Ethics Question

Re: Ethics Question

John K in Hastings, MN

>There are no ethics involved in pricing things clearly and honestly.

Cost of materials is certainly a factor. Your labor is another. The third is the desirability of the piece, which is solely up to the buyer.

In an auction, the winner is the one who is willing to pay more than anyone else. You might find that doubling or tripling the price makes the piece more desirable, not less.

John

Re: Ethics Question

Scott Thorburn

>In my mind it all depends on how you price your work. Some people price work on the basis of what the market will pay for. If that is the case your pricing will have little to do with the cost of materials. And by extension a piece of figured or special wood would command a higher price if the nature of the wood made the item more desirable to the buying public. This could lead to a higher mark up for items from special wood.

If you are in the cost plus labor rate plus "x" markup camp your special wood items would be a little more than your regular items because cost of materials is only a percentage of the selling price.

For most of the items I sell I am in the, what the market will bear camp. If I can't make an item economically enough I either don't make that Item in the future or I figure out a better way of producing it.

Re: Ethics Question

Bill Grumbine, Kutztown PA

>Hi Tom

Ethics don't enter into it. That might sound like a surprise coming from me, but the stuff we make is luxury, optional stuff. No one is forced to buy it. We can price it however we like, and either it will sell or it won't. I have seen beautiful work that is way underpriced, and I have seen firewood priced obscenely high. It is up to the buyer and the seller to agree on a price for anything we make, and both have complete freedom to negotiate the sale.

One of my sales tactics involves the technique of the on the spot discount. I don't discount everything or just anything, but often I will have a customer who cannot decide between one piece or another. I will often help them in their decision by offering a small discount (usually 10%)) if they take both. They go away happy and I have sold two pieces instead of one, or worse none because they couldn't make up their mind. Some might say this is unethical since I do not offer the same discount to everyone, but that is my business, not theirs. No one ever bought a piece from me without being satisfied with the price they paid (or at least the willingness to buy).

To go to your question, I charge a premium for highly figured or rare pieces. Most of the time my cost for materials is limited to the time I have invested in harvesting them, but I have overhead in the form of machinery, shop expenses, etc, and I am beginning to get somewhat of a reputation for the quality of my work, so I can charge accordingly. I charge more than I used to, and less than I will in the future. If someone doesn't like my prices (and a lot of people don't), they are free not to buy the stuff. On the other hand, I have not yet experienced a shortage of customers, so I am going in the right direction.

Bill

Re: Ethics Question

Darrell Feltmate

>As I look at the question, ethics is the deciding factor in pricing. How can we be honest and open in our pricing? Each piece may determine a different style of pricing. I think of some of my pieces as being a quantity item for sales. These I price by the time involved in the making as well as the prices of the market place. Price fixing is dishonest but being fair to the market is not. There are also pieces that are "one-of" but turned in a fair amount, such as bowls or platters. These I price with a scheme that works on the cubic size of the bowl. Art pieces that reflect a wood of particular color and grain, however, are priced fairly arbitrarily. One has to consider the skill involved in the piece, the hours taken, the practice beforehand, the price of the wood, and the desire of the market place among other factors. If both you and the customer are happy with the price, and you are consistent among pieces of relatively similar nature, it seems to me as an honest transaction.

Re: Ethics Question

Sam Simpson

>Hi Y'all,

I love questions like this. The answers always help us to better understand the folks we are posting with. There are some great answers here.

Something that is considered, when pricing in the antiques trade, is the replacement value. If you had to find another one just like it, what would you expect to pay? All of a sudden your price doesn't look too cheap. Or does it?

Regards Sam Simpson.

What Ethics got to do with it?

Ron Sardo in PA

>I have to agree with Bill G. on this. Ethics has nothing to do with pricing highly figured or rare pieces of wood. It is more of a supply and demand thing. Think about it a moment. It takes the same amount of time to fell a plain maple tree as it take to fell a birds eye maple tree. But if you go to a lumber yard, birds-eye wil sell for more. The reason is there is less of it around, it is more highly praised and people are willing to pay more.

When it comes to pricing remember one simple rule. It is easier to lower a price then it is to raise a price. As Bill G. does, marking his price high, it is easy to offer a discount. This helps the customer think they are getting a bargain and possibly increased sales. All that counts is the customer walking away happy. It is not unethical to make a customer happy.

Re: Ethics Question

Joel Hunnicutt

>I agree with Bill, to a point. This is an open transaction between a willing buyer and seller and as long as there is no misrepresentation (materials, use, ect) ethics doesn't enter into the equation.

I don't discount my prices at all. I feel that I ask a fair price for my work and that price is the same for everyone. I do, however, sometimes goive a bottle stopper to a client who buys a particularly nice piece as a bit of a thank you for doing business with me.

Re: What Ethics got to do with it?

Mike Schwing from Maryland

>Yup. I'm with Ron. In a former life I was a car salesman. Sold both new and used. I preferred used car sales, as you couldn't shop around for the same car at a reduced price - the one you were looking at was a one of a kind.

I also liked the fact that the prices weren't plastered on a sticker in the window. Whenever possible I would wash off the shoe polish price on the front windows so that I could name my own starting price. Always made the customer feel good when I'd back off a grand or two, right back to the real starting price. Funny how the same price would feel like a rip off and a good deal depending on the opening price, yet thats human nature.

You know its scary when...

Ron Sardo in PA

>You know its scary when a used car salesman agrees with you. ;-)

Re: Ethics Question

Russ Fairfield

>Pricing isn't an easy thing, but it has nothing to do with ethics. It has everything to do with a satisfied customer, AND a satisfied seller. If either of you is unhappy, then the price was wrong.

There are a lot of questions that go into the formula. My opinion on a few of them.

Are you an artist or are you selling a commodity type product. The rules for time and materials costs do not apply to art. They do to a commodity product.

The artist gets what they can. The maker of a commodity product worries about time, materials, and market value. My opinion is that, if we have to be claculating a price on a time and materials basis, we shouldn't be selling truned wood.

A lot of the pricing depends on WHAT you are making, and how much they would have to pay for the same thing from someone else.

Is it something that has an intrinsic price or value. In that case the price has been set by the market, and the only thing the figured wood will do for you is sell it faster. An example would be a pen or other item that sells for $20, regardless of the wood. All the highly figured wood will do for you is sell it faster.

Is the highly figured wood appropriate for the piece that you are making?? Assume that a 12" Salad bowl sells for $125 in a plain but attractive wood. IThat same bowl may not sell at all in a highly figured wood, or you may have to lower the cost because some folks will look at the figuring as being undesireable for useing the bowl, particularly if there are any voids or obvious repairs.

Then there is where you are selling it. If you had to pay $300 and travel 1000 miles to get into an art fair, you had better be adding at least 25% to everything to cover the costs. If you are talking to a gallery, you will have to negotiate a price that they are comfortable with, and that you are willing to accept half of.

And the list goes on. Nobody said this was easy.

Re: Ethics Questio

Arch

>An interesting question with many blind alleys. At one time woodturning comprised a sort of guild made up primarily of tradesmen and hobbiests. I remember that In North America, woodturners were so few and far apart that ethical questions as a code of conduct for the market place or in the self-image of the workman wasn't an issue. As useful wooden objects began to be replaced with cast pot metal, plastics and ceramics, woodturners changed along with expected conduct. The craftsman woodturner became variously a professional, a hobbiest, a teacher and an artist to differing degrees. As with most desirable change, problems also arose. Other than the 'Golden rule' and knowing the right thing intuitively, I'm not sure that there is a common way to conduct ourselves as we wear our different hats.

I'll list some questions that you may have asked yourself over the years. Perhaps whether right or wrong lies within ourselves:

-not willing to share turning knowledge with others

-underpricing the professional market

-promoting shoddy work at 'dont care' prices that turn people off for all of us

-'all's fair' & 'caveat emptor' prices that the unknowing will bear

-wasting trees

-ghost work; completing and finishing,with his name on it, a piece barely begun by a too busy recognized artist with ethical problems

-slightly returning as your own work, another's turnings or thrift shop and 'Walmart' bowls

-selling or giving away hazardous objects

-riding your hobby excessively at the expense of family and your growth as a person

None of _us are unethical, but we just might know of someone who could have and just one time..... Arch

Re: Ethics Question

Keith Tompkins

>This subject has come up before, and there is another approach to selling your work.

When your work is sold by a gallery, customers are investing (hopefully) in art. The bigger the artist's name, the more his pieces command. At the higher levels, price has absolutely nothing to do with the time involved in making the piece. The artist has worked to establish himself, and is now reaping the rewards of his (or her) efforts.

Many astute collectors speculate in the art field, buying pieces they like by unknown artists in the hope that the price will skyrocket in the future.

I don't think we should feel guilty about charging what the market will bear. When you add up the real costs to produce a piece, most of us a giving our work away.

Re: Ethics Question

Bill Grumbine, Kutztown PA

>Hi Joel

You might not discount the actual piece, but if you are giving someone a small gift for making a large purchase, it is a variation on a theme. I don't know what the prices are in your criteria, but let's say a bottle stopper goes for $12.00, and your customer buys a piece for $120.00, that is 10% right there. Of course, I could be way off here with my numbers, and I do not mean to put words in your mouth.

One of my guiding principles on dealing comes from an old book - Proverbs. The actual quote is: It is naught, it is naught, saith the buyer: but when he is gone his way, then he boasteth. Translated into modern English, it is essentially haggling in the finest of Mid -Eastern tradition, or negotiating in our current culture. The buyer complains, or vacillates in some way, the seller relents a bit on the price, the buyer grudgingly pays, but then goes his way and brags about the deal he got.

I don't know that I would call my own practice haggling, but while I set a fair price on my things as well, I also leave some room in the profits so that I can discount them and still make a fair profit (to me) and offer a deal to a customer who will go away feeling like they got a good bargain. If someone comes in and pays full price for another piece, I can't say that they were hosed by an inflated price, because they still made the decision to buy, and they are happy with what they got.

I have also offered discounts on prices across the board in the past as an incentive to buy at a particular show, but that was back in my pen days when the things I made were much more "standard". However, I do not care for the pricing scheme of writing a price, crossing it out and then writing a lower price below it as a matter of course. I see people doing that with every single thing they sell, and it smacks of the flea market mentality.

Bill

Re: Ethics Question

Bill Grumbine, Kutztown PA

>Hi Darrell

I know that you and I share a similar perspective on certain issues, so I guess I agree that ethics does play a part in that we need to be honest in our overall conduct of our business. I would venture to say that a person who misrepresents him or her self, or the product they present, is unethical, but if I make a bowl that I want to sell for $200, and you make the same bowl from the same wood and only want $100 for it, I do not see an ethical issue. At that point it becomes an issue of the buyer/seller contract. Is each party happy?

This is easy enough with one of a kind turnings, although for mass produced pieces, the issue is different. For example, if I made stacks of cherry pens, and sold them to one person for $20.00 each and to another for $30.00 each, that might be an ethical issue. But then again, what if the first person was a good repeat customer, and the other person was a one time only buyer? Each paid an agreed on price. But how about another variable? What if I told the person who was buying at $30.00 each that everyone paid that price, and then he talked to the second person and found out what I said wasn't true? That then is unethical on my part because I have lied to a customer. Until I get to that point though, everything is open and above board. I don't know if I am describing this very well, so if I haven't please let me know.

Bill

The market and the customer

Bob Hackett

>The one thing to keep in mind is that the pieces are yours,you created them and until you sell them to another,you own them.You are free to do as you wish with them.

That being said,it`s up to you and your own conscience what a fair price is.Is it fair to sell at less than market prices because you care to work at less than minimum wage?Is it fair to sell at prices that would be hard pressed to replace the wood if bought from a dealer just because you harvested it yourself and "it cost me nothing"(nothing except your time and gas/oil for that $500 saw you own,plus the vehicle that brought you there+back).Is it fair for a part time turner to sell his work for 25% of what the professional turner in the booth across from him needs to sell his work for in order to survive?These are all questions only you can answer,and they all involve ethics.

I once sold most of my pieces the first day at a show and brought some of my old work that I borrowed from friends,family and my own collection to fill in the spaces.A woman was about to pass by when she spotted an 8" flanged/natural edge bowl from my personal collection with a "not for sale" tag on it.She questioned why it was NFS.I told her it was there to give folks an idea of the work I was capable of,and was from my private collection.She replied that since I owned it,I could and should put a price on it.I really didn`t want to sell it and repeated this(it was the first successful piece I had turned like that).When she insisted that I put a value on it,I told her $250.She took out her wallet and laid the money on the table.I sold her the bowl and I`ve always regretted it.Now I have the first of every new departure in my turning,except one.She is happy,I am not,not what I`d call a successful transaction.I let money and a persistent buyer push me to do something I normally wouldn`t have done.I won`t make that mistake again.

Mainely,Bob

Re: The market and the customer

JamieDonaldson

>One of the few times ethics should be an issue is double pricing-one price for a gallery and another for a craft show. Since most galleries have a 50% of retail commission, it becomes necessary to have uniform prices regardless of sale venue. You don't want a buyer to see a piece with a 50% cost difference between buying it in the gallery that represents you, and the gallery doesn't want you discounting their price at a craft show.

Gallery pricing

Bob Hackett

>We`re going thru this now as a matter of fact.A group of local craftsmen are going in together to start up a gallery,I will be the turner.

We`ve talked some about the sales outside the gallery.We all agree that if the customer was refered then the right thing to do is the charge accordingly and pay the gallery a commission on all future work.What we haven`t agreed upon is whether ALL our work needs to go thru the gallery.We also haven`t come up with a plan as to dealing with people who do not forward a commission(an unethical thing to do).

It would seem that the price of everyone`s work will need to increase the same precentage as the commission.Some folks are not happy about this,I see no way around it.Is there an alternative that I`m not seeing?

Re: Ethics : Thanks To All !!

Tom in Red Deer

>Thank You one and all for your responses !!

You not only answered the question I asked but also answered a lot of questions I didn't ask.

There is much food for thought in your replies.

I am the salesman for my stuff so although there are no gallery fees to pay, I will have a lot of travelling expenses to pay.

There is one thing that no one mentioned. I put 10% of EVERY sale in a seperate account that is my "Replacement Equipment account." That is for stuff like my lathe, bandsaw, tablesaw ect. That way when one breaks or dies hopefully there is enough in the kitty to buy another one. Does anyone else do this? Does this make any sense?

Anyway, thanks again for all your comments.

Tom in Red Deer

Re: The market and the customer

Bill Grumbine, Kutztown PA

>Hi Bob

I can understand your point raising some of these issues, I am not sure where you are going with it. The concept of fair doesn't enter into the type of business we are talking about here. That is, fair does not equate with ethical. The world of business has a way of dealing with those who buy high and sell low. It is called bankruptcy. The same goes for turners who sell for less than it costs them. Unless they are monumentally stupid, and rich enough from another source to suport that stupidity, they are going to run themselves into the ground eventually.

Competing turners have to determine from their own code of honor where they will compete. That part is ethical. I will not enter a venue that some of my friends are in just because our work is not comparable. With others, I have no problem. But to ask whether or not a practice is fair because one person sells for less than another doesn't work here. We are making things that are expressions of ourselves. It's not like we are all selling the same model lathe and some are undercutting others. Even if we were, the business model would step right in and correct the situation if it was warranted.

Let's flip the question. Is it fair for one person to demand another raise his prices to accomodate the first person's sense of the market? Is it fair to make someone of lesser skills try to compete with those who talents and techniques are more developed? We are operating in a free market, and people can assign whatever value they want to a piece. If they don't do it right, they go out of business. If they do it right, they prosper. There does not need to be any sort of outside control. All that does is stifle the whole process.

Then there is the issue of competition. I am not out there to make all my fellow turners feel good about themselves, I am out there to make money to feed my family. Back in the old days I made lots and lots of pens. I could make them faster and better than anyone I knew, and I kept my prices at the same, or a little bit higher than my competitors. That translated into more money for me because of less time involved to produce. Then I added laser engraving. We got hooked up with a guy who was willing to work with us and with his ability with the laser, my wife's ability with setting up the files, and all the other stuff that goes into it, we offered laser engraving at our cost, which was 1/3 of the price of the next closest guy! It drove sales through the roof, and we were kicking butts left and right for a long time. Was that wrong, unfair, or unethical? No way. It was a good profitable business practice which enabled me to generate a large amount of profit for my company. Over the years things changed, the profits disappeared, and I moved on. I do not harbor any ill will against those who undercut me on price, or those who flooded the market. It is a fact of life. In fact, I trained literally hundreds of my competitors while teaching at Woodcraft, so I really can't beef about it.

As far as galleries go, I have gotten away from them and more than likely will never return, mainly for the reasons you mention. I have no problem keeping my prices the same as a gallery. I have no problem offering a commission to a gallery. But, I have a big problem with some of the leeches out there who think that once my work enters their gallery, I am obligated to support them with checks from every piece I sell. Right now from word of mouth and the internet I have more business than I can keep up with, and the thought of having to subject myself to some gallery makes my skin crawl. Even if the business dries up, I doubt I could bring myself to put that yoke on my shoulders again.

Bill

Re: The market and the customer

Keith Tompkins

>That is a good point, Jamie. In fact if a gallery is aware of the practice, you have probably ended your relationship with that gallery. Some galleries insist on a signed contract concerning this issue.

Although selling your work through a gallery is not an ideal situation, there is a upside.

A successful gallery can introduce your work to a certain clientelle that you may not have access to otherwise. For instance, major collectors and museums rely on the expertise of certain galleries, and purchase only from these galleries. (as a rule)

Because of a gallery's reputation, they can sell an artist's work for far more that the artist himself could, and at the same time, add a certain legitimacy to his work.

Past questions

Bob Hackett

>Bill,

Where I was going was,I was bringing up old discussions I`d had with other turners.Perhaps I should have said that in the paragraph with the questions.As I said in the first part of my post,the pieces are yours,do with them as you please.

I`ve given away pieces and traded pieces with craftsmen working in other media.More than once this has raised eyebrows from people who have paid for my work.It may have impacted my sales but I`ve never worried about it.

The gallery questions relate to my experiences with local galleries too.More than once I`ve packed up my work and left a gallery because I felt thier demands to be too restrictive.I wasn`t happy with any gallery till I delt with Thomas Moser.Moser`s focus is to help local craftsmen and he and his staff go out of thier way to help any way they can.Thier approach was to ask me what I wanted for a piece then we would adjust up or down(usually up in the beginning).After we found a price I could live with they added 20% and put the piece out.When the piece sold,I recieved my check,the name and adress of the person who bought it and they also furnished the customer my contact info after first clearing it with me.They never expected any commission on follow on sales.I once asked why they opperated that way and was told that as far as they were concerned,I and the other craftsmen were doing them a favor by dressing up thier showroom with our work so they just were returning the favor.Quite a departure from the other local galleries.

I know that any gallery is a business at the heart of things and they need to turn a profit.I hope to do all I can to make the endevor we`re entering into a successful and profitable one.Along the way I hope to bring some of what Moser did for me into the mix.The tightrope I need to walk seems to be,bringing in that profit without gouging or restricting either the craftsman or the customer.I know it`s going to be an eye opening experience to be on the other side of the table.

Mainely,Bob

The Price of a Thing is What It Will Bring!

Garrett in Victoria BC CA

>

Re: Ethics Question

Ace Foster in Ben Lomond 95005

>The short answer, I think, is yes, it is ethical.

It gets into an area I think of in terms of "If you are willing to pay me $X for this piece, you can take it with you, so you can look at it. Otherwise, I will keep it so I can look at it."

And there are pieces of wood so beautiful or rare or hard to replace that I simply won't let go of them. Period. And I'm now old enough and good enough and confident enough that I can say so, and stick to it. It's been a long hard climb.

Ace