6 ways to sell your products & make money from your art
Last week I got an email from someone asking me, “Do people really make money selling paper products and gift items?”
Insert the sound of me gasping on my side of the screen.
The consumer products industry is an $635 billion (with a B) industry based on the last stats I saw. Stationery alone was $8 billion; which means there is a lot of money to be made.
Is everyone in the product space making millions or hundreds of thousands of dollars? No.
Are there independent brands making 6 and 7 figures annually? Yes.
Is there opportunity to make a good living and build a profitable, sustainable business in this industry? HECK YES!
We are in a creative field, that values talent and unique ideas. As entrepreneurs we have flexibility to take our businesses in any direction we please. We can say yes to new opportunities, no to things that aren’t working. We can try something, fail and try again.
We have endless opportunity and it’s up to us to set financial goals for ourselves and our business, then build a plan to hit those goals.
So, how are people selling their products and making money? Which sales channels are they using?
Let me break it down for you…
Retail: Selling direct to the end consumer, people that are going to love, use and/or gift your products. Designers are selling online via their websites, on third party platforms like Etsy or in-person at craft fairs or holiday shows. In-person shows are a great time to get customer feedback and see what people are drawn to. You set the retail price and keep it!
Wholesale: Selling to retail outlets that will resell your products to the end consumer. This includes selling to brick & mortar shops, online stores or anyone that has a valid resellers permit. Wholesale customers purchase your product outright from you and reorder as necessary. You set the wholesale pricing, they set the retail price in their store (typically double what they pay wholesale). You get a lower price per piece compared to selling retail, but are selling in higher volume.
Consignment: Selling in a retail store, wherein both designer and retailer get paid once the products sell. Unlike wholesale, in consignment retailers do not purchase the products outright and the retailer may return or swap out merchandise. Consignment agreements and payment splits should be negotiated ahead of time; manufacturers get a bigger piece of the pie, typically 60 - 70%. Good record keeping, inventory management and sales tracking are important with consignment.
Custom Work: Working 1-1 with customers to provide a unique product or service tailored to their needs. This could include things like custom wedding invitations, baby blankets, jewelry or corporate holiday gifts. Designer sets the pricing, creates the project timeline and works directly with the customer through completion. Can be time intensive working with the clients, but potential for big bucks.
Licensing: Granting others the right to use your artwork, ideas and concepts on physical or digital products that they create and produce in exchange for compensation. Each licensing agreement is different with regards to how art may be used, when you’ll be paid and payment structure, etc. Typical payment structures include flat fee arrangements, royalties based on sales or perhaps a combination of the two. Once it is set up, licensing has the potential to be passive income!
Collaborations: Partnering with one or more other brands produce new products. A great example of this is the Thimblepress x Moon & Lola collaboration, where unique talents and skills are combined to create an amazing collection of products. Like licensing, each collaboration is different in terms of how responsibilities and compensation are split. I recommend having a contract in place for any licensing or collaboration opportunities.
What does this all mean and where should I start?
Most companies start out utilizing a mix of these sales strategies and that’s okay! When I started out I was mainly doing custom work and retail sales through Etsy, then I added wholesale and did consignment in a few shops. I later ditched custom and consignment to focus solely on retail and wholesale and that’s when my business saw big growth. Don’t be afraid to test the waters, but don’t try to do it all either.
It is also worth noting that each of the sales channels listed above cater to different customers and require different go to market strategies— for example, your retail your customer is the end user, for wholesale it is the retail shop, for licensing you’re working with other manufacturers. Your messaging, order process and how you sell to these different customers will vary. Ask yourself, who do you want to be working with and building relationships with?
It is important to diversify your revenue streams so that you have money coming in from different sources. However, you don’t want to spread yourself too thin.
Companies that are most profitable are focused on doing a few things REALLY well.
Hone in on the business model that feels right for your products and good for you, then focus your time, energy and resources there.
-Katie
Connect with Katie Hunt
Katie Hunt is a business strategist, podcaster, mentor and mama to four. She helps product based businesses build profitable, sustainable companies through her conferences, courses and coaching programs.
Website: prooftoproduct.com | Instagram: @prooftoproduct
