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To sell, or not to sell?... that is the question. For many months now, I have blabbed on about the vital importance of a crafter establishing their marketing presence in cyber-world. Simply, having an online presence helps to validate your brand to the buying marketplace. Like many businesspeople, I decided that I had to have a website in place before I began to push my wares to boutiques and galleries to help me seem like a more established business than I was at the time.
The quick and dirty? If you're serious about growing your brand and taking the leap from hobbyist to entrepreneur, you'll make sure this one significant step is completed first. It is the only surefire way to establish yourself as a professional in an already oversaturated retail market.
I just recently started to walk into stores to push my line of jewelry (www.iidesigns.com) using a technique I learned from my friend - and fellow Beehiver - Amy Leff of Throwing Stars Jewelry. Prior to my recent adventures in "store hopping" (that's another blog entry in itself, for another time), my regular modus operandi has been to email the store, insert photos to the body of the site (more on that later, too) and refer the owner of the store to my website. Presenting myself this way has afforded me great growth in this slow economy, and will most likely work for you, too.
I built my website myself. I taught myself the web building application, trial-by-fire, and am still today the editor of my site. Other crafters always inquire why I would take hours and hours to build and edit my own site. What it comes down to is that I'm a true "Do-It-Yourselfer": Having this control allows me to not have to rely on someone else to edit my work properly, and allows me to make quick changes when needed (and there are always quick changes needed on any website that is voluminous). I recognize that as I continue to grow, I'll eventually have to hire someone to maintain my site; however, knowing how to build the site myself allows me to better recognize when the person I'll eventually hire is - or is not - doing something properly. For me, the old adage "knowledge is power" is tried and true.
Although I generally make all of the decisions for my business, and normally delve out a plan of action for where I want my business to go and how I can accomplish acheiving my goals by myself, I sometimes heed the advice of others in my strive for greatness.
I relayed in previous blog entries that last February, my sister, Mari, and I attended the Buyer's Market for Philadelphia Craft, and attended the Visiting Artist's Program to learn about the in's and out's of wholesale. I still 100% endorse the program if you have no sound understanding about wholesale.... experiencing the market and seeing how vendors display their product is worth the trip in itself.
However, one point that was impressed upon me and my sister over and over again was IF YOU WANT TO COLLECT WHOLESALE ACCOUNTS, YOU CANNOT SELL ON YOUR OWN WEBSITE. This oft-repeated message was told to us by vendors, exhibitors, stores, and the teaching staff at the Visiting Artist's Program. We left the marketplace assured that this bit of advice was the pearl of knowledge that would open our doors to an entirely new world of customers through wholesale.... and so away the shopping cart went. In following that much-repeated edict at the Buyer's Market, I now fear we may have closed the door to our existing customer base, and new piece-by-piece purchasers who stumble upon our site.
A part of owning a business is conducting market research. You must look at other relatively young - and seasoned - businesses to see what these companies are doing that are working (and in some cases are not working) to their advantage. I have a few seasoned jewelry designers who have carved out career paths for themselves that allows them to identify and relate with their base customer while still selling in big-box shops that I choose to "follow." I've read books about these designers, their business models, and regularly check their sites to see if they've come upon any innovations in website design and marketing that I haven't yet considered.
I also look at relatively new designers to see what may - or may not - be working on their sites. While my site has an identity all its own, still "checking out the competition" is imperative for growth.... You have to remember that the biggest companies in teh world do the same thing: google watches microsoft, pepsi researchs coke, papa johns researches pizza hut, and on, and on, and on. Market research is a part of creating staying power for your company so when your competitor innovates, knowing what the market is responding to prevents you and your existing marketing scheme from stagnating.
In the past few months, I've done a lot of research to see if companies that I identify with as being successful sell on their websites. I was very surprised to find these companies - who all sell at the Philadelphia, New York, Las Vegas, Atlanta, and Dallas wholesale markets - also sell on their webstores.
Although my company is still in its infancy stage, and I have a LOT of growing to do, I MUST follow the steps of these larger, successful companies to be viable. Even though I'm a small company, I refuse to THINK small, and still reach for the sky. Knowing that I have a recipe for success will allow me to keep growing. Even though I'm a small company, I'm still competing with the Alexis Bittar's, David Yurman's and R.J. Graziano's of the world (all major players in my genre of craft - jewelry). At the end of the day, we all sell a product, and we're all selling it to the open marketplace, to a shared customer base, regardless of how big or small the company may be. My philosophy is that the customer may choose to spend their $100 on a well-made, handmade local piece, instead of going to Lenox Mall to shop for the day.
