sales
How to Navigate the “Exposure Economy”
In the digital age, our unpaid intellectual contributions to cyberspace put us all in the business of lead generation. We are ultimately casting our insights and ideas as fishermen cast their baited lines into a dark and deep sea. We are fishing for opportunities, unsure of exactly what we might catch, but cautiously optimistic nonetheless.
The new system that’s arising looks something like this: free work filters out on the web, garners favorable exposure, which in turn leads to some form of (delayed) financial reward.
read more here
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The Art Thief’s Guide to Creating Work That Sells
What makes art pieces so valuable and enviable anyway? What about it drives thieves to take on some of the most advanced security systems in the world just to lay their hands on it? And most importantly, how can you start creating more work like that?
read Tyler Tervooren’s post on Lateral Action to find out how
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The creative brief: are you doing enough?
Thought provoking research into the creation, value and effectiveness of creative briefs by Jasmin Cheng
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Does the world need more cushions?
When you look at how retailers place cushions in store you can see why they are described as the ‘lipstick of interiors retailing’. In retail outlets they are the impulse purchases and are priced accordingly. Think about it do you really have light bulb moments of ‘good heavens I really must buy a cushion or two’? Whilst they are indeed high volume sellers for retailers and easy buys for customers in areas of high footfall would you really go trawling Etsy looking for a cushion???
Why then, would I argue that they are not what textile designers should be building their business upon if they do not already have a fairly substantial wholesale business to interiors retailers?
It’s certainly true that cushions are relatively inexpensive to make (assuming you’re a textile designer) and in part this is because they use relatively small amounts of fabric and the design is straightforward. However they are not aspirational design objects and folks whose designs end up being sold on cushions certainly didn’t start out by targeting that part of the market … no, no, no they are much more likely to have built a larger range to create a look (think Cath Kidston, Orla Kiely, Emma Bridgewater). So the message here is get known for something substantial and the cushions will follow in their own good time.
My observation based on working with small design firms and textiles designer makers is that the decision to add cushions to your product range is often not driven by knowledge of the customers’ needs, but instead by a view of what would be simple/easy/low risk to produce. I hate to be difficult but honestly, this just ain’t good enough if you want to be seen, bought and respected.
One alternative is to find the resources to make something stunning and outstanding, which will get you noticed and use this as a calling card for commissions and sales of other (safer) products.
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How to successfully approach retailers and buyers
A post from our partner Cockpit Arts Making It blog:
The world of selling can be a daunting one, so we asked Southbank Centre Retail Team’s Adam Thow and Katherine Walsh’s and Cockpit Arts Open Studios Manager Catherine Zoll for their top tips to help you get through the door of major retailers.
1. Be professional
Buyers are approached every day and get numerous messages from people who don’t supply the right information. If your contacting a buyer make you include good quality images and a wholesale price list so you stand out from the crowd.2. Do your market research
It’s crucial that you do your homework in advance of making any approach to a retailer. Visit the shop in advance so that you get a greater understanding of the type of customer that they are targeting and the ‘story’ that the shop communicating – retailers are looking for products that sit well with the “personality of their shop”. This saves time and demonstrates your understanding of the retailer. Also look at the other type of work that they’re stocking in terms of pricepoint and be careful not to try to compete with work that they already have.Be careful and thoughtful about who you approach. Ask yourself is this really right for my image, the way I work and my products? Choose shops and spaces who are a good match and strengthen your brand or identity. A good way to work this out is to look at the type of customers they attract – are these the type of customers you want to attract?
3. Be enthusiastic
Don’t be afraid to be different and let your personality shine through!4. Be prepared
Be clear and confident in your presentation and approach. Make sure the retailer understands your lead and delivery times; provide them with information about how the work is made to strengthen the object’s inherent value. But don’t overload them – make sure information is relevant and useful!5. Images are key
Make sure images are the best you can afford. They should show your work clearly. Choose a selection of detail shots, pieces in situ and whole items so retailers can instantly see the quality and nature of what you produce.Coming up…we’ll be posting some top tips on how to develop a product specifically for retail so watch this space!
About the author
Adam Thow, Head of Retail & Buying at Southbank Centre
Adam has been Head of Retail & Buying at Southbank Centre since 2008, with responsibility for the overall performance and ranges in the site’s three shops and online. www.southbankcentre.co.ukKatherine Walsh, Buyer and Merchandise Manager at Southbank Centre
Katherine is the Buyer and Merchandise Manager at Southbank Centre since 2007. Katherine has a wide range of experience in the retail sector and since joining the Southbank Centre has developed strong ranges for major shows at the Hayward Gallery including Psycho Buildings and Andy Warhol. www.southbankcentre.co.uk
Catherine Zoll
Cockpit Arts Open Studios Manager, Catherine Zoll, has extensive experience of the retail sector for craft, having managed projects for museumaker, Crafts Council Shops, V&A and Dazzle.
