Dear Design Doctor
I have been selling my ceramics for 4 years since my graduation. Recently a restaurant contacted me to place an order of 500 small bowls. Obviously this is a very large order for somebody who’s used to making bowls in batches of 40!
I was thinking of looking into outsourcing and getting somebody else to make the pieces but I think it is very important for me and my brand to make the pieces myself.
Would you also be able to give any advice on pricing for a trade order like this? Do I charge them the wholesale price or retail price with a discount?
Patricia van den Akker, Director of The Design Trust, answered this question as The Design Doctor in Crafts Magazine May/June 2014 (page 24) where it was titled ‘Playing the numbers game’:
‘Congratulations, that sounds like a great creative and financial opportunity!
But … only if it is in alignment with your vision of what business and life you want to create.
Four years in business is often a pivotal point:
You have been going long enough to know if being a self-employed maker is for you (many have given up by now), but you also want to start seeing some (financial) results!
Time to look at your financial future:
- How much money do you want to earn in 2 years’ time?
- How much turnover do you need to cover your salary and business costs?
- And how many pieces do you need to sell that year, and at what price to achieve that turnover?
This is the moment to look at what YOU want to be known for and what kind of business YOU want to create:
- Do you want to make a small collection of one-off, high-end ceramics?
- Make small batches of mostly functional, ceramic items, doing it all by yourself?
- Or do you want to start looking at outsourcing some of your tasks, and maybe even licensing some of your designs?
These are fundamental questions, not just financially but also creatively and managerial.
How much marketing or project management you want to take on?
Many designer makers have a habit to do all the work themselves. But don’t forget that many famous visual and applied artists have studios who create their pieces – without any integrity issues.
You are much more than just your technical ceramic skills!
Your role is as a creative, it’s the whole package you create: your design skills, the way you put a collection together, how you communicate with clients, …
Designing hotelware can be a very exciting creative and financial opportunity as you get often wonderful freedom to create the platform for creative chefs to enhance their food display. But if you would be getting regular and larger orders from restaurants like this, I anticipate that you would get bored, and you are probably relatively too expensive to do all that turning yourself.
Most importantly I expect you would get very stretched for time, and might even get a burnout.
Wouldn’t it be more creative and exciting to spend your time on doing creative work and promoting yourself?
Maybe this is the perfect time to start dreaming a little bigger and grow your business with a work placement, Creative Apprenticeship or freelance helper.
What are the tasks that you like doing the most?
What are you really good at but don’t have time for?
Start making a list of all the tasks in your business, and what you can delegate to somebody else.
Now back to your pricing question.
As the restaurant will hopefully be ordering large quantities on a regular basis I suggest you offer them fairly close to the wholesale price. You will need to do a financial forecast and calculate how much it will cost you to produce say 50, 100, 250 and 500 items. Include the cost of labour and materials, but also your overheads.
Create one budget based on you working by yourself, and one if you would get assistance.
Calculate how long it would actually take you to deliver these large sized orders. That’s a good reality check to see if you want to take these kind of hotelware projects on.
Then identify what your trade prices would be. I suggest you have a stepped price level with a lower unit cost if they order larger quantities. Work out how many pieces you would need to sell at what price to achieve the salary and turnover you want in 2 years’ time.
Negotiate and don’t undersell yourself or your ceramics.
Ask for a large deposit upfront so that you minimise any cash flow issues and get their full commitment.
It’s no good having to worry about money, being very busy and stressed (will stop you being creative), but not making any money on it.
This is an exciting opportunity if you make it work for you – creatively and financially. Good luck!’
Did you find this blog post useful? Please share it with your contacts by tweeting or ‘liking’ it. Or if you learnt something in particular, or want to comment or give feedback, then please use the comments box below: