MarkN1975

Selling through retail outlets

Recommended Posts

How much of the sales price should I expect the retailer to keep if they sell my furniture?

I'm being offered 60% to me and 40% to the retailer.

I just got my first product into a small furniture gallery/store.

I was expecting to get more for it than the deal they are offering me but I have nothing to go off.

Any ideas?

Share this post


Link to post
Share on other sites

I have a small awards business that I run out of my home.  At times I do business with another company that sell sports uniforms and screen printing an the like but they do not do awards.  Occasionally they will get a customer that contacts them about awards, in those cases they get a quote from me and if they can still mark it up some with out sticking it to their customer then we go ahead and work together.  If it works out were there is no margin for them then they may just refer the customer to me.  What I have always told them is I am doing the work, all of the work and I can't lower my price to help them make a profit.  If it works it works if not...  Now this is a bit different but I am operating on a pretty small margin to begin with.

 

Personally I think 60  - 40 is slanted in their favor to much, your materials your labor.  Maybe you should tell them sell it for what ever you want but I need X dollars out of the deal.

  • Like 1

Share this post


Link to post
Share on other sites

Who is setting the price for the piece ? You or them ,if it's you just mark it up higher to off set the difference. I think 70-30 would be fair.

Share this post


Link to post
Share on other sites

Who is setting the price for the piece ? You or them ,if it's you just mark it up higher to off set the difference. I think 70-30 would be fair.

I tried but they set the price in their store based on what they think it will sell for. I wanted to price it (a live edge console table on black poplar legs) at $1200... They said they will price it at $995.

Share this post


Link to post
Share on other sites

60/40 is pretty standard. And yes they will know their market & what it will sell for.  (if they didn't, they'd go out of business)

Share this post


Link to post
Share on other sites

The only place I've tried this at was in Arlington.  They let you set you price, then they just tack on 30% (or more if they think you undervalued it).

 

I did have some pieces at a consignment shop, rate of 60/40, but nothing sold.  I was hoping they could offload some of my practice pieces...

Share this post


Link to post
Share on other sites

My local shops are 40% as well.  Needless to say, I don't have any pieces there.  To get what I need out of it plus their 40%, one of 2 things has to happen.  Either I get screwed or the piece is marked up to a point that it's not going to move.

  • Like 2

Share this post


Link to post
Share on other sites

I think part of the problem too is that most people in society no longer put a value on true workmanship or maybe they don't even know it when they see it.  It seems that people want stuff but won't want to pay for the effort it took to produce the quality.

Share this post


Link to post
Share on other sites

I think part of the problem too is that most people in society no longer put a value on true workmanship or maybe they don't even know it when they see it.  It seems that people want stuff but won't want to pay for the effort it took to produce the quality.

 

This is a very fair point!  There's a reason that Ikea does so much business!

Share this post


Link to post
Share on other sites

theres a reason i don't do craft shows, your piece with 12 mortice and tenon joints, pegged and 5 coats of finish is setting next a piece of junk that looks like yours at 1/4 the price you don't have much chance of selling anything, most people don't recognize quality furniture, thats why i stick to custom woodwork

Share this post


Link to post
Share on other sites

 A lot of guys believe there stuff is special. 9 times out of ten with this sort of stuff will cost the merchant more to sell the stuff than it cost to make. At 40% they are not making squat unless it sells in less than 30 days.

Share this post


Link to post
Share on other sites

 A lot of guys believe there stuff is special. 9 times out of ten with this sort of stuff will cost the merchant more to sell the stuff than it cost to make. At 40% they are not making squat unless it sells in less than 30 days.

 

This is true if we assume the merchant could easily replace what you have with something that is guaranteed to sell.  The fixed operating costs (overhead) get paid no matter what is stocked in the store.  Selling a specific item doesn't have a direct cost (except for sales tax), it has an indirect cost (conventionally known as opportunity cost).  Unless stocking an item directly impedes the sales of other items, it has no negative effect.

 

A good example would be tables: Replacing a crappy display table with a custom piece for sale has no opportunity cost, as it has displaced no sale items, and improves the atmosphere in your shop.  If however, you replaced a shelving unit full of chessboards (we'll assume that they sell very well) then the opportunity cost of adding a table to your inventory would be the sales of chessboards...

Share this post


Link to post
Share on other sites

This is true if we assume the merchant could easily replace what you have with something that is guaranteed to sell.  The fixed operating costs (overhead) get paid no matter what is stocked in the store.  Selling a specific item doesn't have a direct cost (except for sales tax), it has an indirect cost (conventionally known as opportunity cost).  Unless stocking an item directly impedes the sales of other items, it has no negative effect.

 

 

 

Any good retail model is based on gross profit per square foot. Sales tax itself is not a cost. The only part of sales tax that is a cost is the cost of accounting such as paying the accountant to file monthly returns to the state. An opportunity cost is the loss caused by not using the space in one way or another. For example I know I can make a GP of $20 per sq ft selling widgets but I like this table better. After I sell the table I can calculate opportunity cost. If the table makes a $10 per sq. ft GP then my opportunity cost is $10 per square ft meaning my profit is $0.

Share this post


Link to post
Share on other sites

Any good retail model is based on gross profit per square foot. Sales tax itself is not a cost. The only part of sales tax that is a cost is the cost of accounting such as paying the accountant to file monthly returns to the state. An opportunity cost is the loss caused by not using the space in one way or another. For example I know I can make a GP of $20 per sq ft selling widgets but I like this table better. After I sell the table I can calculate opportunity cost. If the table makes a $10 per sq. ft GP then my opportunity cost is $10 per square ft meaning my profit is $0.

 

My point was more that it is an opportunity cost than an actual cost, which is what I thought you were implying in your post.

 

Also, if you sub out widgets for cutting boards, we used the same example, but with numbers  :)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.