Merchandising 101: A Broad Primer on how to think about it and how to approach it

In this episode of the Art Business Morning Show, Patrick dives deep into the importance of merchandising in Q4 for art and photography businesses. He discusses strategic price point variations, the power of changing your perspective on cheaper merchandise, and the necessity of having multiple print types to cater to different customer preferences. Patrick also highlights the effectiveness of live art shows and the game-changing potential of print-on-demand merchandise. Additionally, there's a notable emphasis on proactive inventory management given current supply chain disruptions. Lastly, Nick and Patrick explore strategies for starting or reassessing an art business from scratch, focusing on understanding different stages and the importance of quick validation through sales.

Podcast Transcribe

Patrick Shanahan: All right, coming up on today's edition of the Art Business Morning Show, we're having a discussion about merchandising during Q4—price points, print types, and merchandise, with a side note of "let's audit your thinking." It's been a while since I recorded one of these guys, specifically the Art Business Morning Show. What's up, Daniel from Long Beach, from Newport Beach? So, I know where you're at. Welcome to another edition of the Art Business Mornings, the show that will put you on the path to a six-figure-year art business.

Now, as I was preparing my notes for today's show, I was reminded of a viral video from a few years back. I'm not sure if you've ever seen this thing, but it's powerful. In the video—and I'm going to include it in the show notes, Instagram, you're going to figure out another way to get it—it shows a blind beggar in some sort of European city center, maybe Scotland or Ireland. He's sitting with a tin cup and a sign that says, "I'm blind, please help." Various people are shuffling by and throwing some change in his cup. Then, a woman walks by, stops in front of the sign, grabs it, rips a pen out of her jacket, turns the sign around, and writes a new message on it. While she's doing this, the blind guy reaches out and touches her shoes. Presumably, because he's blind, his other senses are more in tune. He feels the shoes as a way of identifying her. She leaves, and then it shows the guy sitting there, and suddenly it's raining donations. He's getting change, dollars, everything. Later in the day, the woman comes back, and the blind guy reaches out and feels her shoes again. He knows it's her and asks, "What did you do to my sign?" She replies, "I wrote the same but with different words." The new sign says, "It's a beautiful day, and I can't see it." The video ends with the words, "Change your words, change your world." It's powerful; it could possibly cause a tear in your eye—not mine, of course, because I'm a macho man, but it's powerful.

This story stuck in my mind as I was finishing the script for today. My iteration of it is going to be, "Change your thinking and change your art or photography business." We can apply this to merchandising. I want to talk about merchandising broadly. I see a bunch of you guys, customers, on here. This is just another spin on the session we did on Friday during office hours, but I know not everyone sees those, so I have to repeat this message.

Before we can even talk about merchandising, we have to talk about price point variation and how important this is. I say this all the time, but it bears repeating. My followers—Todd Monks, Jonas here, Courtney Einhorn, all of our followers—fall into a socioeconomic bell curve. We all know what a bell curve looks like, right? At the bottom are those with the lowest socioeconomic status, people who don't have any money to spend on anything. Then it goes to lower middle class, middle class, upper middle class, and high net worth individuals. You need to have price points in your business for everyone on this bell curve. If you change your thinking, you can change your art or photography business. When you don't have intro-level price points, you miss out on low-commitment, cheaper buyer sales that would potentially go to people on the low end of the bell curve. The flip side is also true: when you don't have high price points, you can miss out on the whales, the high net worth individuals who aren't afraid to spend $10,000, $20,000, $30,000, $40,000, $50,000, or even higher. This becomes so important.

I've looked at so many different stores and operations where the starting price point is in the thousands, the several thousands. It's $1,800 for a limited edition, and then it goes up to $10,000 for the originals, and that's it. When you have lower price points, you open yourself up to all these other markets. It's as important on the low end of the scheme as it is on the high end. The good news is, it doesn't matter what the item is. I don't care how you achieve the price point; the point is you need to have a price point for those inexpensive folks. I think back to my library video. Change your thinking, change your art or photography business. Everyone thinks of cheaper price points as crappy quality, small, making very little money, and not worth it. They think, "Why would I have it? I'm here to target high net worth individuals." Understand the game you're playing. You're not hobbyists; you want a business that grows year over year and monetizes your creative talent. Understand the game you're playing; you are playing the long game. When you understand that, when you change your thinking to the long game, you can change your whole business.

You have to understand what these cheaper price points do for your business. It's not about how much money you make on them. It's not about whether you think the merchandise is cheap and kitschy. It's about marketing. These cheaper price points get you a beachhead into your customers' homes. It gives you the ability to have one of your creations on a potential future customer's wall for perpetuity, or in their hands as a tote bag, or on their couch as a pillow, or as a tiny print in their bathroom. This is a profoundly effective marketing technique. If I wake up every day and see a tiny print of yours in my bathroom, or every time I grab a bag, I see a tote with your art, there is no form of marketing more effective than that. It's not an email or a social post; it's your art in my life every day for years.

