Just to do something different, I took a pottery class last fall and got along well with the teacher (very cute : ) She knows that I work in residential construction, and asked me this question.
She was hired by a (wealthy) friend to make a large number of handmade tiles for a very ornate kitchen backsplash. I’d say it looks very Moorish in appearance (complicated geometric patterns). She ultimately “painted” the designs using both silkscreening and blocking. It looks great.
Being a potter in a college town (with probably a hundred other art dept grads) is tough and she is always looking for new product ideas. She is thinking about approaching all of the local tile, kitchen & bath, home improvement and “artsy” stores in town about the possibility of selling her tiles. The problem is determining how much to charge to be somewhat competitive with the nice (but not custom or handpainted) tiles sold at the local HD and Lowes.
More precisely, if HD and Lowes are selling nice Portuguese tiles at, for example, $3.00 each, and she decides that hers should sell at $4.00, how much should she wholesale them to the local retailers? What is a reasonable retail mark-up at places like HD, Lowes, or the local tile store, or local kitchen & bath place? I have no idea what to tell her.
Replies
Most retailers double the price the manufacturer gives them. So, if they are selling a tile for $4, they bought it from you for $2.
I have a friend in texas who makes adirondack chairs and other benches etc. high qaulity, sells then at local stores for more then what the chains do and does pretty well, not quite tiles but
The stores mark it up about 50 percent like Frankie said. He also has the salesman tell the people if they like what they see but want something a little different custom orders are possible and they command a premium price. Some people are willing to pay to be unique, the word custom can work to her advantage
If she can get her foot in the door maybe have the tile stores do the same, say if you dont quite see what you want we can have it made. Emphasize its made locally, at least where I live (Lawrence KS) a lot of people will pay a premium for things made locally.
Maybe even talk to the higher end tile shops and installers in the area see if they have a demand for hand painted decrotive tile.
I thought I saw a Jayhawk in a previous post, so you're really from Lawrence, KS. 30 years ago I visited a good friend of mine who went to KU. Time flies. Nice area.
Tom
Tom,
Yep, great little town, not sure I could live here my entire life its a bit small for me but nice none the less.
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Chris,
Since she has no production capabilty, or economy of scale, and therefore is incapable of supplying the box stores, I suggest that she address the ultra high end, one-of-a-kind market, assuming one exists in your area.
Sample to very high end designers, treat it as a work of art. and get an hourly fee that makes sense for you. The designer will mark it up, believe me.
Never do work on approval or allow a designer to hose you. If they want 5 hours, get it in advance. Never deliver work without full payment. Never work for a designer who want's a deal this time, but will make it up to you in the future. Get the check; cash the check; do the work. That is the sequence of success.
If you find that you have been lax on these and are presenting painstakingly completed, art quality tiles that you have perhaps 100 hours of work into, and they aint handing you a check? Break your work on the floor while they watch. Let them explain to the client. Of course, if the client calls you, tell the truth.
skipj
And that's the shocking truth of it all. . . .
Also tell your friend -
Go for the high end. Value your time fairly and price accordingly. No-one else has exactly what you have to offer. Don't concern your self too much with what the designer or store will be re-selling your product for. Figure that it will be at least double and let them worry about it. This is not your new, main source of income, so don't be dissappointed if it doesn't go like crazy. You probably love the "work", don't let it become a chore.
However, to start the business, (not counting the batch you are going to make for free as your demos*) I'd go with a structured payment schedule with progress payments: 25% at the design review when they approve your sketches; 50% before the go in the kiln (?); 25% before they leave your hands.
I like the idea of breaking them in front of a difficult customer; in fact, I'd make an extra one or two if my gut told me I was working with a designer that might hose me.
*Demos: make a set that can be carried and shown-off and make a few to give away. However, don't bring the give-aways on your first visit to a designer.
Good Luck, maybe we'll see your friend on "Modern Masters" ;-)Steelkilt Lives!
It depends on the industry....they're called 'keystones'.....one keystone means a product that you sell at wholesale for $100 will sell for $200 at retail. One keystone is typical in anything I've been involved in, but some industries support several keystones....marking up to 300% or 400% from the wholesale. Depends on the industry.
In galleries or one-of-a kind type places, a 60/40 or 66/33 split is commmon (the low number going to the artisan, the larger share goingto the gallery or design showroom). 50/50 is a good deal, but I've only ever seen that myself in co-op galleries.cabinetmaker/college instructor. Cape Breton, N.SWAY too conservative to be merely right wing
Thanks everyone. I had heard that a typical retail markup was 100%, but was not sure if that applied to supplies used in residential construction. (Keystone: I'll remember that.)
Skipj, it sounds like you've had a few bad experiences with decorators. I've heard other trades people talk about how difficult decorators/designers can be. I'll pass on your words of caution.
