good elephant pottery

This is one of my favorite scenes at the Artscape Baltimore festival every year ... the Parade of Art Cars. Someday when my Subaru is a 20-year-old rustbucket, it's gonna get this treatment.

This is the third installment of my Hourly Earnings Project, and the first to analyze the retail side of my business. 

(To read the first two installments, click on the category The Hourly Earnings Project)

I've wondered for a long time whether wholesaling or retailing is more profitable for a pottery business. There are clear advantages and disadvantages to both. In the long run, I think it makes sense to do both. Hopefully by the end of this year, I will have figured out which is really better, and therefore I can make informed choices about how to spend my time and resources. 

Artscape Baltimore is my favorite art festival, narrowly edging out my second favorite. It is produced by the city of Baltimore, and it is a huge and multi-faceted spectacle of a weekend. I am always impressed by the scale of the event, the shear number of activities going on, and the size and diversity of the crowd. I've done it for eight years now, and even with the churning economy of the past few years, my sales there have grown every year. I typically come home with less than one box of pots, and a money apron bulging with cash and receipts. However, in the context of hourly earnings, this show has a big disadvantage: crazy long hours. That's 10 hours each on Friday and Saturday, and 8 more on Sunday. 28 hours total. But on a different measuring scale, my income from this weekend now equals a busy month of graphic design work. So regardless of how it ranks on the hourly earnings scale, this show is worth spending all those hours in the scorching city heat, and I will continue to apply for it. 

Now on to the calculation of hourly earnings. It was a little tricky determining how many hours it took to produce the pots I sold. I didn't produce them all in one continuous time block like a wholesale order. Some of the pots were made last year. Some were made as demos in my classes. Some were rescued from a consignment gallery and were years old. So bear with me while I explain how I figured it out.

I used the data I collected from the three wholesale orders that I previously wrote about. From the total number of hours spent, I subtracted the time spent on wholesale-specific tasks: bubble-wrapping, packing boxes for shipment, and accounting. From the total sales amount of these three orders, I subtracted the expenses for clay, but not for wholesale-specific expenses: shipping boxes and Buyers Market expenses. 

I divided the remaining sales amount by the remaining number of hours, and I call this number the dollars-per-hour just to produce pots and apply hang tags, without factoring the time and costs it takes to sell them. I multiplied this number by two, because my retail prices are double my wholesale prices. Then, I took the total sales amount from the show, and divided it by this number, and this gave me the number of hours it took to produce and tag the pots I sold. 

(sidebar: notice that I am only counting my earnings for the pots I sold, not all the pots I brought to the show. This is an important point about my whole project ... no matter how hard you work at making pots, or how talented you are, you are not entitled to earn income for it. You only make money when you complete the cycle of finding customers and selling your work. For the unsold pots that I brought home, the time I spent to make those still has a value of $0.)

There are lots of other hours required to do a festival, so I added the time spent on the following tasks:
• writing and sending a blast email (surprised to realize I spent 1.25 hours on this)
• packing my pots and my display into my car, and unpacking afterwards
• setting up my display, and taking it down
• those 28 hours of selling
• accounting (takes much longer for retail; for wholesale I only write one invoice, for retail I spent 1.5 hours adding up receipts, counting cash, and processing the credit cards)

From the total sales amount, I subtracted the following expenses:
• booth fee and application fee
• credit card merchant fees
• parking
• some artery-clogging, but irresistible, festival food

Finally, I divided the remaining dollar amount by the total number of hours involved, and I made $35.05 per hour.

So after analyzing one retail show, even despite its long hours, retail is kicking wholesale in the butt. Hmmm. Maybe it's not fair to make conclusions now, let's see how the other shows fare throughout the rest of the year.

My next installment will be written in early September, titled "Little Art Festival." It will analyze a small and locally-minded event, with short hours and a tiny booth fee. 

Just like the first installment of this research project, this second installment is about the wholesale side of my pottery business.  

(To read the first installment, scroll down to "Hourly Earnings, Part 1," which explains the whole backstory for this project, including motivations and methodology.)

I compared two different wholesale orders side-by-side. Their total sales amount were nearly the same. They were due on the same date, therefore they were going through my studio at the same time. But there was a significant difference between them. One of them consisted mostly of everyday functional items, bowls and mugs and such, whose retail prices range from $25 to $120. The other order consisted mostly of my "fancy" line of pottery, which are oversized serving pieces that are hand-carved with illustrations, whose retail prices range from $180 to $350. 

The everyday pieces are quick to produce ... I wouldn't offer them for wholesale unless I knew I had a good command of them (a lesson learned the hard way). The fancy pieces are strenuous and time-consuming, more prone to failure, and space hogs in the kiln. 

I followed the same parameters as before, in terms of the minutes I tracked and didn't track, and the expenses I tracked and didn't track. (again, scroll down to "Hourly Earnings, Part 1" for the complete methodology). And here are the results ... for the order of everyday items, I made $20.18 per hour. For the order of fancy items, I made $29.58 per hour.

I guess this is good news and bad news. On the positive side, these results verify the results of the first calculation (a much bigger order that combined low- and high-priced items, the result was $24.74 per hour). So now I feel confident that I am doing a consistent job of tracking my time. And I am really proud of my fancy line of work. It took me a lot of time and thought to develop these pieces, they are honest reflections of my aesthetic values, and I am happy to see that the effort is paying off.