When you understand this, when you change your thinking from "it's cheap, these are cheap buyers, it's cheap merch," you can change your business. It's like a Facebook ad stapled to my wall or hanging in my closet or sitting on my couch. It's profoundly powerful. Understand the socioeconomic bell curve that all of our followers fall on. It's not a fixed quantity. In five years, someone on the lower end might move up to the higher end. When you get a beachhead into their homes, you are top of mind when they are ready to make a larger purchase. So, don't think of cheap prints or calendars as lame. It's important. Change your thinking, change your photography business. It's profound.

Next, let's talk about prints and print types. For photographers, this is a no-brainer. This is what you sell: prints. For artists, some of you are hung up on only selling originals and not selling prints or limited editions. I don't understand why, but I get it. So, I have to go into my analogy. If I hired you to sell knives and you were going door-to-door, what would you have in your hand? You'd have the knives. You'd roll out a case with the knives, show them to me, let me hold them, look them up on a light, cut cans, whatever. You'd have the knives. Do you know how good a salesperson you'd have to be if you were knocking on doors with pictures of knives? "Buy my knives, Mr. Smith, look at these photos." Are you kidding me?

Let's apply that to our art or photography business. There's a famous UX/UI book called "Don't Make Me Think," which is the bible of that field. UX/UI is user interface and user experience. The book is about designing things so users don't have to think. For example, I use the Starbucks app, and it should save my drinks and be easy to use, but it makes me think too much. The same applies to selling your art or photography. Don't make me think. Don't assume your potential buyer is as creative as you and can visualize a jpeg on their wall. They can't. You are making them think too hard. Instead of just showing jpegs, hold up the actual print. Show it's real, ready to hang, doesn't need a frame. This is showing up with the knives.

Digital artists, this applies to you too. Don't just show screen shares or jpegs. Show the print in your hand. Understand merchandising 101: you need to have the print to show. There are five main media types every artist and photographer should offer. There might be circumstances where a particular medium isn't fantastic for your work, but in general, these are important. For our customers, it costs nothing to turn these on and find out what your customers want. Don't assume you're smarter than your potential buyers. Offer paper prints, canvas, metal, acrylic, and wood. Have samples of all five and be ready to show them.

If I called you up and asked to see the difference between paper, metal, canvas, acrylic, and wood, could you show me? You need the props to explain. You're the subject matter expert. Most artists and photographers I see don't have these samples. They lose sales because they can't show the options. You need the samples to articulate the differences. It's not a massive investment. Small samples can help you explain and sell. Without them, you're just showing pictures of knives. 

Live art shows and one-to-one video chats are so effective because they force you to have samples and show them. They force you to talk about your work and inspiration. That's why live art shows are powerful. I did an interview with Carol Walker, a customer and photographer, who did $27,000 in a live art show last week. She had all her prints on the wall, different media types, and explained why she loved them. It was beautiful merchandising, and the results were profound.

Understand why live art shows are so effective. They force you to merchandise, and that's critically

 important, especially with Q4 coming up. Now, let's switch gears to merch—tchotchkes, knickknacks, throw pillows, iPhone cases, puzzles, coffee cups. On the Art Storefronts side, we integrate with a company called Guten, which allows print on demand for merchandise. No minimums, no inventory. Some common complaints are that the merchandise is cheap and chintzy. Valid concerns, but change your thinking and you can change your business.

Pre-POD, merch was hard. Minimums, samples, down payments, inventory, hoping to sell it all. POD is a game changer. It's easy to offer merch now. Museums have gift shops with cheap, chintzy items, and they sell them. Offering low price points gives you a beachhead into people's homes. They could carry your art on a tote bag for years and then buy art from you later. Change your thinking about merch. It's not supposed to be high-quality. It's marketing.

Order samples, show them off, see the responses, give them away. It's marketing. Big companies give swag bags with their logo, and it's effective advertising. Stop knocking the merch. It doesn't have to be high quality; it's about getting your art into people's homes. 

Lastly, I live in Southern California, and I see 55 container ships parked in the ocean, which shouldn't be there. We have a coming infrastructure crisis. Empty shelves in stores are a sign. I'm worried, and you should be too. The printers we use are US-based, but raw materials come from China. Canvas, fine art paper, metal, acrylic, wood—all could be stuck on those ships. Don't go into Q4 without extra inventory. Get some now. We have the biggest discount with our vendors ever. Order as much as your budget allows to avoid missing out on sales. 

That's my rant on merch. I'm sticking to it. I want everyone to have the biggest Q4 ever. We'll talk more about merch as this rolls along. Thanks for listening, and as always, have a great day.






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