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don’t be afraid of the S-word
Ever lost a project bid that you thought was in the bag? Do you think that your creative portfolio speaks for itself and that you don’t need to be a salesman too? This has happened to Uzi Shmilovici and in his guest post for 99%, he explains how he rolled up his sleeves and created a simple seven step sales process. Now he wins more of the deals he wants.
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Turnover & Indirect Costs
This post is a complement to the analysis undertaken for Artquest in the March – May 2010 newsletters. For more details on our partnership with Artquest click here.
Remember – a short column is a good thing in this graph … you don’t want to spend too much of your income on your overheads!
The lesson in here is a simple one – there are some folks who are either in start up phase or have some investment so their cost base exceeds their income (anything over 100% on the graph). This is clearly unsustainable in the long term so the ones to emulate are those in yellow (ie with higher income) and in the average or minimum clusters on the graph.
Sounds daft but you don’t want to be in the brown column in the maximum section as this means you have very little income and yet your costs are way high!
If you’re a MyCake user you can benchmark your own data (rather than just look at these general results) from in the results section of the benchmark. See this post for a how to guide to reading your results.
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Using statistics to get the most out of your clients…(among other tricks)
This post is a case study from Phil Nicholas, a music industry professional managing Emily Barker (a folk artist) and running a record label to release her music.
It is a time of rapid change in the music industry. Tried and tested ways of reaching customers, the products themselves and income streams for artists and record label have largely been replaced over the past five years and whilst the internet now boasts myriad ways of monetising your music product, many of these business are still in relative infancy.
The challenge is varied: people are buying less CDs and downloading instead, thus margins for labels and artists have been slashed. The piracy of music versus legitimate downloads has been a big issue, but coverage of this phenomenon often misses the wider point that now customers have experienced ‘free’ music, it is difficult to get them pay for music, even when legitimate outlets gain huge worldwide status (how many of you, for example, know that Amazon.com’s mp3 download store offers better quality mp3s for the same cost as iTunes, the market leader by a long stretch?)
Although reaching your current customers as well as gaining new ones still occurs via traditional methods such as press & radio campaigns to promote album & single releases and live touring, these are crowded media. Massively increased use of the internet has spawned new methods of fan contact and nurture via social networking sites, targetted content delivery (signing up for RSS feeds and email newsletters) and data collection at point of sale. The beauty of online trading is the ease with which data can be collected and presented to the user.
An example of this is online store Bandcamp.com, which is still in development but with tens of thousands of users. It allows the artist or label to sell both digital music downloads alongside physical product. The neat management tools supplied to the store owner include a stats page which lists the number of visitors listening to tracks on your page, purchasing items and importantly, from whence they arrived upon your page. Thus we can tell that over 50% of net traffic to our bandcamp page (http://emilybarker.bandcamp.com/) during the month of January has come via an embedded widget on the number 1 Wallander fan site (http://www.inspector-wallander.org/index.html). Needless to say we will be placing future advertising with them.
In order to widen our customer base (potential CD or download buyers and gig-goers) we employ a service at Musicglue.com which simply captures customer emails and location in return for a free download. The advantage of grouping your fans by location is to be able to inform them of events taking place in their area, a live show, for example.
These websites and other like them are becoming evermore simple for users to customize and exploit. So whilst a playlisting on Radio 2 and a national headline tour remain the most powerful ways of promoting an artist and generating merchandise sales at gigs plus CD sales over the internet and on the high street, a new artist looking to maximise earnings from lower-priced items sold in small quantities, can confidently monitor customer behaviour and collect payments on a global scale from the comfort of their home studio.
Phil’s next post will centre on how to fund the recording of an album when record companies are spending a tiny fraction of their previous expenditure in this area…..
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Reality checks – setting sales targets and more …
Continuing the theme of sales, we welcome back Ellen O’Hara, Head of Business Development at Cockpit Arts for this post on setting targets. Look for a free worksheet to download towards the end of the post.
Some tips, tools and learning on calculating an annual sales target for those self-employed, product based businesses among you. These are drawn from a workshop series entitled ‘Creating An Outline Business Plan’, which I recently delivered at Cockpit Arts for an enthusiastic group of self–employed designer-makers.
The first workshop began with some exercises on defining success and articulating values. Each participant’s tasks was to clarify which rewards they were hoping to reap from their self employment.
