The Artisan’s Dilemma

There is a point on the road to financial success where almost every artisan has to come to grips with an agonizing decision for which there is no single good answer.

What brings it on?

As an artisan, you finally arrive at this point by creating work that people get excited about, start buying, and telling their friends to buy while it is still available at a bargain price.

You have created something that is not only remarkable, but is recognized as being more valuable than the price you have set on it. If you are selling at craft shows, you see this development as soon as it occurs. Your new pieces start moving off the display tables almost as fast as you can put them out.

You have that incredible elation that comes with finally getting it right. Customers love your new design and actually buy it! Your heart fills with joy. You may actually be able to make a career out of your craft work, after all. A brighter future seems to be opening up before you.

If you have placed your work in a gallery or store, you are pleasantly surprised when you are given an order for more pieces. If the earlier work had been placed there on consignment, you might even find the gallery or store is now willing to buy your production.

You are now starting to see the rewards for all of your hard work and you start producing the next round of pieces to sell. You throw yourself into a flurry of activity, buying raw material, setting up a more efficient workspaces and producing new work at the highest rate you can manage.

Somewhere during this mad rush, it begins to dawn on you that your bank account is still going down, even though more money is coming in than ever before. There is this chilling realization that it is costing you more to produce these treasures than you are taking in. You are losing money on every sale…

The dilemma

You must make a decision. You cannot continue doing what you are doing. You must either raise your prices or lower your costs. There are major difficulties with either choice.

The choice will depend on your particular craft work and how much labor goes into the final product.

In the case where costs can be reduced by product redesign, you must deal with the problem that a slightly different, and less expensive, design will be perceived as less desirable than the original design which attracted the attention of buyers.

The analysis of the dilemma and various solutions for it merit a separate treatment in a series of later posts. Stay tuned for more articles on this vital topic.

Meanwhile, feel free to suggest your own solutions to this dilemma.

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0 Responses to The Artisan’s Dilemma

  1. outback says:

    How about being honest? Start out by mentioning explicitly that this is an introductory price only.. for a limited time.. and later on, if there is continued demand, raise your price.

  2. Sean Pecor says:

    Yes, I agree with outback that introductory prices are a good way to prime the pump. However, for me, an Artisan is someone who creates something that is worth far more than the sum of all parts. So once the pump is primed the Artisan should be able to profit from their work as much as they possibly can. Which, to me, means gradually raising the price until sales balances with a certain production volume.

  3. Marti says:

    I think I’d try raising the price first, and see if the market would bear it. If sales fell off, then consider lowering quality to cut costs.

  4. This post is based on real-life situations, of course, so I will try to fill in some of the background to give you more to work with.

    The artisans I know did not perceive the price as introductory and were hesitant to ask more because there was no experience with comparable products.

    They also had figured their costs on a very small production sample and on raw materials that they had in inventory possibly for some time. You might even say that this initial sales effort was actually a marketing survey to see whether people would buy what they had created.

    Typically, one does not strike a home run on the first or even the fifth product offering, so when the product sales begins to take off, it is a welcome surprise to all concerned.

    Raising the price to cover actual costs and labor while simultaneously striving for more efficient production is a usual response to this situation.

    The “iffy” part of the dilemma is whether the demand is elastic enough to support a higher price. In the absence of comparable products, it is hard to predict how high the price can be raised before demand falls off drastically.

    I wonder if any of my artist friends have tried to solve this by leaving the price alone and concentrating on more working more efficiently.

    Perhaps the solution is different in a craft fair environment, because prices can be changed rapidly during the day as the opportunity presents itself. There is certainly more room for negotiation and that will give the artisan a better feel of the prevailing price for a given product in that venue.

  5. Sean Pecor says:

    Nothing wrong with piloting a higher price for a duration only long enough to determine it’s effect on sales. After all, they’re loosing money selling the product at it’s current price, so if sales stop absolutely then how exactly have they been harmed by the experiment? Sometimes people just think too much 🙂 The real risk is doing nothing.

    Sean

  6. In answer to being more efficient I believe in the repetition of making the same type of work one will realize a better more efficient way to make within that frame of mind that we won’t sacrifice the quality or the aesthetic of the final piece.

    Then there are things that are done that are so faint that a lot of people couldn’t put their finger on it as they look at your work but side by side they would see it or sense the difference and feel it is of lesser value.

  7. Marti says:

    David, I sent you a letter. I fear it landed in your spam bucket. Can you please pull me out? It’s greasy in here – LOL!

    David Says: You may have left a comment and failed to complete the anti-robot exercise properly. I have done that myself elsewhere and the comment is lost forever unless it can be reconstructed.

    There are no Marti messages in the typepad spambucket. Your last comment was made on the 17th and it appears in the usual place.

  8. Jim says:

    The dilemma is the artisan’s lack of information on demand for their product(s). Given the following:
    Expense = Cost x Quantity
    Revenue = Price x Quantity
    Profit = Revenue – Expense
    You know your costs and you know your current price, but you don’t know your quantity demanded. Therefore, the aritsan should attempt to estimate demand for similar products in that market BEFORE THEY PRODUCE IT by asking merchants and other artisans what their sales are for this type of product. Otherwise, the artisan is left to determine demand on his own at his expense and risk.

    Failing to know your market is probably one of the most widespread reasons for new business failures.

  9. I think Jim and David think similar that an artist looks at a market and determines that they will make a product or work of art for that market and move into buisness. I’ve believe most artist make what they inspired to make through their inspriation and ability and then find their market. What if their is no real bench mark product to go by? How does each artist determine what they are worth an hour? How many hours of web searching and gallery hopping will it take to come to a decision on pricing?
    In the capitolistic world that we are born into we have to determine how much money we earn from our art to determine how successful we are. Since we have basic needs to fulfill, can we meet those needs and stay a float? Artists have always sought out the cheapest land and life styles so they can produce at the lowest cost of living. I’m thinking that if you approach from the market side you’re a marketeer and not an artist.

  10. Carter has evidently not read my post because the post is based on the situation where an artist has created a product without any marketing and it begins selling.

    That’s why there is a dilemma…

    Please read part 2 of this series before leaving more comments.
    http://www.making-ripples.com/2006/08/the_artisans_di_1.html
    —–
    PING:
    TITLE: The Artisans Dilemma
    URL: http://blog.artbycas.com/2006/08/29/the-artisans-dilemma/
    IP: 216.120.231.250
    BLOG NAME: An Artistic Journey towards Enlightenment
    DATE: 08/29/2006 08:52:22 PM
    Mere sent me these links –
    The Artisans Dilemma
    The Artisans Dilemma – part 2
    Very thought provoking – and he put into eloquent words stuff Ive been bantering about my head for quite awhile.
    Especially efficiency – How to improve …

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