Helping Artisans Reach Global Markets Finding Your Scale Module

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1 Helping Artisans Reach Global Markets Finding Your Scale Module By Sarah Frank Bowker, Program Coordinator, CEDIK University of Kentucky

2 Topics to Explore Ecommerce goals what are yours? How much time and other resources can you devote to ecommerce, and to making your product? Activity: determining production costs Developing a retail price for your artwork/craft

3 Ecommerce Goals: What are yours? What is your motivation for marketing and selling your artwork/craft online? This is a picture of one of the blown glass works by artist Dale Chihuly. Clearly, there is going to be a very specific market niche for this kind of art product, and the artist needs to have a marketing plan tailored to his needs.

4 Ecommerce Goals, continued Is this venture going to be your primary source of income? Is it more important to you to create art, or create a product that will sell? If you intend to make a living off the income you generate from selling your artwork, there may be some tradeoffs between what you are creating for market, and what the trends/niches your product fills and sells. You will need to figure out what you can live with. Do you feel comfortable putting together a marketing plan for your artwork/craft?* *Another module in this series titled, How to Market provides tips on how to position your product and how to receive helpful feedback when designing a marketing plan.

5 Activity: Finding the time How much time do you have to devote to creating AND marketing your product, in a typical week? Write your estimate down. Next, flip open your date planner (if you use one) or take a look at a calendar if it will help you recall your immediate week prior. Review the past week s schedule, and write down the amount of time you actually worked on marketing or your artwork/craft, or the amount of time you realistically would have had to work on marketing or on your artwork/craft. How do these two compare, you typical week amount of time, and the actual amount of time?

6 Finding the time, continued You will need time for marketing AND time for creating. Building an online presence takes time, especially upfront; some options take less than others, but ALL need regular maintenance. Short on time to market? Not interested? Hire someone to do the marketing for you if feasible. Perhaps you can trade your artwork for their time. Allow friends/family members who are interested and invested lead your online marketing effort for you. Choose a very low maintenance option that you feel comfortable with. For example, blogging or social media may be better than a full website with shopping cart.

7 Other costs of producing your artwork/craft What if there are not enough hours in the day to produce your artwork/craft AND to market? Can you hire labor to create your product? Do you already have adequate space to produce and store your artwork/craft and the needed supplies? Will you need to rent space or renovate a space? Do you have adequate access to any special equipment or bulk supply ordering to produce your artwork/craft? (i.e. Kiln for firing pottery) Will you need to make any large purchases or equipment or bulk supply ordering? Is this a cost-effective option for you?

8 Developing a fair price for your artwork/craft Once all the costs to produce your artwork/craft are accounted for, now you can work to set a retail price. This work of determining production costs is very important for you if you plan to make a living off of selling your artwork/craft online. If you are not relying on the income generated from the sale of your artwork/craft to make ends meet, it is still useful to understand the full amount of resources that went into creating it. Knowing this will guide you in setting a retail price that will at least recover the cost to make the artwork/craft.

9 Activity: Production Costs Worksheet Pricing one item*: 1. Determine the cost of materials 2. Determine the number of hours spent making the item 3. Multiply hours by wage for labor cost 4. Determine overhead costs 5. Add materials & labor & overhead to get a WHOLESALE PRICE 6. Multiply by 2 to get a RETAIL PRICE *See Production Costs Worksheet for more detail on how to complete these steps.

10 Developing a fair price for your artwork/craft, continued Prices need to please both the buyer and the seller. Even if you have accurately figured the Wholesale Cost of your artwork/craft product, the price may not be appealing to you or it may appear to be too high to attract buyers. Some of the things you might consider: Do you want to work for minimum wage? If not, you can change your hourly wage. Even with minimum wage, has your price for one item priced you out of the market? Is it too expensive? Will people pay that price for the item? Can you change your materials or methods so that your cost is lower? Does changing your materials or methods lower the quality? People often will pay more for a handcrafted item of high quality than a manufactured item of mediocre quality. Have you gained a reputation for producing your craft? If so, you may be able to ask higher prices.

11 Contact Sarah Frank Bowker, M.A. Program Coordinator Community and Economic Development Initiative of Kentucky University of Kentucky CEDIK would like to thank the Southern Rural Development Center and the Mississippi Extension Center for Technology Outreach for the funding to support the development of this module.