it. No pressure.

Eric

 

[robin wood]

Sounds like you were very generous Red, I have come across all sorts from your 50% mark up including the VAT to several that double then add VAT on top so I would get about 40% of the sale price, to be fair that is more typical of museum shops, national trust shops and the likes which is why they are full of mugs, tea towels and other tat that will stand the mark up.

The other issue is are they going to buy it off you and sell it on or are they going to ask you to do sale or return...ie you drop the stock off and if they sell any they pay you for it. In my book if that is the case they should be working on less commission than if they buy stock off you. Sale or return is hassle for you as not only are you subsidising their stock but you have to manage the stock...keep a list of what you deliver etc all extra hassle. My policy when I briefly sold through galleries was only ever to accept sale or return on the first delivery after that they should decide if they want to stock them and if so should buy them off you. I would always offer to exchange anything that didn't sell quickly.

Personally I like to sell everything direct, I think the customer gets more out of it if they have some dealing with the person that made it....websites are comparatively cheap and easy direct marketing tools or do demonstrations at craft fairs and sell your work there.

 

[mr dazzler]

Wow I'm astonished Thanks for the very fast replie's :You_Rock_
Thanks for the advice, please keepit coming.
I reckon if I was to supply gallery/shop's etc I'd have to deliver as well, AND collect if they insisted on sale or return (if they didn't sell). Do they sometimes do a trial "sale or return" on a new maker or line of good's to see if they will sell, and then commit to buy some retail stock after that? From what you have said 50% commission seems about average and that from several different places around the UK too.
It's a bit bewildering knowing how to proceed, sell to established outlets (the one I mentioned isnt the only craft gallery in east anglia) If they already have a established clientelle the extra cost might be made up for in extra sales. Without a name and a reputation your mister nobody, how do you build that at least expence?
PS Robin I really would like to be in tat free locations (ie no fairy's, incense, posie's etc ) Also Robin what rate would you try to negotiate to for sale or return as you said it should be less in your book, if 50% was about average for bought stock?
The demonstration route sounds worthwhile if you get a fixed fee or whatever AND generate enough interest to make some sale's on top. Does the host take a % of those type of sales, as a rule, or is that just down to you and the buyer?

 

[Eric_Methven]

The demonstration route sounds worthwhile if you get a fixed fee or whatever AND generate enough interest to make some sale's on top. Does the host take a % of those type of sales, as a rule, or is that just down to you and the buyer?

As a rule, I negotiate a demonstrator's fee well before the event which I will invoice for afterwards. During negotiations I will broach the subject of selling my products directly to the punters. If the answer is no, my demo fee goes up. If the organiser wants a percentage of my sales, the demo fee goes up. If the organiser agrees that I can sell whatever I want and I get to keep it all than I just charge the basic £200 per day for demonstrating. Having said that, I give value for money and get dressed up in period costume. I don't do events where I have to pay for a stall. I only do demonstrations or 'have a go' events. That way, they always pay me. I've done a couple of events where I didn't get paid for demonstrating, but those guaranteed a massive footfall and loads of selling potential.

Incidentally, if you decide to do demonstrations, take someone else with you to do the selling. I've lost tons of sales because I've been in the middle of a demo and people couldn't be bothered waiting till I've finished the session. Now I mostly take Cameron, my grandson and he, although only 10 could sell snow to Eskimos. He get's a commission though on what he sells for me. Oh, and you'll also need public liability insurance (currently around £100 per year for craft demonstrators).

Eric

 

[Toddy]

Thing is those 'tat' shops are the ones where people expect to pay for handmade items.
They sell a lot of stuff.
You could always have two names, one for shops like those and one for shops where you are happy to be 'seen'.

I don't sell through third parties, too much bother tbh, but 50/50 is the normal split around here too. Craftworker supplies all materials and the shop supplies promotion, space and wrappings. Some shops will supply materials and then the rate drops sometimes to 35/65, though I do know of one where they supply wool and the braidweavers only get 25% of the sale price

cheers,
Toddy

 

[Mike Ameling]

On this side of the Pond, and waaaay out in the middle of the country away from big cities, 40% to 50% is pretty common. Some places will buy to stock their shelves, but most want you to maintain the inventory at your own expense/time. The take stuff in to sell "on consignment". But there are some places that will buy from you at wholesale, for retail sale in their shop. It all depends upon what you make and what they see as a potential market.

But there are always those places that view anything you made just like all that cheap cr*p imported from India, Pakistan, or Red China. They want your quality workmanship, but at that "junk" price. Plus, more than a few think you actually did import it instead of make it, and they want you to chop your price down to barely above what they think you paid to import it (excluding the cost of shipping also).

There are good places and there are lots and lots of "junque" shops - in both what they sell and what they might buy. In the end, it is often better to sell direct - either at some sort of event or farmers/craft market, or over the internet. It takes lots more time, but you can usually get a better final price.

No VAT over here, just a "manufacturer's" tax if you make enough, or that Sales Tax at the time of the final sale to a customer. And that Sales Tax gets paid by and collected from the customer at the time of the sale. Or the seller gives an after-sale discount to the customer by paying that sales tax themselves. Current for Iowa is 7% sales tax.

A GOOD consignment retail store will work with you. They will "work" to earn that commission of 40-50%. But too many have an "I don't care" attitude. When you find a good shop, do your best to work with them. You and they both should be able to be happy with the deal you arrange.

Just my humble thoughts to share. Take them as such.

Mikey - yee ol' grumpy blacksmith out in the Hinterlands