Commissioned Designers?

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TRACY ART & FRAME

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Does anyone out there pay there designers by commission? If so what % ?

I am working on a biz plan for an expansion idea and am considering this option.

My thought is to use 20% straight commission at design only locations with the framing being done at my distribution center.

The 20% number is what I'm currently spending on hourly and salaried payroll.

To my way of thinking this incentive would encourage more complex designs whit higher tickets. It would also make working on Saturdays a bigger incentive, and give the staff a reason to go beat the bushes for work.

Any thoughts or feedback is greatly appreciated.

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Diver Dave
 
DD,
I would be interested to hear what others have to say on this also. I have had this same idea, even for my shop. I also thought about handling it like a commissioned sales job and sending someone out "door to door" for onsight work. Has anybody ever done this? If so was it successful?

Jerry V
 
Dave,

When I first read this thread I thought you meant paying a commission to interior designers who bring work in to your shop. If I re-read it correctly you are asking about commission paid to your own sales people. Heaven help me if any of your employees are reading this, but 20% is higher than I've ever heard of. Most jobs I've investigated which included a sales commission did so at a rate in the single digits. If you're analysis clearly demonstrates that financially 20% makes sense then by all means. I'm a big proponent of non-owners being paid well enough so that they don't have to choose alternate careers.

I find myself wondering about the tax and Social Security ramifications.

Or am I reading this entirely wrong yet again? Do you mean that the commission would be the only compensation?

In any case I wish you well as you expand your business. And if you are proposing to pay a salary plus 20% commission what time may I have my interview?

Yes, I re-re-read and believe that by "Straight commission" you mean the latter. Do your showrooms have more than one designer in each? If commission is the only compensation it could be awkward for the first client who comes in after a slow morning. I stopped going to a shoe store in my neighborhood because the (obviously commissioned) sales personnel circle like sharks if you so much as pause near a display. Do you think any of your clients might be put off by such a charged atmosphere?

I would be reluctant to take a straight commission position (and I am a fabulous sales person!) because of the potential unevenness. Would it be paid based on orders taken or orders picked up and paid? I have to pay the rent and the daycare the same amount on the first of every month. If I don't make the same amount every week or every month how do I budget that. I know people do manage on straight commission, even some who are only paid quarterly, I just know I wouldn't handle that well.

I also wonder if you as the owner would see enough of the benefit if that much cash goes to the sales staff.

Have I answered any of your original question? Probably not but I certainly have said enough.

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Meghan C. McCord, CPF
J. Pocker & Son
Rye, NY
mcm87@att.net
 
we pay our top folk (both of them) a salary and then a commission based on their design work if the order is over $200.

You'd be amazed at what high quality work someone can come up with and how they can really sell it if they know they're getting a percentage of the action.

Historically, we've paid 5% of the total package (excluding art if they're selling one of our limited editions) but that includes the mats, the frame, the glass, and the fitting methods (preservation, archival, etc)

So, traditionally, one of my ladies is getting $25 per piece on a Sat. if she's doing a $500 framing job, which is not unusual for us. And this is over and above her hourly wage.

Hope this helps

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Michael LeCompte CPF
The Great Frame Up
 
It might be wise to pay hourly plus commission to avoid tax problems. There are very few straight commission jobs in the market place these days due to the changes and crack downs on independent contractors. Check with your accountant and/or attorney.

I think a low base plus a 10% or so commission should be the kind if incentive you are talking about. But I also sadly report that my employees have usually prefered an hourly raise to a bonus structure.

As to outside sales reps that really would be independent contractors. I say -- it has and can be done, BUT you need to work up a real PLAN and become a serious sales manager to make a go of it. A friend of mine was very successful doing this by having the reps sell art for the businesses and then framing to the decor.
 
I spent some years working for a straight commission in another industry. To be honest, I did well with it, but would not choose to earn a living that way again. More to the point, I would not consider commission-based compensation for anyone in my frame shop.

Commission plans have merit, but there are problems, too. For example, Framechick makes a good point about "circling sharks". Commission-based compensation attracts the sharks. If it's a straight commission job, then there will be more aggression than if the plan is a salary-plus-commission mix.

Personally, I don't want clients to get the sense that anyone here is trying to inflate the sale (a natural result of commission pay). I would prefer the focus to be on the client's expressed desires, rather than the desires of a designer trying to make next month's rent. The extras are offered because they contribute value to the client, not because they contribute $$ to the designer. (Purely at my discretion, there are surprise bonuses given for a job exceptionally well done.)

The shark mentality affects morale and peer relationships, too. If you adopt a commission plan, prepare for more peer-relationship problems. Squabbling over clients is an obvious one. If you allow designers to "claim" clients, then what happens on a designer's day off? Split commission? No commission? No matter how it is structured, the level of cooperation among designers declines.

Other considerations: Would commission apply equally to all sales? Only designated products/services? Sliding scales? Based on revenue or profit? How do you handle discounting -- especially if commercial bid-work is involved? Are you prepared to do the extra accounting -- and to prove every paycheck to the penny? What happens when the inevitable dispute happens?
 
I think any kind of commission in a frame shop would promote hostility among co-workers, and that would not be a pretty sight.

As a customer, I really don't like shopping in a store that pays commissions. Sometimes when buying furniture or cars, it's inevitable, but I always sense an unnatural pushiness from the sales people.
 
I have to agree with Jana on this one. Another alternative could be to give unannounced bonuses for unusually large sales. One of my old bosses did that, and rather than promoting competition between designers, it forced us to be more creative and to do more upselling.
The end result of all of this was a reputation for outstanding work, several articles in local newspapers and magazines and a lot of repeat business!

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Seth J. Bogdanove, CPF
22 years framing and still loving it!
The website for my new company is: www.La-Belle-Epoque.com
 
We have used a commission plus hourly rate for years and haven't had the problems cited. On the heels of a very successful holiday season, I'm sure that every designer is tickled pink with the commission program.

We do find with the additional incentive available, we find out who truly enjoys selling very quickly. And that is a very important quality in salespeople
 
A cautionary tale about commissioned employees: Many years ago, when I was an employee, I worked side-by-side with a girl we called "Cheerful Mary." This girl had previously been doing commissioned design work at another frame shop, and even though she was no longer on commission, she had that mindset. She tried to befriend all of the customers, with little questions and comments. "My, what a lovely ring, may I see it?" "Oh, what a darling little boy! How old is he?" These were not too bad, but one day I heard her say, "My, you certainly are short!" She was desperate to make these personal comments to everyone and I was just waiting for an overweight customer to come in.

I do not shop in stores clerked by this type of shark. It gives me the willies to be around insincere salespeople. They are in the same class as telemarketers. You know, the ones who keep using your name all the time.

Just my 2 cents....
 
<BLOCKQUOTE>quote:</font><HR>Originally posted by Framar:
She tried to befriend all of the customers, with little questions and comments.
<HR></BLOCKQUOTE>

But in the South, that's the way we talk!! I had a friend from "up North" tell me once, "You have a good technique", when I didn't understand what he was talking about he said, "You know the 'good ole boy' routine". We're always saying things like "Do you know so and so that lives near where you do?" or "You wouldn't be related to so and so would you?"

My friend called it "establishing a relationship" we call it Southern manners!

But back to the subject, I agree that total commission would create sharks! Just like car salesmen!

Betty
 
We had a total commissioned art consultant working for us. She made a contact for a home show opportunity, then thought she should get a cut of everyone that walked through the door who even mentioned the home show. We changed our policies and she went away.

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Timberwoman
AL
I cut the mat, I pet the =^..^= cat.
Dahl Fine Art & Frame Design
Shapahl Fine Art
 
I prefer goal oriented plans to commission.

The basic reason for either structure is money. More for the individual and more for the business.

A goal oriented plan has the potential to make more money for everyone than a commission based structure. Everyone participates, not just the designers. Usually there are several issues that could be improved in any business. If the issue can be charted or graphed, consider the issue in the plan. As mentioned by other grumblers, commission has the potential to cause considerable hostility. This plan encourages teamwork because designers can work together to help each other develop their sales and design skills without feeling guilty when “sharing” the more difficult customers. An element can be included so that managers use their skills to increase business, etc.

