# Fair Commissions



## JoeyG (Mar 19, 2011)

I have a question that some of you maybe able to help me out with. I have several stores or shop close to home that would like me to put my boxes in for sale on commission. I live in a small area and all the shop owners know each other. They have set a price at 33% on top of my price. I think them making something is fair. It is their business establishment and all of that. 33% just seems high just to put something on a shelf. They don't even have to try and sell it, just take the money if someone wants to buy it.

What is a fair commission? Anyone with experience in this that can share their thoughts?

As always, I am most grateful to anyone who has anything to help in my consideration of letting these folks make so much money off of me.

Thanks.
Joey


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## mojapitt (Dec 31, 2011)

That's a standard here as well. I think it is excessive also. But they don't negotiate.


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## KoryK (Jan 14, 2011)

I'm just starting down this road and negotiated a deal with a shop owner out of Tennessee. We agreed I set my own pricing and we do a 70/30 split (started with a 60/40). The big difference is she pays for all advertising and promotions. She has already scheduled an interview with two of the local papers to highlight my work and in turn her shop. She is also trying to get my work in other shops at a wholesale price, but we are still talking about that. Like I said, this is my first attempt so I don't know if its a good deal or not. We will see, but it seemed fair and I don't know if any other shops would be willing to do it. Don't hurt to ask?


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## jaykaypur (Oct 22, 2011)

I have 2 places that want me to bring them some stuff. We have not discussed any monies/percentages but I am just honored that they asked me…...........J


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## Radish (Apr 11, 2007)

My only attempt at local giftshop placement was a 60/40 split. 40% for me. Couldn't do that.


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## kepy (Mar 5, 2012)

I have never paid more than 25%. Also, be careful of the shop. One I was in disappeared along with my pieces.


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## ssnvet (Jan 10, 2012)

Just surfed your projects again Joey…. you're really cranking out the boxes and they look terrific.

I can't comment on what's a "fair" commision, as my wife's uncle "taught" me long ago that "fair" is where you take your little pet pig to get a blue ribbon :^) (little dysfunctional family humor there)...

I will suggest that the shops have fixed overhead costs and typically no other way to cover them. And they are actually bringing something very valuable to the party…. a paying customer!

Where I work now, we have several brokers selling products that we manufacture and often they make more on them than we do…. and we have all the material cost, labor and more importantly THE RISK associated with employing people in a factory envirionment. None the less…. they are making the sales.

I think what's more important, is the question…"are you making what you think you need/want to make?"

If the answers is yes…. I'd suggest you not worry about what they're making.


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## alba (Jul 31, 2010)

That is fair

I pay 35%

But make sure you get prominent display as

shipowners will sell the goods first that they

have laid out there cash for

No good your money sitting in the back on a bottom shelf.

Jamie


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## longgone (May 5, 2009)

33% seems fair and reasonable. Some wholesalers will want to purchase work at a 50% discount and some galleries want 40% consignment commission. Choose the galleries carefully and get a written contract of their policies. If your state has a local crafts guild and a retail store it can be another option.
there are some co-op galleries also that sell artists work for around 25% commission and you have to volunteer to work in the gallery a few days each month. You have to find the best option for your needs.


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## NateMeadows (May 11, 2012)

Joey,

Remember that they have to pay rent, utilities and their employees. That money helps them. Sure they are not actively selling your product but it is taking up space so you are renting space and when the clerk rings it up, you are paying the clerk. You are also paying the employee to keep it clean and presentable. Your paying to keep the store nice and comfortable, the lights on, etc. It seems high but anything around 35% is fair, in my modest and humble opinion. Now if they try and go above that, they are eating into your money!

Very Respectfully,

Nate


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## MyChipCarving (Nov 4, 2009)

I think Nate has hit it right on the mark. 33% is fair as it helps to put yourself in the store owners shoes.


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## crank49 (Apr 7, 2010)

As a retailer I've always expected key (100%) markups to be standard. 
That's the posted price, before discounts or sales.

Applied to the terminology being used here that would be a 50/50 split.
I have always, on any product I made for someone else to sell, expected I have to be able to make it and sell it for 1/2 of what it will be retailed for.

As far as 35% being excessive, I don't think so.
In my retail store, If I can't make a 27% margin I don't even break even. 
The cost of doing business has increased over 12% in the last 3 years due to paperwork and regulations.
Just had gubmint snoops in the store twice in the last month.
Got cited for not having a "No Smoking" sign on the back door.
My back door is only an exit. Can't be entered from outside.


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## Puzzleman (May 4, 2010)

I second crank49. I sell to over 500 retail stores, website and catalogs and they all at least double the price that I sell to them at. As long as they can sell it at that price, i don't care as I make the price that I need.

Another way to look at is that if you didn't have your product in their store, how much time and expense would it take for you to sell that same item? Does it take time away from the shop? Would you rather be making product or selling it?

They will reach people that you don't know about as they have a clientele that will buy from them. I would also continue your direct selling to customers as well. This way you can make full price from your customers and the extra sales from the stores will be extra money for you.