But truthfully, I'm a little bummed. Because everyday functional items are my true love. My reason for being. I feel thoroughly requited when I look across a table full of identical pots. How many jobs can make you feel like that, after a long day of work? But I've had inklings for years that they weren't very profitable, which is why I started developing an upscale line. Here's the typical conversation that happens in my head when I sell an extra-large carved platter:
"How many mugs do I need to sell to equal that income?"
"That would be eight."
"But mugs are so much faster to make."
"What about those pulled handles?"
"Oh."
"And what about the energy it takes to make eight sales instead of one?" 
"Shut up."

And now my inklings are being confirmed. I wish the difference wasn't so big. 

I'm going to process this with both my idealistic and realistic voices. It would be smart to expand the upscale line of work. But I refuse to abandon the everyday things, because that would be so not worth it. 

Coming soon ... my next calculation will happen in mid-July, after my first retail art festival of the year.

This post is the beginning of a research project. It is the first of a several posts on the same topic that I will write this year, and possibly beyond. My pottery business has grown considerably in the past two years, but my ambivalence to let go of my graphic design practice continues. I recently realized that I know how much I make per hour as a designer, because my contracts are based on an hourly rate. It's not an exact number, because it doesn't account for expenses, or for the time I spend doing non-billable work. But it's a pretty good idea. I want the same sense of "knowing" about my pottery business. How much am I really earning per hour by making pots? I don't need an exact answer, just a pretty good idea.

I often hear people say "add up the costs of your materials, then make sure you pay yourself an hourly wage, and this is how to determine the prices for your pots," and I think "It doesn't work that way." It's not a normal job like graphic design, where you are entitled to compensation. There are countless intangible factors that determine the value of your work, and "time" might be the least important. So to presume an hourly wage for yourself is just plain foolish. 

So I am proposing that professional craftspeople join me in taking a different point of view of the "hourly wage" subject. Instead of pondering what I should earn per hour, I am going to calculate what I did earn.

Here's my methodology ... whenever possible I will separate pottery sales into quantifiable portions. I will keep track of the time I spend to complete the work. I will subtract any applicable expenses from the sales amount, then divide what remains by the number of hours spent.

The "quantifiable portions" will include wholesale orders, retail art shows and festivals, open houses, registries, etc. (Maybe I'll even settle the debate between the predictable volumes/lower prices of wholesale, vs. the unpredictable sales/higher prices/longer hours of retail?)

How I price my pots ... it's a long-term process, and definitely not based on a presumptuous hourly wage, which as I expressed before, is a dim idea. New pot designs start as low-priced prototypes. The prices and designs of good sellers grow over time. Slow sellers are eliminated. I compare new pot designs with the price points of my established good sellers. I also compare my prices with other potters who are working at the same level as me. I don't want to overprice, because I think a handmade pot should be affordable to average people. However, I am more careful not to underprice my pots. Underpricing is indulgent and amateurish, and harmful to other professional potters.

Now on to the calculation ... this first calculation is for a large wholesale order. It is the largest order I wrote at the Buyers Market in February. It contains a good mix of low, medium, and high priced items, therefore it should be a good measure of wholesaling in general.

I kept track of the time spent working on it, including the following tasks:
• preparing clay (recycling, pugging, wedging)
• building pots (throwing trimming, altering, hand-building)
• loading and unloading the kiln
• glazing
• studio cleanup
• applying hang tags to finished pots
• packing for delivery
• accounting

I did not track the time spent on tasks that didn't specifically apply to this order, such as mixing glazes, or the afternoon I spent carrying a year's supply of clay down the stairs into my basement studio.

From the total dollar value of the order, I subtracted the following expenses which I could quantify:
• clay
• shipping boxes
• a percentage of my Buyers Market expenses, equal to the percentage of Buyers Market sales that this order represented (by far this was the biggest expense related to this order)

I did not subtract the following expenses which I could not quantify:
• glazes
• tools
• equipment use and maintenance
• utilities
• bubble wrap and packing peanuts (some purchased, some recycled)

The dollar amount that remained was divided by the total hours spent. And in the end, I made $24.74 per hour. My official response to this is "not too shabby!" I feared that I was making less than minimum wage, but the real answer is nowhere close to that. The answer fits my self-evaluation as an up-and-coming, but bona fide professional potter. My time has a good value, but the value has room to grow, as do my work efficiencies, craft skill, and business development.

One final note about calculating my hourly value ... this is not a job that I can do for 8 hours a day like a normal job. The longest I was able to work in one day is 5.5 hours, and at that point my elbows and hamstrings were aching! My usual workday is more like 3 or 4 hours. So that's another issue I need to address ... how to reduce the physical strain of making pots in order to be more productive per day. (Then again, having worked in the corporate world, I know that many people with 8 hour-per-day jobs don't spend 5.5 of them productively, so maybe I shouldn't worry about that.)

Coming soon ... I will repeat this calculation for other wholesale orders over the next few months. Maybe different types of orders will have a different results, or I will get better as the year goes on.