Ask a Gallery Owner: Should I Negotiate with Customers?

After a recent online broadcast, I received the following email from an artist regarding selling art at a discount.

I do have a question about multiple piece discounts.  In addition to our base offerings of alpaca garments and farm events highlighted on our website, we create wearable art pieces (scarves, shawls, etc.) and wall hangings made by hand-felting alpaca fiber from our herd with silk, merino and other fibers/embellishments.  These items aren’t on our website as many of them are custom designs.  Prices range from $125 to $750.
We often get folks that ask for discounts if they purchase (or commission) more than one piece.  We understand the request and certainly what to “reward” loyal customers but at the same time we believe our prices start extremely fair.  As a result, we have gone back and forth as to whether or not discounts are appropriate – particularly at what point and how deep.
Do you have any thoughts you could share in this area (at what point to offer discounts and how deep to go) or any suggestions on a graceful way to say “no, I’m sorry, but we don’t”?
My Response:
This is a great question. I have found that for many of our buyers, even though they don’t need the discount to afford the work, they feel the negotiation is part of the process. You might consider bumping your prices up to allow for a little room to negotiate if you feel your margins are too tight. I feel that my ability to give a consideration (typically between 10%-20%) is the single best tool I have to increase sales volume. I have always been of the philosophy that I would rather have 80% of something than 100% of nothing.
You can try the “we’ve worked to keep our prices very reasonable so that we can keep the sales process simple for you. With this price, you can be assured that you are paying exactly the same as everyone else” etc. But you are still going to lose some sales over time, and those lost sales really hit your profit margin unless you aren’t able to keep up with demand already (in which case it’s time to raise prices anyway).
Leave your thoughts on pricing and discounting in the comments below.
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