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The Hourly Earnings Project: A Working Potter Spends a Year With a Stopwatch and a Calculator
Posted By Mea Rhee On June 1, 2011 @ 8:24 am In Ceramics Monthly,Daily,Features,Open Studios | 36 Comments
“Thirty dollars for a mug! How long did it take for you to make that?” Anyone who has ever sold pottery at an art festival has probably heard a similar question in response to the prices of their work. And many have appropriately responded, “Oh, about twenty years” or whatever the number of years it has been that they have been developing their work and their voice in clay.
Those questions can be pretty frustrating and it can be pretty hard to quantify the amount of time spent on making pots. But Mea Rhee decided she wanted to come up with a good answer so she could be sure that her prices were where they needed to be. So she set out to track her hourly earnings. I first heard about this project on the Ceramic Arts Community Forum, but Mea also prepared an article that appears in the June/July/August 2011 issue of Ceramics Monthly. I’ll share that article with you today. – Jennifer Harnetty, editor.
I am obsessed with measuring. I adore all the measuring devices that potters use; calipers, scales, hydrometers, etc. I am always preaching to my pottery classes “why guess, when you can know?” I don’t mind all the vague abstractions involved when making pots, but when I can know something precise about my work, I measure it.
My pottery business has grown considerably in the past two years, but my ambivalence to let go of my graphic design practice continued. I realized that I knew how much I earned per hour as a designer, because my contracts are based on an hourly rate. I wanted the same sense of “knowing” about my pottery business. How much am I really earning per hour by making pots?
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.” This approach is disconnected from the real-world factor known as “market value.” Is anyone willing to buy your pots, and for how much?
So I adopted the opposite point of view about the value of my time. Instead of pondering what I should earn per hour, and using that to determine the market value of my pots, I started with the current market value of my work, and used that to calculate what I did earn per hour.
Here’s my methodology: Whenever possible, I separated pottery sales into quantifiable portions. I kept track of the time I spent to complete the work. I subtracted any applicable expenses from the sales amount, then divided that by the number of hours spent. The “quantifiable portions” included wholesale orders, retail art festivals, and an open house. Not only was I looking for the overall value of my time working as a potter, I was also comparing these different avenues of pottery sales, hoping to uncover the most profitable ways to spend my energy.
Part 1: Large Wholesale Order
This first calculation is for a large wholesale order. It is the largest order I wrote at the Buyers Market of American Craft in February 2010. 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, handbuilding)
• loading and unloading the kiln
• studio cleanup
• applying hang tags to finished pots
• packing for delivery
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 ton of clay into my basement studio.
From the total dollar value of the order, I subtracted the following expenses that I could quantify:
• shipping boxes
• a percentage of my Buyers Market expenses equal to the percentage of Buyers Market sales that this order represented
I did not subtract the following expenses that I could not quantify:
• equipment use and maintenance
• 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 first calculation is “not too shabby!”
Part 2: Everyday vs. Fancy Wholesale
This second calculation is also about the wholesale side of my pottery business. I compared two different wholesale orders side-by-side. Their total sales amounts 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.
I followed the same parameters as before, in terms of the time and expenses I tracked and didn’t track. 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. 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. Everyday functional items are my reason for being in this business. 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. And now my inklings are being confirmed. I wish the difference wasn’t so big.
Part 3: Big Art Festival
The third calculation of my project is the first to analyze the retail side of my business. I’ve wondered for years whether wholesaling or retailing is more profitable for a pottery business. There are clear advantages and disadvantages to both, but is one superior to the other?
Artscape Baltimore is my favorite art festival. It is a huge and multi-faceted urban spectacle, produced by the city of Baltimore. I’ve done it for eight years now, and throughout this churning economy, my sales there have grown every year. However, in the context of hourly earnings, this show has a big disadvantage: crazy long hours. That’s ten hours on both Friday and Saturday and eight more on Sunday. 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.
I didn’t produce the pots for the show in one continuous time block like a wholesale order. So to determine how many hours I spent on production, I used the data I collected from the three wholesale orders that I previously calculated. I ignored the task hours and expenses that were wholesale-specific, and determined the “dollars-per-hour” just to produce pots and apply hang tags. I multiplied this 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 $ per hour number, which gave me the number of hours it took to produce and tag the pots I sold.
Notice that I only counted 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—making pots is not a normal job, where you are entitled to income in exchange for working hard. For the unsold pots that I brought home from the show, 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 (this takes much longer for retail; I spent 1.5 hours adding up receipts, counting cash, and processing credit cards)
From the total sales amount, I subtracted the following expenses:
• booth fee and application fee
• credit card merchant fees
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 kicked wholesale in the backside. Hmmm. Maybe it’s not fair to make conclusions now, let’s see how the other shows fare throughout the rest of the year.
Part 4: Little Art Festival
Arts in the Park is a small, locally minded, and thoroughly charming event, held in Towson, Maryland. This is a good, quality show, regardless of its size. The art is good, the setting is postcard-perfect, and the event has a strong grasp of its own identity. My intention for this portion of the project is not to compare good shows with bad shows but to compare small shows with big shows.
There are many differences between the processes of a small show and a big show. The scale of everything is very different; a small show takes much less planning and heavy lifting, the hours are usually shorter, and it’s a lot cheaper to do a small show. During the show, I often felt like I was just relaxing in a beautiful park. When it was over, I wasn’t even very tired (unlike after Artscape when I felt like a cooked noodle).