Though it can sound like an accounting nightmare, the whole plan can be as simple as a few charts on the wall that are updated monthly so that everyone can see & calculate their year to date bonus.

I have participated in a similar plan that worked well for every participant and would love to use it myself, when we do add employees to the payroll. I realize that this is a rough outline that can be fine-tuned and I hope that the experiences & knowledge of others can help tweak the formulas or blow it all to **** if the plan is unrealistic or just cannot work.

Rick Bergeron - CPFcm
Coeur d'Alene, ID


[This message has been edited by Frugal Framer (edited December 30, 2001).]
 
I, too, don't like pushy salespeople; the ones we have referred to as circling sharks. But I would suggest for each of those cases, you'll find many cases of great salespeople that earn commission. Look at the great sales reps that come to your store. Look at the great sales teams at places like Nordstrom's. There are plenty of good examples of how the system works well. Go buy a luxury car-then compare that sales approach to an economy car.

So maybe the challenge isn't to throw out the baby with the water, but to emulate those great programs that achieve the goal we all want; both as owners and customers.

Behind every great salesperson is a great sales manager. And behind every lousy salesperson(and we've all seen them) is either a lousy sales manager or one that is doing a lousy job. Nobody is good at everything (unless, of course, you own a frame shop and are the only employee).So we have to find those people best suited to do their jobs most effectively. Like Mike, some of us have experience in this area. If you,as a manager, tolerate predatory salespeople or those that fight over commissions, then you have created your own mess. If, on the other hand, you lead and encourage your sales staff to follow the path that represents your store, you will be fine. It's all about style and management. But it is unfair to condemn another time honored system in retailing because of some bad examples. I've had lousy teachers, seen lousy doctors, and had lousy salespeople. Let's face it-Lousy is lousy.

So find a system that works well in your store, one that represents your philosophy and style. And that can include a no commission policy. But remeber, great sales people respond to incentives-it makes them what they are. Great incentives make even greater salespeople. Lousy systems and lousy management create lousy salespeople.

To answer the initial question about 20% is do the numbers work? Can you make what you need paying that much? How much sales will need to be created for this program to do what you need and pay the salesperson a very good living? Is that level of sales attainable? You should pay as much as it takes to create the sales to support the payroll. How much is that? Every case is different, do the math. I've just never known of a rate that high, but it might work for you. But if you're guessing for a figure to pay, you need to do a lot more homework.
 
One additional piece to thispuzzle, I believe, is examples on the walls.

We have several glass examples, all 10 x 25 or so framed pieces. the first example shows the difference between NG and Conservation PerfectVue: NG is greenish in hue and fuzzy under five mats, the Perfect Vue side is not greenish in cast and the image is clear.

The other glass example, same size, is a white and gray/white image where we exhibit Cons Clear vs Cons Ultraclear. Obviously, theUltraclear has no greenish cast at all.

Most of our framed art has one or more fillets and most have Moorman or the like mats.

It then becomes relatively easy to sell up on the glasses since the customer can see the effectof Ultraclear on a light colored piece, or the differences in NG between regular conservationNG and Perfect Vue. It;s also easier to sell fabric mats and fillets if that's all your customer sees when they come in the door.

As Bob intimates, we're selling cadillacs and Jaguars, not Fords and Chevies. I'll leave that to Michael's or JoAnn's

So we have the examples inplace, the glass exhibits out, and it then becomes easier for our sales folk to sell up in thehigher end price ranges.

It's not shark-selling or whatever you'd like to call it. It's turning a $25 poster into a true work of art, or "furniture foryour walls"



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Michael LeCompte CPF
The Great Frame Up
 
At my last framing job, people usually assumed I worked for commission...one lady, as soon as she walked up, made a snide remark that "I know you work for a commission so it's your JOB to sell me the most expensive stuff, but I'd like to know your REAL opinion about what would look best."

I remember just staring at her; I couldn't believe anyone could be so rude, but it does make sense that the person recommending the big, chunky mouldings and wide mats would have a personal stake in it. I didn't work for commission; I just naturally gravitated towards the finer mouldings because they looked better. *chuckle* I was going broke either way.
wink.gif


And now I bartend again, and i pretty much work for "commission" all day long. *grin* No one's ever accused me of pushing expensive liquor or being overly-friendly just to get a bigger tip; I like talking to people and I make good money at it, period. I think a salesperson who is pushy would be so either way; if it's not for a commission, it'd be for brownie-points with the owner or manager.