This summer, I am re-engaging my webstore for purchases (for my Fall/Winter collection), and will go one step further to add a gift certificate program to the site for holiday shoppers. Although I do not feel my business has suffered from going without a shopping cart for 10 months, I feel that there are everyday customers - the customers who are helping to build my business now, purchase-by-purchase, that I missed by heeding that advice. At the end of the day, the message is that as small business owners, you have to take a risk try things you would not normally to see if it works for you. If you don't, you may regret your decision in the long run, because learning from your mistakes in business is much more valuable than not doing anything at all.
Until next time, Creative People.....
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Creative People....
In my last blog entry, we discussed how to determine whether or not you (and your product) are ready to take the great leap into the wholesale market. The list of questions should have helped you to see if you have the basics down.... In this entry, we'll pick up where we left off, and will discuss pricing. Future blogs will cover store markups, wholesale "language," the proper places to purchase your products and volume control.
Pricing Your Products
A common misconception made by most designers (including me), is that "your wholesale price is 50% of your retail price." Most of us simply set our retail price based on what we think the product is worth, and then subtract 50% of that price and present it to stores.
The large error in this process is found in the way and order we choose to price our products.... instead of setting your retail price first, you must first determine your wholesale price, and then add in all of the appropriate markups to get you to your retail price. All of these markups are what is regularly referred to as a "margin." If you know how much space that exists in your margin, you can more easily establish the proper wholesale price that will still make you money, with the proper volume of stores and customers, of course.
During my time at the Philadelphia Buyer's Market Visiting Artist Program, self-taught artist and 30-year wholesale veteran Milon Townsend taught us a bit about the proper way to price your products for the wholesale market. I have to admit there were many, many, many parts my sister and I were missing.
Milon started his lecture by stating, "Pricing is the mechanism by which you retire some of the investment you have made in the work and arrange for excess income." In short, you have to make back some of the money you've invested in your business by making sure you price correctly.
So what does it take to price correctly? You must account for your:
Materials
- These are the pieces and products you purchase and put together to make your product
- Add this cost based on materials for each individual product (if you have 100 varying products, add up cost of supplies for each product)
Labor
- Labor costs include what you pay yourself, your rep, and your assistants, if any. If you don't charge yourself an hourly rate, your prices are lower than they should be. If you do not have an assistant, incorporate into your pricing your hourly rate based on what you believe a fair wage is for an assistant.
- Charge for labor when you're making your work, and selling your work
Overhead Costs
- These are expenses that are continuous, whether you're producing work or not (think heating of your studio space, lighting, and other necessary expenses). Example: If you have a studio space that's used only for your production, take the electric and heating bills from the last 12 months, divide by 12, and that's your monthly overhead cost for the space. If it takes you 10 days to produce one product in your studio, prorate your monthly overhead cost with a 10 day amount, and that's the amount you will add when pricing that single product.
Cost of Sales
- These costs include traveling for shows, food budget for shows, show fees and costs (booth fee, furniture and union labor fees, if any)
- Advertising costs (it can often cost up to $800 to get a full page ad in a trade show publication)
- What it costs to sell your items (your hourly wage, or your rep's hourly wage)
- What it costs to ship your items (if you make heavy items, such as sculpture or pottery, you may have to ship your items to the show)
Loss Rate
- This is the amount of money you will lose through necessary repair or loss of defective products (and we will all have them). For you to make money, you should not have a loss rate higher than 10%. If you calculate a loss rate of 10% (for example: for every 100 pieces you make, 10 will need to be repaired, replaced or lost to defect in production), you must add 10% to your cost of work to determine the proper sales price.
Now that you know everything that should go into making your pricepoint, the question is - How does an artist come to a sales price? The following simple formula should help you get there:
Artist Labor Fees + Cost of Materials + Overhead + Advertising Fees/Cost of sales (for that product or your line) + Loss Rate = BASE PRICE
TO GET TO YOUR FINAL PRICE, YOU MUST ADD 30%-50% TO YOUR BASE PRICE TO GET TO YOUR RETAIL SALES PRICE (most industry veterans, like Milon, add 50%). ONCE YOU GET THAT TOTAL, DIVIDE BY 50%, AND YOU HAVE YOUR WHOLESALE PRICE WITH A NICE, PADDED MARGIN OF 30%-50% TO ENSURE YOU MAKE SOME MONEY BACK.