So is it better to spend more effort at a big show or less effort at a little show? I added up the hours I spent on all the same tasks as before. I subtracted all the same expenses from my sales total as I did before. And at the little show, I made $16.66 per hour.
Ugh!! That stinks!
Remember how I said I felt like I was relaxing in a park? That’s because there were no customers around. All the artists were baffled by the sparse attendance, because the attendance had been much higher in previous years.
I’ve done my share of small shows in the past, not just this one, but their results are collectively disappointing. Even when they look promising, they don’t have enough presence to draw crowds consistently.
And I’m not saying that big shows are always good. Some of them are overpriced and overproduced. But if you put your brain into choosing carefully, a big show that is well established and expertly produced has more substantial qualities, such as credibility and momentum, which can attract a productive crowd. Small shows have nice qualities like coziness and good intentions, but to those of us who are trying to earn a living wage, those things don’t have much value.
Maybe another way to put it is “anything worth doing takes a lot of hard work.”
Part 5: Holiday Open House
This is the fourth year that I’ve held an open house around the winter holidays. An open house is very different from an art festival on many, many fronts. For starters, there’s no booth fee! However, a good art festival spends your booth fee on marketing and infrastructure, and I had to do the same for myself. I printed and mailed a postcard invitation, and provided food for the event. Those expenses added up to $318, which was still less than the booth fee of most good-quality art festivals.
The time and labor requirements were very different too. The middleman, known as my car, was eliminated. I only needed to move my display and pots from one room in my house to another room. But, and this is a big but, I also had to remove the furniture from my living and dining rooms, and thoroughly clean the place. Overall, setup and take down for an open house took more time than taking my display to a festival site.
But, and this is an even bigger but, here’s where an open house is far more efficient with time. Unlike the casual browsers that must be seduced at an art festival, the attendees at an open house are already fans. They have signed up for my mailing list, responded to an invitation, and gone out of their way to a private residence with the intention of buying. This means the selling can be condensed into much shorter hours. I was open for five hours on Saturday, and four hours on Sunday. Compare that to the 28–hour marathon that was Artscape Baltimore.
These customers have more value than just sales. Those who already own your pots can provide the most relevant feedback. It pays on many levels to maintain a customer list, and inviting them to an open house is a great way to stay in touch. It’s important to remember that the open house taps my customer base without growing it, so I am careful not to take too much advantage of this resource. Growing my customer base is best accomplished at retail shows.
For the first time, my gross sales at the open house were higher than any of the festivals. After factoring in all the differences in cost and time, I earned $46.81 per hour. In other words, the open house blew away all other forums for selling.
Of course these dollar amounts are specific to my business and every other pottery business yields different numbers. So please don’t quit your day job tomorrow expecting to make $35 per hour this weekend selling your pottery. Here is my experience level in a nutshell, so you can prorate your comparisons based on your own experience: I made my first pot in 1994; sold my first amateurish pots in 1996; established my own pottery studio, part-time, in 2002; began wholesaling my work in 2007; and in 2010, though I still did some design work, I made most of my income from my pottery business, and it was enough to support myself financially.
|Money In, Money Out
Based on Mea’s calculations, if you want to track either retail or wholesale orders, the following time considerations and expenses incurred should be considered.
• Preparing clay (recycling, pugging, wedging)
• Building pots (throwing, trimming, altering, hand-building, etc.)
• Loading and unloading the kiln
• Studio cleanup
• Applying hang tags to finished pots
• Packing for delivery
• Writing and sending a blast e-mail
• Packing the pots and display into my car, and unpacking afterwards
• Applying mailing labels and postage stamps to the postcard invitations
• Setting up and taking down the display
• Baking brownies and cookies
• Clearing furniture and cleaning my house
• Shipping boxes
• A percentage of my Buyers Market expenses, equal to the percentage of the Buyers Market sales that the order represented
• The hours that the event was open
• Booth fee and application fee
• Credit card merchant fees
• Parking (if applicable)
• Food (snacks for the customers and meals
for me and my guest artist)
• Baking brownies and cookies
• Printing of postcards
• Postage for postcards
• Credit card merchant fees
While the numbers may not apply to anyone else, I do think the correlations can be applied to many pottery businesses. Wholesaling can add stability to a pottery business, if you are willing to accept lower profits. It can also provide income during the colder months when there aren’t as many retail events to attend. And within the wholesale market, upscale work yields more value than everyday pots. Retailing can be more profitable, but it’s less predictable. Careful decision-making is essential, plus some seriously strenuous weekends. And it’s not “double the profit” as some wholesalers speculate, because of all of the extra hours and expenses it takes to complete a festival. In my business, retailing earns 32% more per hour than wholesaling. This is a significant percentage, but certainly not “double the profit.” Open houses yield the most profitable use of time, by targeting one’s best customers. I recommend that all working potters incorporate an event like this into their business plans, if they haven’t already.
Based on My Calculations
For me, it makes sense to continue doing wholesale, retail, and an annual open house. However, I now plan to scale back my wholesale work in favor of one or two more large retail events per year. Within my wholesale line, I will shift further into the upscale market, without abandoning the everyday pots. And even though the open house was by far the most profitable, I will keep it to a once-yearly event, so as not to dilute its value. And do I feel better after completing this exercise? Absolutely. Now I can make clear-headed choices about future business planning. And before I started this project, I feared that I was making less than minimum wage, but the real answers are nowhere close to that. The results fit 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.
the author Mea Rhee lives and works in Silver Spring, Maryland. To see more of her work, visit www.goodelephant.com.
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