Using the "80/20" Principle to manage your fine art / decor print sales

An Inkjet NEWS & TIPS article by Royce Bair for 2006 Oct 19

 

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. Pareto observed that 80% of income in Italy was received by 20% of the Italian population. Other economist and management thinkers have written about this principle or rule. One of the latest to write on this principle is the author of the international best selling book "The 80/20 Principle - The secret of achieving more with less," by Richard Koch

For artists, this principle might best help them if they were to discover that 20% of clients are often responsible for about 80% of their sales volume, or that 20% of their images often produced about 80% of their sales. Identify those top clients or their top images (or both) could significantly boost their sales; or it could help them maintain their present income with less stress in their lives.

This 80/20 principle can be taken even further, with the wider phenomenon of "Pareto distributions." If the parameters in the Pareto distribution are correctly chosen, then one would not only have 80% of the sales coming from 20% of the images, but also 80% of that top 80% of sales coming from 20% of that top 20% of images. This implies a "64/4" rule (80% of 80% is 64%; 20% of 20% is 4%), where as much as 64% of one's sales could come from only 4% of one's images -- very similar to what happened in the above story of my photographer friend who chose to market only four of his top images. Yes, he lost some potential sales (going from 80% of his potential down to 64%), but he lessened his inventory and stress considerably (going from 20% to only 4%).

I use this principle in my "BessiePease.com" business. I have a license from The Flavia Company, who owns the trademark on Bessie Pease Gutmann, to be the exclusive Internet seller of giclee reproductions of this popular deceased artist. In her lifetime, Bessie painted over 600 illustration, mainly of children. The Flavia Company has about 330 scans from these illustrations. Most of these scans have major problems, because the originals from which they were copied have damage, fading or other deterioration. To restore each image to what our staff feels was worthy of the original painting can sometimes take a whole day of digital editing in Photoshop.

For this reason, we have chosen only 100 images to restore and feature on our Web site. We typically have about five pre-printed copies of each featured image in inventory. The other 230 images can be special ordered at a custom print price that is about three times what a featured image would cost.

Presently, there are four images that sell better than any of the other featured images. In fact, these four images make up more than 60% of our sales. (Sound familiar?) We have plans to increase our sales through dealer or reseller program. This program would require us to put together a huge inventory of giclee prints into circulation for our resellers. To reduce this inventory overhead, we've decide to concentrate mainly on the four images that currently make up over 60% of our sales.


NOTE: The above article may have links to Inkjetart.com web pages when referring to certain inkjet products. While InkjetBuzz.com is NOT associated with Inkjetart.com, many of the articles found in this section originated from Inkjetart.com news letters, which were written by Royce Bair, a private consultant.

 

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