A good salesperson reads their customer; I went to Dillard's before Christmas to buy Rick some pajamas, and I found some on sale. An older gentleman helped me, showed me where the sales racks were, and escorted me to the register; the commission on the $30 I spent can't have been much, but he was as courteous and helpful as if I'd spent a thousand.

So I think a commissioned salesperson would work if they were the right kind of person, but I can see Meghan's point about sharking.

And now I've said all this just to realize that I'm of two minds on the subject myself.....*sigh*


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I don't care what color your sofa is.
 
I pay a good salary then a small percentage of the gross sales of the entire store. This gives my entire staff, of one person, the incentive to be concerned about EVERYTHING that goes on in the store. It seems to work perfectly, she is very involved in all phases of the business. Her bonus varies monthly depending on sales.

When I worked for Aaron Brothers many years ago, Len Aaron paid me the same way. He paid a generous base salary plus I was paid a percentage of every store I ran, no games, no quotas, no nothing. If business was good, I made a LOT of money, if it was bad, so was my monthly bonus check. It worked well for Aaron Brothers then, & it works well for me now.

John
 
On occasion there are hard choices to be made. Such as, do I wait on the customer with her needlepoint who is upset with the $20.00 quote I just gave her or talk to the person admiring the $10,000 original on the wall. We have to make the best of the resources available. Whether it is time, money or other, people with discretionary income to spend want to be treated well. If it takes a commission to motivate employees to this level of service and choices then perhaps it should be considered.

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Timberwoman
AL
I cut the mat, I pet the =^..^= cat.
Dahl Fine Art & Frame Design
Shapahl Fine Art
 
Hi Paulette-I really agree with you on the need for incentive. But I'll bet the ranch that you will be taken to task for suggesting that we need to do exactly as you suggested-spending your time on those sales more productive than the $20 quote.

And that, boys and girls, separates this group as much as any issue. As you indicate, sometimes the hard decisions need to be considered. But we tend to meet with unbelievable resistance such basic tenets of business; that somehow our business will suffer for trying to treat it as a business.

It can be hours of operation,it can be discounts, it can be in this case commissions. But you can bet that someone will tell you not only is wrong for them, but that it is wrong for you, too.

I think your counsel is wise-consider commission based incentives. That and a whole host of other things that might improve your business. Not everything will work for everyone, but doggone it, a lot of things work for a lot of business. We ought not be so fearful of other options.

Why is our trade so exempt from so many things that are time honored business practices?
 
Why is our trade so exempt from so many things that are time honored business practices?[/B][/QUOTE]


Bob

I have being pondering some or most of the suggestions I have found on TG all of which I like to a greater or less degree (there has been only one subject on TG that I have voiced a major difference from the majority) and I'm also a great follower of other businesses and their ideas, in Ireland the picture framing business is so small that it could not be used to form a sound business platform for ideas. it must borrow from other businesses.

One thing which I would love to hear views on is what to me seems to be how two distinct operations are merged as one, custom framing is a build to order operation and gallery sales are a finished product sale ie. off the shelf ready to go, this is how Dell computers build to order business model differs from all the other computer sellers, the other business operations have pre-built products you just select the various finished options, Dell will truly build to order, now who is winning in the computer business.

My own view is that if the framing part of the operation is not kept separate from the gallery, not necessarily at separate locations though both should be treated as separate BU (Business Unit's) the long term consequences will be that an owner/manager will have grave difficulty operating either parts of the business or making the sort of decisions that may need to be made.

I know that some framing/gallery business seem to have some sort of divide though this appears to me to be more a notional separation rather than a true BU separation.



[This message has been edited by Dermot (edited January 01, 2002).]
 
Thanks to all for your well thought out responses.

I too, dislike the shark like frenzy of high pressure sales people. I wonder how many great sales people are on commission. It's only the aggressive ones that we think of as being on commission.

As to hostility between co-workers, I don't see this as being a problem. My concept is to open multiple smaller design galleries around the city, with 1-2 designers each.
I feel that too large of a sales staff and to low of a percentage requiring them to make every last sale may contribute to the high pressure.


