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
• 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.