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## learnin2do (Aug 5, 2010)

If they can sell your items at a high enough price that your percentage is satisfactory, then all is okay!

I get 40/60. One store doesn't seem to be able to fetch enough to get us both what we need. The other is just too high end -i don't think people want to pay that much for my things. I enjoy seeing the check i get in the mail. I just need to figure out what sells there that i can make fast enough to actually fetch me a decent hourly for my work.


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## Earlextech (Jan 13, 2011)

It's really not your concern how much they make "off me". As long as they sell your wares and you are getting the money you need. But to that end I would hold them to a reasonable schedule. Maybe, after three months with nothing sold, the commission changes or you change items. You can't let them run your business any more than they should let you run theirs.
There is no fair.


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## JoeyG (Mar 19, 2011)

Thanks everyone. You guys have opened my eyes to look at it from a different point of view. I think I will give them the price I need and if it sells with their mark up that is great. If not then I will try something different. I have had a few pieces in a local shop with this set up and it worked fined for me, and they made theirs as well. Sometimes it just takes someone else saying what we already know. What does it matter what they make as long as I am able to make what I need to.


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## JoeyG (Mar 19, 2011)

I should have chosen my wording more carefully. Instead of saying fair, what I meant to say was reasonable.


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## mikema (Apr 27, 2011)

I think it seems reasonable, when you think about what a retailer has to pay to put that item on their shelf:

Pay for employees
Electricity
Advertising
Government fees
Building maintenance/rent
And yes, a little bit of profit

Plus if an item doesn't sell quickly, it is taking the shelf space away from another item that potentially could sell quickly.


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## Jim Jakosh (Nov 24, 2009)

It seems high to me, but if they put 33% on top of your price and you sell it, you don't lose- you get your price. If you are selling products at a price you think is fair for the item and they take 33% off that, I'd reconsider if I want to market them that way. I don't like to work for cheap if I can help it.
My 2 cents worth…...........Jim


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## waho6o9 (May 6, 2011)

33% is a gift, be grateful for it. They make a little, you make a little, and the customer gets a custom JoeyG product. That's harmony.

Unless of course you want to open your own store.

The Padauka dot box should sell quickly, it's beautiful.


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## canadianchips (Mar 12, 2010)

Know what YOUR costs are. 
YOU supplied the material.
Your overhead (electrical, shop supplies,etc)
It was YOUR tools that built the item.
It is your labor doing the work.
You likely delivered the product to their door.
If they are willing to buy your item and then mark it up, it doesn't matter how much they make.
BUT if they just want a commission…..33% is to much.


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## DanLyke (Feb 8, 2007)

Yep, I've always figured that every time a product changes hands on the way to the customer, the price doubles. Standard markups in small retail have to run in the 40-60% of the sale price if the store is going to stay in business. In this case you're carrying the risk of not selling and the cost of carrying the inventory, so you're getting an extra 17% of the final sale price.


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## degoose (Mar 20, 2009)

Are they adding the 35% to *YOUR retail*? Or are you* wholesaling* then adding the 35%?
Rule of thumb is… wholesale X 2 equals retail…
So to be fair… you sell at 200 retail… you wholesale at 100 and they re sell at retail of 200…so that is 100% mark up…
If as I read it… your are selling to them at full retail of 200 and then they are adding 35%.. that is 270…very good deal if they can sell at that price..
JMHO


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## Philzoel (Dec 26, 2011)

On consignment % is a negotiated. I have got 75/25 to 50/50%. 50% is standard for gift shop items. Set what you want and let them mark it up. That is there business.

The deal of 25/75 was very good I thought. I set the price at $80 and would get $60. But they marked it up so I would get $80 and charged $106. I did not think they would sell there at $106, so I reduced my take.

I made 15 or 20 end grain cutting boards. Put 7 on consignment in 2 places and sold 3 at xmass and none since. Made $120 or so. I am glad I do not need the money. I did it to see if they would sell. Gave the rest away as presents. They were very much appreciated. Most people won't spend $100 on a pretty board or box unless they are gifting it.


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## woodworker59 (May 16, 2012)

I just stopped at a local shop up here in Rhode Island not far from me in Conn. they wanted a 50/50 split which I didn't think was fair.. so 33% would have been pretty good sounding to me. 
I also had some stuff diisappear with the shop it was in.. only a couple pieces, but they were bigger than boxes and I figure I lost about 3 bills in the process. Can't find her anywhere.. Live and learn.. so be careful, get it in writing and keep an eye on the shop.. good luck..


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## wooded (Mar 6, 2012)

Although it is true that all they are doing is putting an item on the shelf for you which seems like very little, the fact is, we don't have that shelf ourselves. Therefore, we could rationalize that they are providing a service which is to provide the display. Pay em. I have been a painter for many years and 40% is the the norm in most galleries that I ever delt with. 90% of the paintings I sold were through stores and galleries. I think one of the big tricks here is to (Through experience) find the max you can sell your stuff for…..................;-J


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## stefang (Apr 9, 2009)

That sounds like a pretty good deal to me. They need about 30% just to cover their overhead costs. In fact I think it is exceptionally good.


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