ChrisA
Hi Chris,
What I know about the tile business is that the shi shi upscale products are normally purchased from overseas for pennies on the dollar. The major cost is shipping and tying up of the money during shipping.
The others are right about targeting the high end.
My suggestion is to build a portfolio of designs and create slick brochures. Capitalizing on your ability to product one of a kind designs and your design services may be another angle. You can charge what you like.... Just make sure you have a solid profit margin...profit is not unethical, it is necessary for your survival.
good luck L
for her to be effective in business she needs to figure out what each tile costs for her to produce. (including all aspects like kiln costs, clay costs glazing costs, accountant cost, wheels costs etc etc) once she gets that prices established then she needs to figure out if she wants to earn a profit or do pro bono work.
The experts say 46%+ is the minimum you can do in order to stay in business at the retail level. so if your retail business bought a tile for a dollar the minimum you could sell it and still stay in business in the end would be $1.92 to be fair and easy just say 50% like the others suggests.
There wont be much money in low to mid end tiles. Her best recourse is to befriend designers and the high end tile stores and market her tiles as custom high end. Designers will probably charge her a fee so that should be included into costs.
If she is an instuctor at a college? That college might offer some small business seminars or classes hosted or sponsored by the business school as a service to teh community. She should take a few of those.
She is wanting to do a business, and in order to make money she should be well informed.
While all this might seem complicated there is no reason to work for free when its all said and done. many Contractors and subs and self employed realize the cons when tis tax time.
I can't speak for pottery but when I was casting Bronze for a living the foundry more or less set the price of the finished piece. The artist, foundry and gallery usually ended up with a three way split. Basically, the foundry established the price to produce it, the artist multiplied that number by 3 and split the remaining 2/3 with the gallery. Of course, it wasn't an exact formula. Some of the well known sculptors were able to command a little more for their work. Since it's an art formula, not a hardware formula, maybe it would work for someone doing art tiles. Accurately calculate production cost and triple it. If she does her own production she keeps 2/3 instead of just 1/3. In that vein, Art galleries might be a better place to market her work at a premium.
One of the great things about being an artist is that you are the one with the gift. People often pay for the artist as much or more than the art. Once she is established and becomes known for her style, especially if she has a unique style, the copycats will never be able to compete for her business. I wish her the best.
Kevin Halliburton
"Personality is to a man what perfume is to a flower" -Charles Schwab-
Tell your friend to be careful what she asks for. My wife is a hand weaver - we have two floor looms in our living room. She makes a lot of rag rugs, colorful strips of old sheets and similar fabric woven into durable rugs. She does pretty well at craft fairs and such.
She decided she had a marketable product, so she called on a decorator in Atlanta one time. The lady looked at her wares and told her she'd take 12 . . . . . dozen ! These were hand made, probably took her an hour and a half each, all right in our living room. After the first dozen, it wouldn't be fun any more. We passed on that deal.
Seriously, if she handles it right, it might be a great new career.
Greg.
Your post reminded me of something my grandfather used to tell me.
Don't let your hobby become your career, or you will go nuts.View Image
Greg, That is an interesting story. We are in Athens, and she has thought of selling into the Atlanta market. Its a tough choice between "production work" and being an artist. She will have to decide where that point is for herself.
Thanks.
ChrisA
If I were the tile-maker, I would really work towards advertising directly to the homeowners....you need to find customers that WANT what you have....the more they want it, the more reckless people will be price-wise....
How many of you have had to install or custom work-in some architectural relic, that some homeowner found, paid a riduculous price for, and paid heaps to have worked into a project, just because they LIKED it.
FWIW
ProBozo,
Your post reminds me of one of my favorite remodel stories.
Client calls me all excited because he and the wife found a solid stone sink, granite or slate or diamond, I can't recall. " Can I come see what we need to do so they can start using this great sink?". " Sure.".
Well, the sink was an antique, i.e. non-standard. "Should we alter the cabinets? How much? REALLY!". Think about it time.
Next call: "We kinda want new cabinets anyway, how much? REALLY! Can we use the same countertops (Tile)", "Nope.".
Calls, more calls, final call: "OK, let's do it.". " What?". " The new kitchen we've been talking about!".
$45,000 passes by and the client has a great new kitchen, with cabs, appliances, upgraded electrical, etc., etc., AND, (the older guys already know this), the sink is still in my warehouse.
skipj
Question for Discussion: Is it possible that the new kitchen was the wife's intention all along ? That the stone sink was simply baiting the hook for her hubby ? I keep asking my wife, but she just smiles.
