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The Business of Art

Merchandising

How will you turn your designs into actual things?? Things like (bust most definitely not limited to): 

  • Vinyl decals
  • Stickers
  • Poster prints
  • Postcards
  • Garments
  • Mugs
  • Water bottles
  • Garden gnomes
  • Keychains
  • Boardgames
  • Dice
  • Tarot cards...​

When Do You Make it Yourself?

When Do You Hand it Off?

If you are here, then you have figured out the "what" of what you're making, but now you need to figure out the how, for which the following questions apply.

  • What will it cost to make it yourself vs going to a production company?
  • Is your audience one that will pay the upcharge of doing it yourself?
  • What production companies are available?

Breaking Even

This is a very simple process for figuring out how to break even and make a profit with your artwork. As your business grows, you will be adding to this process, and yes, there will be math involved. We do recommend eventually getting a business manager or accountant that can help. 

Breaking Even

The most basic questions to ask yourself to break even are the following:

  • How many things are you going to make?​
  • How much did using/buying machines or services to make the things cost?​
  • How much did the raw materials cost?​
  • How many hours of work did you personally have to put into this?​
  • How much do you want to get paid per hour for your work?

Example:
100 Acrylic Keychains​

  • 1 hour of rented time on a laser cutter: $25​
  • 2 sheets of neon acrylic, plus metal keychains, $40​
  • Design time, cutting time, cleaning, attachment of rings: 10 hours​
  • My per hour rate: $20​
  • Total cost of production (25 + 40 + [10x20]) = $265​
  • Price per item, assuming all sold, to BREAK EVEN: $2.65

More things to consider, this is where it starts getting a little more complicated:

  • Will all 100 sell? (it's good to assume you'll sell half of what you make)
    • Why would you make more than what you think you'll sell? Cost - when making items, you have to balance the cost of making them vs the cost of selling them, the more you make, the less you'll pay for their creation on a per-item basis which means you'll be more competitive on your pricing. 
  • Shipping?
  • Deadline?? (are you counting on the money for something?)
  • If you own the machines, what's the upkeep?
  • Do you have to pay for software licenses?
  • What are the costs of selling online? (Commission and or fees for the service you are using)

Example (continued from above):

  • 1 keychain at $2.65, plus $7 shipping = $9.65, pretty good pricing
  • But if you assume you'll only sell 50 then each will be $5.30, plus $7 shipping = $12.30, is your competition selling for less?
  • Will you split the difference? Mark up and always be "on-sale"?

Cutting Your Costs So You Can Compete

  • Letting others produce for you - it can be much more cost-effective to have big companies do the production of your designs, they can do it in bulk for much cheaper (items like stickers, coasters, pins, note cards, etc.).
  • Short-term sales and deals on materials and services - bulk orders, end-of-year sales, coupons, etc.
  • Local suppliers and manufacturers - picking items up yourself will mean no shipping cost for you, shipping costs can fluctuate with supply chain changes and demand very quickly.
  • Other things to consider: 

    • If you can learn to do resin molds: DO IT. Replication of jewelry designs, dice, and figurines is a big up-front cost but if you land a known-sellable project you can easily pump out a bundle.​

    • If a laser cutter is free to you to operate, it's burning money to not be operating it at all possible times.​

    • CO-OP material purchasing: get more materials that have more use options (rolls of paper, acrylic/wood sheet, resin) by working with other artists in a group/studio setting.

Short Term Bumpers

Fan Conventions, Event Tables, Craft Fairs

  • Bump! - you can bump your prices for special events where tourists are more likely to spend money.
  • Or if you need to get rid of some inventory, you can have a sale at these events that will inspire people to buy more items (people like souvenirs they can bring home as gifts)

Contract Requests and Wholesale

  • If a group likes what you do, and you can get them to commit to a batch delivery so they can sell it, it saves you time and keeps your revenue stream solid for a known portion of time.