As to the 20% number I based that on $500 sale per day for the opening year. I can make my numbers work with this and even less if that is what comes thru the door, but as we all know that $500 can range from 5 jobs or just half of a job.
I strongly belive that framers in general are severely under paid, but in the typical frame shop model there isn't enough to pay them much more than a poverty level wage. I am trying to establish a way to let my staff grow as the business grows. Maybe hourly plus a percentage is a better way? as I said I'm just considering this concept.




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Diver Dave
 
<BLOCKQUOTE>quote:</font><HR>Originally posted by tnframer408:

As Bob intimates, we're selling cadillacs and Jaguars, not Fords and Chevies.
<HR></BLOCKQUOTE>

Well Mike, I like to think that I sell 4 wheel drive Dodge Rams, Ford Excursions, and GMC Surburbans! Not quite "Escorts" or "Fiestas" (although I have a way to sell those, too) I think there is a great market for the mid-to upper end of framing as well. Although I admit that my average ticket price has grown as fast as my personal growth. So I guess, just give me time.

Betty
 
Hi Dave-You are right on the money about most framers earning underpaid, poverty wages. The surveys bear that out.

But there is only one real reason this problems exist. That's because most owners don't earn enough profit to be able to pay more than they do. This ain't no robber baron industry.

Having said that (and if anybody thinks most owners are wallowing in cash, please tell me who they are. I'm flying there tomorrow to learn how they do it), why is there so much resistance to learning how to be better businesspeople. It truly pains me to see so many on this forum go out of their way to fight to the death common practices. We see more lines drawn in the sand over the stupidest things. I'll never understand it. Things that are fundamental to entrepreneurs are looked upon as sacrilege to framers. Why?

But if there ever was a perfect example of trickle down economics, it's pay scales. If you can't afford to pay your help much more than present,you're not going to do it. But if you can, most probably will.

It starts with profit. And profit comes from sales. And at $500 a day, you just can't generate much profit. I would really look first at maybe a much better location that can produce more than $500/day. It really opens so many more opportunities. Location is the single most important factor you need to determine. If you have a great location producing great volume, finding and keeping great salespeople will be so much easier. Set you sights higher. I promise it will pay great dividends.
 
<BLOCKQUOTE>quote:</font><HR>Originally posted by Bob Carter:


...why is there so much resistance to learning how to be better businesspeople. It truly pains me to see so many on this forum go out of their way to fight to the death common practices. We see more lines drawn in the sand over the stupidest things. I'll never understand it. Things that are fundamental to entrepreneurs are looked upon as sacrilege to framers. Why?
<HR></BLOCKQUOTE>

Just an aside here, Bob...
Ever since I signed on to this forum and read the advice of the business heads(like you) here, I have slowly but dramatically changed many of my business practices. The result of which has been a bit less volume but (not surprisingly) more gross and net income! So not all of us are resistant.
And sometime next year (next week?) I may address the "whys" of it all.
Happy new year!
Edie the fg
 
<BLOCKQUOTE>quote:</font><HR>Originally posted by Framing Goddess:
I have slowly but dramatically changed many of my business practices.
<HR></BLOCKQUOTE>

Yeah, sumpthin is rubbin' off on us. What is it and why?

Tell us FG.

Betty
 
Bob,

We might kick and scream and complain and we might even make fun of you for your fanaticism, but we're listening, and I'll bet quite a few of us are making slow but steady changes in the way we conduct our businesses. Keep the faith. Be patient, and don't give up. Your views are frequently unpopular, sometimes annoying but very often thought-provoking. I can promise you that Bob Carter will influence my business plan for 2002. Happy New Year!

(And if anybody just has to know why I'm posting to TG on New Years Eve - and my birthday - you'll just have to visit Warped.)

Ron
 
Bob,
What Ron said. Your influence may be subliminal but I am seeing results. I am much more conscious of the business aspect of the business and at the end of the year, despite a less than stellar retail holiday season, the numbers are up. Not much difference in the gross vs. 2000 but the net is up nicely, thank you. Perhaps this year will see even more changes.
Don't get too frustrated with us, remember, you have chosen a bunch of old dogs to teach tricks. Thank you for sticking with us. You are making a difference to the industry even if it is one framer at a time.

