Selling your wares

Well you have just created another masterpiece on your lathe. The problem is the your house, your family and friends are up to their necks in your output - what are you going to do with this one! The answer is to sell it!

There are essentially 4 ways to sell your wares and this article examines the options and the pitfalls. The 4 ways are Galleries, Shops, Fairs and The Internet. The 5^th way, Car Boots, is not given credence for quality work such as ours!

I will deal with Galleries and Shops as one since the principles are the same. There are 2 options "Sale or Return" and "Trade Sale". Galleries will tend to be Sale or Return and shops can be either.

Sale or Return is the most likely until you and your work are known to the Retailer. With Sale or Return the outlet takes your goods and sells them at an agreed price. They then retain a % as commission. If they do not sell you get them back. Very simple - well maybe not quite that straightforward.

• As a principle YOU retain title to the goods until they are sold to the customer thus if the retailer goes bust - the goods are still yours. Given this you must agree with the Retailer who is responsible for breakages and shortages - they will happen so agree at the outset.
• Commission should be between 30% and 50% agree this and also when and with what frequency payment will be made to you.
• Many retailers are very vague and ill informed about VAT. If they are VAT registered they often believe that the whole of the sale price is subject to VAT - it is not, just their commission. This is critical for you to know as the retailer may demand high commission rates to cover his perceived cost of the VAT. This is again to do with title - title remains with you until the Retailer sells the item on your behalf. Never forget this principle.

Trade Sale. If you make a trade sale then the Retailer takes title to the items once he has made payment. They are his from then on. If they do not sell ... well it’s his problem, but he may not buy from you again.

• Because the Retailer is taking the sales risk he will expect to buy from you at "trade price" - this typically could be 40-50% less than you might sell it for at Retail.
• Taking the price he pays you the Retailer will then typically multiply it by 2.35 to get to his selling price (100% profit + VAT). If he is exempt from VAT (turnover less than £70,000) then he will multiply by 2. You must therefore work the other way around to fix your sale price to the Retailer at a level that produces a "reasonable price for that market" after the Retailer’s multiple is applied. As an example an item that may sell for £30 my have to be priced at a trade price of only £18 to allow a Retail price of £42! If the wood cost you £10 then your margin is very slim.

Craft Fairs.

In the next article I will deal with operating at a craft fair in detail here I will cover the essentials in making a decision to attend a fair. Not all fairs are the same - by any means - and anyone who has done them on a regular basis will tell you disaster stories. They will happen to you as well - it’s inevitable, but I hope these notes will help eliminate some disasters!

• Check out the Operator to find out his reputation. I did a fair with a really nice Operator, so pleasant to deal with and very helpful - BUT his fairs were a disaster. So check up what you can expect.
• Ask how many other wood turners will be there - often filling tables is more important than quality! Any more than 3 and it had better be a big fair. I once found 6 of us - I did not cover my table costs!
• Ask how many people can be expected to turn up - you may only expect between 2-6% of attendees to buy something from you.
• Check what advertising is being done.

• Avoid week 3 in the month - most people are paid in week 4!
• Outside - well it’s up to you but remember our stock does not like rain. A sudden shower of rain can ruin your profits - and some!
• Stall cost - well anything from £10 to £200! I tend to work on a maximum price of £35 per day - I am just not prepared to spend time in my workshop making £400 (at 50% margin) of goods just to pay for a table. This is just my view - others I know only go for a few big events. Just remember that a bad day at £10 is better than a bad day at £200!
• Target - I work on a 6x multiple target. So if the stall costs me £20 I expect to take £120+. The rationale for this is that I make a 50% margin, so 2x stall cost pays for the stall, 2x stall cost pays for fuel and on-costs and 2x stall cost is my Gross Profit. This is an expected minimum - I aim for more and question less.