It was pretty clear that most people had no problem describing what they wanted to gain in personal and creative terms. However, most of the group had trouble defining financial success and what money meant to them. I recommend working through these exercises as they can be quite illuminating – a worksheet can be found on our website here.
So, as we moved on to ‘goal setting’, we spent some time discussing ideal levels of drawings – i.e. the amount you take from the business for personal use when you are self employed. This figure ranged enormously from person to person, but overall, most makers were aiming to generate enough profit to enable them to pay themselves at least £30k pa in the medium-long term.
Using break-even analysis as the basis, the group then spent some time with their calculators working out what level of sales they would need, at current costs and prices, in order to achieve that level of target drawings and cover other costs To do this for your business, you will need:
- Total annual fixed costs: including studio and related costs, marketing and sales costs, administration, any permanent staff.
For example £10,000.
- An annual drawings target: i.e. the amount you would like to pay yourself from the business.
For example £25,000.
- Average selling price for one unit of your work: if you find this tricky, you could use the price of your best selling product, or a mid point between wholesale and retail prices.
For example £150.
- Average variable cost for one unit of your work: this would include materials, small replaceable tools, production outworkers, packaging if you always supply this with your work, research and development costs and other costs related to the production of your work. Again you may wish to use your best selling product as an example.
For example £40.
Step 1
Sum your total annual fixed costs and drawings target.
£10,000 + £25,000 = £35,000. We’ll refer to this as A.
Step 2
Subtract your average variable cost per unit from the average price per unit to work out the profit per unit.
£150 – £40 = £90. This will be B.
Step 3
Divide A by B to give you the volume of sales you would need to achieve in a year to cover your costs and acgieve your drawings target.
£35,000 / £90 = 389 units
Step 4
Finally, multiply this volume by the average selling price per unit to calculate your annual sales target.
389 units x £150 = £58,350
Bear in mind that this assumes fixed costs and prices, and doesn’t account for you putting cash away for next year’s tax bill or retaining profit to invest back into the business. It does, however, start give you a clearer, more realistic idea of type of business activity you need to engage in order to become sustainable.
The exercise raised some interesting issues among for the group. For some it illuminated the need to increase prices in order to improve unit margins, which in turn raised questions about repositioning and branding. For others it emphasised the importance of streamlining production in order to increase production capacity and productivity. For others it was all about controlling costs.
Recent research from Cockpit Arts shows well performing, sustainable designer-makers are generating sales in the region of £65-£70k. But this is with net margins of around 40%.
So what do your figures tell you?
For ease you might want to use this breakeven tool, which you can incorporate a retained profit target into. Download worksheet here.
Ellen O’Hara, Head of Business Development at Cockpit Arts.
A summary of out recent research report can be found on our website.
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What’s the difference between your ideal rate and the minimum you’ll accept?
In the last post on the subject of how you price time, we looked at what your ideal daily rate would be.
In this post we’ll look at how you might actually offer a range of rates (you might not publish this but you might negotiate it) depending on what the work is and how busy you are. We’ll also look at how you move this range upwards over a period of years.
Using the same example as before, where you want to:
- to charge £750 per day
- to sell 100 days of time in a year
- therefore to turn over £75,000
- assuming £25,000 of costs achieve a taxable income of some £50,000
In reality you may not be able to charge this top rate for every job. There are a number of reasons for this:
- the market rate for your skills and your level of experience may not be as high as this so if you charged it you’d price yourself out of the market
- you may take on work for which you are over-qualified, particularly if you’re not as busy as you’d like to be and need the income … but you may therefore not be able to charge top rate for the work
- you may choose to over-deliver. .. spending more days on a project than actually budgeted for
- you may have some clients whose budgets are simply smaller, yet they offer exciting work so you drop your rate in order for them to be able to afford you (in these cases the work had better be exciting!).
In practice you may well need to have a range of daily rates, and the rate you quote to the client depends on what the work is, what sector they are in, how much you need to the income etc.
So if £750 is at the top of your range what is at the bottom? Only you can answer this – what fee is so low that you’d rather spend that day having a lie-in or a holiday?
For the purposes of this post let’s say that the minimum rate you’ll accept is £250/day.
Now your range is from £250-750 per day.
How can you move this range upwards over time?
Well for a start always quote your top rate when you’re busy. If you’re not really earning enough consider what projects you might take on at lower rates … one of the keys here is not to burn your bridges with cheaper clients when you’re busy and to be humble enough to go asking for work when you need it 
Over the years move the range upwards so that both your top and bottom rates go up! This may require you to drop some of your least well paid work and perhaps the clients that offer it simply because they may not be prepared to pay more for that work and may prefer to hire someone else without changing the rate. Such is the price of success!
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