Well, go to go finish tiling our master bathroom. Wasn't planning on doing it, but found these really cool antique deco tiles, not sure where I'm gonna work them in... the wife says we'll use them eventually, maybe in the kitchen. I can't believe how that other hubby was suckered.
good story , skip.... stained glass windows are my sinkMike Smith Rhode Island : Design / Build / Repair / Restore
" etc., etc., AND, (the older guys already know this), the sink is still in my warehouse."
LMAO
I guess that I'm an older guy!.
Excellence is its own reward!
Lot of good advice so far.
Let me add my 2¢
She cannot compete with big box stores so she shouldn't try. There are more satisfying ways to lose everything.
She should market as custom and make tiles on order with advance payment of deposit.
She should know her costs to establish her price instead of letting the stores or anyone else determine what she will get paid.
Suppose she is losing .05¢ on each tile. That doesn't sound like much until she gets an order for ten or twenty thousand tiles.
There has been some confusion about markup here. If I sell an item for 100 and it costs me 60, the markup is not 40. It is 40/60 or 67%
If I buy for 100 and want to mark it up fifty percent, the price will be 150
If I buy at 50 and sell for 100, the markup is 100%
the markup is calculated on the cost, not the selling price.
Excellence is its own reward!
piffin, I sensed the mix-up in percentages. I assume that what everyone is saying, and I expected this, is that the retail mark-up is usually 100%. If she sells the tiles wholesale at $2.00, the retailer is going to sell it at $4.00. To work backwards, and I think she needs to be somewhat sensitive about the retail price, if she wants the tiles to retail for $3.00, she must wholesale them at $1.50.
At $1.50 per tile, she would need to decide if its really worth doing. The materials are cheap, but even with silkscreening and block printing, they are still labor intensive.
Thanks.
ChrisA
Keep in mind not everything is marked up a set percentage. There may be some things that are marked up 100%. But some are only marked up 10% or so. Anything inbetween is also possible.Winning isn't everything. Winning and gloating and rubbing their noses in it ... that's everything!
I agree with aimless shoot higher, 2 dollars a tile cheap for hand made tile. I think she should shoot for the high end. I've seen tiles going for 6 and 7 each at tile shops and they weren't anything speacial or hand painted. Hand Painted custom tile could demand a big premium if you get in with the right people.
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Edited 2/12/2003 1:44:26 PM ET by CAG
On my last trip to the tile store I saw one that retailed for $370/sq ft., and this was a production tile, not a handpainted work of art. There is definitely a market for high-end, hand made tiles; I just saw a show on HGTV a couple of weeks ago (called Designer's Challenge) where they used hand-made tiles as a backdrop for a fountain. Just a guess, but I think she charged a lot more than $4.00 a tile! As has been said before, your friend should charge based on what it costs to produce the tiles combined with what she wants to make.
Tell your friend to aim high, not low. There is most definitely a high-end market in GA, and if she's good enough then her tiles will be in demand across the miles. I'd say she will have better luck going to designers than going to a retailer - the people who are willing to pay the extra money are going to use professionals to coordinate the design.
I'm pretty tight with money. But, we bought 4 decorator tiles for about $10 ea. for our bathroom. Not custom, just a nice pattern we found in a carpet store, special order.
Wife was right, I practice saying that to promote domestic tranquility, they really hightlight the room. They're the focal point everyone notices.
Of course, she barely stopped me from putting them on upside down. The thinset hadn't set, so I reversed them, with her there watching, still can't understand why she thought they had a right side up, but she's happy.
Maybe she should try to create a market for good accents at $10+/tile. If it looks good, and she's easy to find, she'll get referals. Maybe she'll hit it big and get a customer that wants a large bath w/ tile everywhere, all custom.
I calculated once that some of my furniture is marked up by about 160%. Put it this way. I wanted $5,800 for a particular piece, and the gallery was asking $15,000. Do the maths for yourselves, ha, ha.
As far as I know, and I could be wrong, it's not unusual for retail outlets to mark up furniture by something like 300% How else can they afford to offer the customer the generous 50% off discount at 'Sale' time, and yet still make a profit?
Try the sum, retail store cost = $100 + 300%= $400= charge to customer -- 50%. What do you get? The same as me? $200? If they knock off 75% from their normal selling price of $400-- plus tax, they're selling it at cost-- but then they'll normally try to stiff you for delivery at ~$100-- fair enough really, a $2 can of anti-stain spray for a 2 minute scoosh, at about $80, and lifetime insurance-- which is never used anyway, at a cost of maybe $60, ha, ha. (Tongue deeply buried cheek here.)
I haven't insured a computer, stereo, piece of furniture, television, etc., in more than fifteen years. I used to be really stupid, but now I'm just dumb. Total waste of money. Slainte.
(Edit) Changed a there for a their.
Website The poster formerly known as Sgian Dubh
Edited 2/13/2003 1:01:36 AM ET by RichardJ