The next obvious question - DO I HAVE TO DO THIS FORMULA FOR EACH PIECE OR DESIGN I MAKE? The short answer is YES, YES, YES. Remember, more than anything, this is a business, and you want to be sure you're making money off of your work. Because most of our production lines only vary slightly over the years with differentiation of materials and design, once you get a formula down for most of your line, your tweaking to the formula should be minimal.
Now, I know it all sounds like a lot, but it is a necessary function and part of running your new or established business. The truth is, a product is worth what the market will bear (remember when people paid $350 for "Tickle Me Elmo" a few years ago?). Although this formula may push your product price up way further than you'd like it to be (or further up than what you normally sell your product for), this is for those ready to venture into wholesale, and make money by pushing large volume through a larger base of gallery and boutique clientele.
Making a handmade product is a time-intensive, sensitive practice for most of us. In selling our product, we're selling a bit of who we are, along with a bit of our artistry, love and time that went into developing and perfecting that product. In the end, your unique, handmade product is worthy of the ultimate price.
Based on the amount of information here, feel free to contact me with any questions. In the next blog entry, we'll continue the discussion, starting with gallery/boutique markups.
Until next time, Creative People....
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In my last entry, I promised all of you that I’d tell you about the gems of information my sister and I obtained during our trip to the Visiting Artists’ Program at the Philadelphia Buyer’s Market last month.
For those of you that don’t know, the Philadelphia Buyer’s Market (Buyer's Market of American Craft) is one of the largest wholesale marketplaces for fine craftsmen (if you are a: potter, sculptor, woodworker, bagmaker, fine textile, jewelry designer, etc., this market is for you). The Visiting Artists’ Program is a series of workshops set up so artists can learn the ins-and-outs of wholesale to determine whether or not the wholesale market is appropriate for them.
The first workshop in the series was “Wholesale 101,” presented by Bruce Baker, who is an industry leader in the field of jewelry. Bruce owns a gallery with his wife, and has successfully participated in wholesale markets as a jewelry designer for over 25 years.
The workshop began with a list of questions to help determine whether or not the artist is actually ready to present work to the wholesale marketplace. You may be ready for wholesale if:
- You can make your work faster than you can sell it
- You deliver work by a specific date requested by the customer.
- You have a business background, or a partner/team that can handle the technical side of your business.
- You have an original, marketable brand that is saleable to stores and galleries.
- You keep up with the strains of your retail accounts and custom order customers.
- You live in a seasonal area, where wholesale shows can help you level out your sales for the year.
- You have easy access to materials to make your work.
On the opposite hand, you are most likely not ready for wholesale if:
- You cannot keep up with your retail demands.
- You are not making a profit from your work (operative words: wholesale is not retail minus 50%.... the formula for
determining your rate is a LOT more complicated, and will be the subject of a future blog entry)
- Your line markets only one-of-a-kind work (it limits your sales potential, and buyer’s will likely not purchase from you)
Your entry into wholesale all starts with your brand. Even if you have a fantastic product, the marketability of that product is what's going to make you money. Most of all, IT IS IMPERATIVE TO REMEMBER THAT YOUR ART/DESIGN IS A BUSINESS, AND YOU ARE IN IT TO MAKE MONEY DOING SOMETHING THAT YOU LOVE.
If you look historically at gimmicky products that sell very well (but do not necessarily work very well, or have a long working-life), it’s easy to see that a good brand can be built with a bad product (think of all of the poorly constructed items you’ve seen and have said to yourself, “I don’t know how they do so well.”). These designers most likely had a good team of people around them that helped them with press opportunities, marketing opportunities, and help them to integrate their brand into the marketplace.
On the other hand, you’ll go to a store or gallery and see a wonderfully made, quality item by an extraordinarily talented artist that does not sell well, wholesale or retail. A large part of the lack of success may be the result of the Artist's actions, directly. For example, maybe because the artist is an introvert, and does not work well in the selling arena (and like a retail craft show, you still have to sell at a wholesale show, even if the work is good enough to sell itself. You must remember, galleries and boutiques are buying a relationship with the artist as much as their purchasing the product. A bad vibe may be all it takes not to get a sale). Or, maybe the artist does not know how to properly market his or her art.... Maybe the artist overprices or underprices his or her work. All of these things, together, tells you that you must be prepared on the business end of things in order to make selling your art a success.
When you decide to go into the wholesale arena, you must be ready to break away from making all of your work yourself. Production and production costs can make or break a business. One of the first steps you must take is determining how fast you can make each product in your line. Take a calendar, and mark off how many of each product you can make on a given day. Then, when you start to sell wholesale, you can simply mark off the amount of days it will take to fulfill an order (because you will already know how long it takes you to produce your products).
