Expert: Shasta McLaughlin - 4/6/2010

Question
I’m writing in hopes of gaining a little insight on the dynamics of selling on the internet.

Specifically, I'm looking for any feedback/details about online galleries, personal artists homepages, and websites such as Etsy.  

I’d also be interested in getting your opinion on what additional services/other options for online sales would be attractive to you if you were selling art on the internet.   

Formerly in corporate sales & marketing, I’ve begun work on a proposal to represent a small collection of artists, both on the internet and through selected art shows.  I’ve done many hours of research to find artists which I feel would be a potential fit with my vision for the project.   Specifically, I hope to gather a collection of works that focuses on a certain niche (such as 'folk art from the northeast' or 'modern at from the Midwest').  First, I want to see what’s currently available to artists, so that I have an opportunity to improve upon what already exists.

If you have a moment to let me know which online options you would consider using (or not using), which options work well and which need improvement, I would greatly appreciate it.  If there are any options you would like to see, or like to see improved upon, I’m all ears!  Also if you’d be willing to share what percent commission you think would be equitable, that would be very beneficial.


Thanks in advance for any information you’re willing to share. Any questions worth mentioning would definitely prove very helpful as well.  I’ve included a short synopsis of our intended concept and strategy below. Once again, thank you for you time,

Kathy Middleton


The approaches that I envision will set this endeavor apart are:

I. Provide the artistic community with multiple option of doing business:
1). Order generation only (customer comes to our site, places order, artist fulfils/ships item).
2). Turn-key sales and distribution (Our company will store inventory selected by the artist, sell, ship and provide follow-through customer care,
3). Additional exposure (and a physical, personal  presence) within art shows and festivals.

II. Provide a shopping experience for the customer that is:
    
1).  Small enough in choice that they are not overwhelmed, > AND enough so that the artists’ offerings are not buried within hundreds of similar or competing works
2).  Large and interactive enough as to provide a robust set of offerings that we believe will ultimately create returning customers and continued website traffic


Pricing Structure:

There is an online sculpture gallery that I believe  has a similar pricing structure, except they charge a one-time membership fee of around $200.  We will not ask for any membership fees from artists.

For any of an artist’s sales we handle solely and completely through our website, we will retain a 35% commission.     For ‘Order generation only’ sales, we retain 30%  
    !***I have not set the exact % but this is “within the neighborhood”

If the artwork is sold through our physical gallery (at art shows), we ask a 45% commission.  This offsets the transportation and show fee costs.

I’m still undecided as to whether we should/will offer the following option:
We can  provide an optional link to your personal site, and the first year of that feature is free, with an annual fee thereafter of around $100. The commission for sales that go though your personal website that came through the link from our site is 10%.

Answer
Dear Kathy,

Sorry it took me so long to respond. Your question prompted me to create a page on my website that has a list of places for artists to sell online.  You can view the Sell Crafts Online page at:  http://www.extravaganzacrafts.net/sell%20crafts%20online.

I have not sold my crafts online yet and haven't had time to compare costs or features of these sites.  The one site that I have used a little bit is etsy and I hear from many people that they find much success there.  They send out a daily newsletter featuring different artists based on a theme.  That draws me to look at the site almost everyday.

As far as price-it depends on what artists are really willing to pay, what quality of work is being presented, and what your goals are as a business.  Price should also be determined by the competition that your business is facing.

When I say price should depend on the quality of work being presented I'm talking about the price point of items being sold.  For instance if you were selling works that started at about $5 and max out at $500 the price would be lower than if you were selling items that started at $500 and max out at $10,000 or more.  The design of your site would also need to change for that difference in price points.

Price would then be determined by the price that artists selling items in the price range you choose are willing to pay.  You can't charge some $200 if they are only willing to pay $100 for similar services.  

The next factor is the goals of your business do you want to be the loss leader, have the median price where you balance sales with profits, or do you want to have the highest price people are willing to pay (with maximum profits) but lower sales.

Finding the correct price requires testing.  By trying one price with a small group of artists and another with a small group you can test which one is most effective.  You should devise a way to track and test every thing in your business and test everything!

I do like your idea of providing a link to their personal site for a slight fee.  This gives them the opportunity and flexibility of their own site.  It also gives them the "publicity, marketing, advertising" that your site offers while it gives you another way to make an income.  This also offers artists who aren't website savvy the opportunity of using your secure online store while keeping their website to more basic information so they don't have to be technically savvy or pay for a shopping cart feature or an SSL certificate.

I also like your idea of offering two options to artists that they can fulfill orders themselves or that your company could act as order fulfillment. One thing I would be very careful to address when acting as an order fulfillment center is to address each artists branding needs and packaging (specifically packing for safety).  This option requires drafting a policy and system addressing what a customer should do if they receive an item that is damaged.

I hope that this helps.


Shasta McLaughlin
http://www.extravaganzacrafts.com