Wally
 
Bob,
The $500 a day number is a very conservitive base only. If I can make the numbers work at this level they look great at a higher average.

My wife just told me to get off the computer and back to work
smile.gif


thanks for all your input

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Diver Dave
 
Hi Wally-Thanks for the kind words. But I have to say I'm really not frustrated by some of the issues that some folks won't embrace. Mystified, absolutely. Frustrated-no way.

I think people go into business for two main reasons: First, they don't want anyone how to tell them to do anything. Second, they feel they have a better opportunity to make more money than if an employee. And for a lot of us, a combination of the two. But they aren't mutually exclusive, rather,symbiotic.

So, I realize that it isn't the age of the dog; it's how smart the dog is. We had a wonderful old dog that would run into a clear glass sliding door everytime we came home. Never figured that the door was closed. We were never going to teach that old dog not to run into the door. At first, maybe a little frustration, but it turned into humor. We even put a large taped X about eyeball height-didn't help. Once we realized he wasn't going to break the door or hurt himself, we would just sit back and enjoy the show.

And so it is with some of the old dogs here.

You know me well enough to know that I say what I mean, and mean what I say. That won't stop,nor will my contributions until March. I made a promise to my mentor to get involved and share the wonderful gift that he, and many others, provided to me. That will be a year (our agreement), but I still will be around, but on a much more limited basis.

I do get satisfaction from the private emails I get from people that feel they learned from my sharing. It is a great tribute to the people that taught me that I try and do the same.

But, some old dogs...Well, it's just better to sit back and watch the show.

See you in Vegas? If you're coming a jar of Datil sauce would put a gigantic smile on my wife's face.
 
This is an old thread, but am interested in hearing updates on the topic of base salary and commissions.

Does/did it work for you?

What did you find were the pitfalls or positive aspects?

At what levels did you set the base salary (based on experience, job market)?

How did you determine your percentage of commission if you had no sales to backup your decision for the area? (i.e. new location)

Did you have different levels for different employees? (less than a year of employ, year 1, year 2)

Did you have employment contracts versus employment at will?


Would really like some good feedback to update this thread

Thanks

Elaine
 
I think that there are several good points here already made. I have sold advertising in my past life and now I sell framing, as well as being an artist and a framer. I think most of the "sharks" are born by 1) straight commission - my husband sells furniture and I have to rope him in a bit every now and then in the frame shop 2) pressure from sales managers to meet goals.

I don't enjoy selling. But I found that when I earned my living that way I was successful because I gave great customer service, was honest with my customers and never suggested anything that I didn't think would work for them. That way I had a better chance of getting them back. I always went for the long term, rather than the short term.

There are many many styles of selling, and yet, many of us go immediately to the stereotype image of the used car salesperson, someone who will tell you anything to get the sale. In our business we are looking for repeat customers and that style of selling probably won't get them coming back.

We sell home decor items in our store. We try to greet everyone. My employees are instructed to never ask "Can I help you?" How many people here have ever said "yes" to that question. Doesn't happen very often. I tell everyone (and I try myself) to start a conversation. It doesn't have to be insincere. It can be about the weather, their child that is with them, whatever. They'll usually be looking at something while they are talking and you can steer the conversation around to what they are looking for. Many times this will result in a special order of a photo frame or something from the print catalogs. Most people are looking for something! This works.It will rapidly become very clear if the customer really wants you to go away!

I have one framer who worked on commission in a previouos shop. She was paid 5% on orders over $1000. This was a very high end shop where there were many orders in that price range. This woman far outsells anything I would suggest. She does a great job with the designs, there is almost always a cloth mat involved, a large molding and usually a fillet. I plan on making a commission plan for her so that I can keep her. I was thinking of 3% on orders over $500.

As an artist, who attempted to make a living from my art, I tried to observe what other artists were doing to successfully sell their work. My observation was that it had way more to do with Marketing than quality or type of art. When quality, marketing and sales and good service all came together, the artists were VERY successful. This is what I am trying to accomplish in my shop.

Jacqueline
 
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