GREAT 101 IDEA: Sell through a Dealer Network
We are used to buying tires, cars, and computers through authorized dealers. Other businesses may benefit from a similar sales model.
David Usher founded Greenwich Workshop in 1972. Usher, who died in a kayaking accident in 1997, believed direct distribution was the best way to sell high-end prints. He traveled around the United States, establishing close relationships with the owners of galleries and framing shops. His son, Scott Usher, is now running the company.
Scott Usher told me that one secret of the company's success is treating every dealer like part of the family. Howard Terpning, James Christensen, Bonnie Marris, Z. S. Liang, and Steve Hanks are some of the top artists whose paintings are turned into high-quality prints.
“The past two years have been interesting because we are selling art, which is a luxury item,” said Usher.
Ten years ago, the average price of a print was $150; now it's over $500. Most Greenwich prints are giclee prints on canvas. Greenwich dealers buy the art outright at wholesale prices (50 percent of the retail price), but they can return unsold prints for credit if it means preventing it from being sold at a discount.
“Our galleries today are beginning to offer original artwork as well,” said Usher. “The framing component is still a big part of their business. But, they are not just a frame shop.”
Usher said giving a dealer a geographical territory doesn't work anymore, especially with so many consumers buying art online.
“The concept of what an authorized dealer is, is in significant flux,” he admits. “We still depend upon it and are working on ways to enhance the opportunity for a local dealer to hang on to their customers.”
Greenwich is in the process of putting together a universal shopping cart that can be personalized for each dealership.
“The outlook is positive, a little bit of last man standing scenario,” said Usher. “We don't have a highly capitalized group of folks out there. We have lost a good number of dealers in the last two years.”
In 1998, the Seymour, Connecticut–based company was purchased in a stock deal by Hallmark. In 2002, when Hallmark planned to spin it off, Usher decided to buy back the company. He now has about 30 employees.
A successful dealer network depends on good communication and support from the home office.
Here are some ways to support the people who sell your products and services:
- Keep them well informed via weekly e-mails and by posting confidential information on a password-protected area of your web site.
- Create a monthly e-newsletter to share sales tips, success stories, and company news with your dealers.
- Limit the number of dealers you sign up in each geographic area. This honors the relationships you have and offers dealers a better shot at making more money.
- Ask veteran dealers to mentor new dealers in other areas of the country. Suggest that veteran and novice dealers schedule a phone call once a month to share information.
- Ask your dealers to tell you what you can do to make things work better. Keep the lines of communication open, and let them know you really value their opinions and suggestions.
Despite the challenges, Usher said Greenwich will continue relying on independent dealers to sell art. Several dealers I interviewed said they like working with the company and plan to continue their long-term relationships.