One of the decisions you will have to make in your art business is where and possibly who will sell your art to your customer. You may sell your art directly to the consumer or to some middleman such as an agent, gallery or other retailer or even a wholesale distributor. In marketing these various choices are referred to as your distribution channels and distribution chain.
The choices you make about your distribution channel will have an effect on:
- Your market reach or number of customers you can potentially touch. With a retail location your market may be limited to your local area. With gallery representation you expand your geographic coverage and with multiple galleries gain even more coverage.
- How much you can charge for your art. The more people there are between you and the final customer the less you will receive than if you went directly to the customer. This results in lower margins (profit per item) but may result in greater total profits because you will hopefully sell more.
- How much production or number of pieces you will have to produce to support the channel. If you only plan on making a limited number of pieces of art then it may be difficult to get representation by a gallery, agent or wholesaler. A gallery will probably require a body of work and a wholesaler will probably require a large amount of pieces such as prints.
- The level of support or customer service you will need to provide. If you sell directly to the end user (consumer/collector) then you will most likely be responsible for all activities relating to support or customer service. These activities could be installation, returns or collecting your money. If you have others in your distribution chain then it is possible that they may take care of these activities for you – at a price!
Types of Distribution Channels
When you sell your art directly to the consumer or collector you are involved in retail distribution. You may sell directly out of your studio or have a retail location or outlet. Other forms or retail distribution could also be selling your art at a fair, festival, show or other similar venue (it could even be out of your vehicle or car!).
The important distinction between retail and other forms of distribution is that you have physical contact (usually) with your customer. You are responsible for selling your products, developing and maintaining your brand, collecting the money and delivering the product. When you are the retailer you have no middlemen to share your profit and your market reach may be limited geographically.
An artist may use other retailers such as galleries, gift shops, or other retail establishments to distribute their art to the consumer. Depending on the type of art produced (original versus copies) the quantities may be small or large. With this type of channel, the arrangement is similar to that of selling to a wholesaler where the unit price received is less than that of going direct to the consumer. Other retailers such as galleries will also represent other artists so it is imperative that the artist keep good relationships with its retailers.
Much has been written on how to deal with galleries. I maintain that they are really not that different from any other retailer. They have a business to run and they have customers to please. They will only stock the inventory (art) that moves and makes them money. If you respect them, value their time and provide them with items that fit their market they can be a valuable part of your distribution network.
Wholesale – Large Quantities
A wholesale distribution channel is where the manufacturer (artist) sells large quantities of goods to a middleman who in turn sells them to retailers who sell them to the consumer. A wholesale distribution model only works if the manufacturer has large quantities of goods to sell. For most artists this model of distribution is not appropriate. An example where it might be appropriate is where an artist has a line of mass produced goods such as jewelry or prints. The unit price of an item will be less using the wholesale channel than going direct to the consumer but the artist should expect to sell many more units. A good wholesale model will allow you to increase your market size and reach.
Agents / Sales Representatives
In this channel the artist uses an agent or sales representative to represent their products either to retailers, wholesalers or both. Typically an agent is not exclusive and will represent other artists as well. Agents don’t take delivery of your products they only arrange a sale and take a commission – they typically have little “skin in the game”.
Direct marketing can be thought of as a distribution channel as well as one of the marketing tools like advertising or public relations. In this case we will consider the distribution channel aspects. Direct marketing has traditionally involved direct mail, email, telemarketing, 800 numbers and infomercials – think of it as an extension of your studio or retail outlet.
One of the advantages of direct marketing is that it will allow you to reach customers who are geographically spread out and not easy to reach via your retail location. I can be a great way to expand your market presence and grow your business.
In direct marketing you sell directly to the consumer but in most instances the sale is fulfilled either by mail or some shipping service. Recently some businesses have put a twist on direct marketing where the consumer places an order with you and picks up their purchase at a third party – usually a retail part of your distribution channel.
Direct marketing involves some type of list of prospects which is usually bought from some list provider or database company. Lists are typically generated from subscribers to magazines, visitors to websites and owners of similar or complimentary products such as art buyers or new homeowners. Before you purchase a list make sure that you have a good idea of who your target market is. The quality of lists varies and it is wise to test your list before going all out and spending a lot of money.
You should also develop your own lists from people who visit your gallery, shows and those you meet in the normal course of running your business. Your own list can be a very valuable tool in direct marketing your art.
Direct marketing usually involves additional costs or expenses. These costs include order processing, shipping and billing. Be sure to include these costs when pricing your products for the direct marketing channel.
Internet marketing can be viewed as a distribution channel and/or a marketing tool much like direct marketing. Internet marketing can help you expand your distribution reach on a global scale. The important point about internet marketing is that it showcases your products and directs people to your gallery/retail location or allows them to purchase your products online, by mail or phone. You can use internet marketing to distribute your art to the consumer, other retailers, wholesalers or agents.
There is a lot of competition in the internet distribution space – anyone with art and a website is your competition. Some of the things you need to consider when distributing your art through the internet are:
- Have a website that is inviting and easy to navigate.
- Make it easy and convenient for your customers to purchase your art
- Provide excellent service and return policies/guarantees
- Add content regularly as this is probably the most important thing you can do to increase your search visibility
- Optimize your website for search engines such as Google
- Consider advertising on Google and other websites but take it slow to start
- Add a social media component such as Facebook, Twitter, and LinkedIn to your website and use these social media channels to promote your website
- Take a look at other online retailers, virtual galleries and sites such as Etsy to distribute your art
A Final Word on Pricing and Distribution
If you have more than one distribution channel you should be careful about how you price your art to the different channels. As you add more layers in your distribution channel between you and the end user you will receive less money for your work. This is not a bad thing because you will hopefully be increasing your market reach and total sales.
You need to maintain some kind of order in your distribution pricing channel. If you sell to a gallery and they find out you sold the same (or similar) item for less to other art collectors they may not be happy and will not represent you anymore.
In future articles we will take a more in depth look at some of the major options open to you – try to think outside the box (studio or gallery) when it comes to distributing your art!