Another key to having a successful wholesale business is letting go of having every item "entirely handmade" by you. Again, cost and production time is key to a successful business. Most successful wholesale artists have always used an assistant or team to help create and develop their products. On the other side, many artists choose to outsource a lot of their work, while still retaining ownership rights to the product by being the creator of the general design, and working on certain key elements of the piece. In wholesaling, your time is essential, and the longer it takes you to make a piece, the less amount of time you have to sell it…. And selling the piece is what it’s all about.
The bottom line for Part 1 - make sure you have the business aspect covered (whether by you or a team), and know your production schedule like the back of your hand. These two elements will give you a good start in the wholesale game.
In the next blog, we’ll discuss store markups, volume control, wholesale “language," where to purchase your products and how to properly price your pieces for the wholesale market.
Until next time, Creative People....
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Today my normally verbose entry is going to have to be short and sweet. However, I wanted to share with you that two weeks ago, my sister and I went to the Visiting Artist's Program at the Buyer's Craft Market in Philadelphia. It was a whirlwind trip 3-days, full of information, beautiful craft designs, and designers/artists waiting to make a buck or their big break.
From our understanding, the Buyer's Market is one of the top wholesale shows in the Northeast, and many artists go there to make a big portion of their profit for the year. As a Visiting Artist, Mari and I attended three days of seminars that included general information on wholesale, how to price your wares, creating and setting up your booth (inexpensively), how to approach galleries and boutiques, and a bevy of other information. It helped us get a little closer to making a final decision
It is said that if you walk into a lecture/seminar walking knowing 80% of the subject-matter, and the 20% you didn't know is provided to you, your money was been well-spent. I have to attest that the 20% my sister and I learned was extraordinarily valuable.
I have to say that wholesale is a whole new ballgame, and can be quite intimidating to a new designer that doesn't know how to play the game. I hope that all of the artists I saw/met at the Market had a great 4 days of sale.... However, what I saw was that it was a relatively slow market for most who were there. I was not there on Monday, and hope it picked up for all of my fellow artists.
In the next few blog entries, I will tell you about all of the things we learned, starting with how to determine whether or not wholesaling is right for you, along with the 101's of wholesale. It is a fantastic bevy of information that I sincerely hope you all stay tuned to hear. I promise it will be worth the wait.
Until next time, Creative People....
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Generally, I'm not a person you'd see base-jumping off of a building, or standing in line at the bungee-jump ride. I'm not the person who takes any "dare" that comes may way. While I think I'm GREAT, obviously, I'm not a risk-taker. My husband (the person with the highest tolerance of anyone I know) calls me downright "risk adverse." While some may call it being boring, I call it "cautious preparedness" (smile).
While my Beehive sisters are out there right now, creating booth spaces (Go Heather and Rinse Bath and Body!), and selling their wares at wholesale shows for the first time, it is a step that I'm not willing to take without copious, arduous research, first.
As a jewelry designer, I'm in a highly competitive field that is generally over-saturated with vendors. To be a success, you must have the "secrets" of how to do it just right, and a product that stands out from the rest. My sister and I are now in our second year of business, and have had great success increasing the growth and incoming revenue of our business over the past 6 months. We've done it the traditional, grass-roots way, contacting boutiques and galleries where we'd like to sell, scheduling a showing, and selling our products in their store. Along the way, we've come across a few locations that insist on wholesale, and have created wholesale relationships with them. Overall, the message we hear is the same everywhere - "once you start selling to the masses via wholesale, you'll do great."
In an effort NOT to take a step that I'll regret (I have had very few in the business, thus far, but have had my growing pains like everyone else), I'm going to continue my trend of being boring, and recently applied to take seminars at this year's Buyers Market at the Philadelphia Craft Show, one of the largest shows for jewelry and home accessories designers on the East Coast. Unlike other shows, which expect you to dive right in and take the plunge, the Buyer's Market allows for more careful designers (such as me) to experience the show from a sales floor point-of-view to determine if wholesale is right for them.
The Visiting Artist's Program allows artists to go through three days of seminars to find out about pricing, how to set up a proper booth for best sales potential, create line sheets, and have tours of the Buyer's floor and selling artists' booths. To me, this is the best way to determine whether iram-inal is ready to take the plunge, particularly in a market that is forecasted to be worse in 2009 than it was in 2008. The question... stay grass-roots, or go mainstream? Hmmmmm.....
I will be attending the three-day seminar in February, and will report back to all of you the successes and failures of the trip. Hopefully, my journey will help you determine whether it's the right step for you, too.
Until next time, Creative People....
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