Month: August 2022 (page 1 of 1)

Are you having a FALL SALE?

I’m personally not a big fan of price promotions for handmade products, for various reasons.

Firstly, discounting sends out a certain message about your products: I’ve got left over stock, it’s piled high, it’s all about the new season, this isn’t “the thing” any more.

Secondly, it hacks away at your profit margin, which may be slimmer than you would like to start with.

Thirdly, it sets a dangerous precedent – we have all been conditioned by retailers, and in particular online retailers, to wait for the next price promotion: there will always be another 15% off and free delivery around the corner, so why buy today?

Fourthly, you are hopefully working hard to demonstrate to your customers why a handmade product is worth a premium.  We know you can’t compete on price with mass produced products, so you have to have a really strong added value proposition: your products are better, and therefore worth more, because of the detail, the quality, the uniqueness, and the heart and soul that you poured lovingly into their design and manufacture.  That is why they are worth a premium, and your real customers will appreciate that.

So, for those reasons, I don’t recommend you build discounting and MASSIVE SUMMER MADNESS sales into your business strategy.  (You weren’t going to, were you, I needn’t have worried.)

However, you are competing in the real world, against companies who do discount, in a market when it’s not easy to get people to part with their money, and you have a living to make.  So what to do?

If you have stock that is ageing, seasonal, or failing to move for another reason, you may have to consider putting it on sale.  Now might be a good time.  People do love a bargain, and there is no doubt that discounting does stimulate sales.  Stock that has been hanging around for months or even years is not good for your cash flow or your energy, so a cheeky discount may get things moving again.

On the subject of cash flow, this can be another good reason to hold a sale: if you can see funds starting to dry up, and are worrying where you will find the cash for the next month’s bills, emergency measures may be required.  You may have to park your pride and profit predictions for a short while and use a sale to avert a cash crisis.

Don’t just hold a sale because everyone else is doing it.  If you are happy with the level of business you are generating, then fine.  But if you do feel under pressure financially, you can still hold a sale without losing your dignity or damaging your brand. All in the best possible taste.

Avoid falling into furniture warehouse speak: “MUST END SOON” and “PRICES SLASHED” are probably not on-brand, so make sure you communicate your sale to your customers in your usual tone of voice.

Think of clever ways to promote your discounts – perhaps you only offer them to your top customers as a thank you, thereby keeping them exclusive and creating goodwill among your most valuable audience.  Rather than applying blanket discounts to everything, create some promotional bundles: three cushions for the price of two, or buy a necklace and get free earrings.   These offers add value for your customers without feeling cheap.

Consider partnering with a magazine or blog to create a reader offer.  Again, this gives an element of exclusivity, and can also promote your sale to a wider audience.

Finally, give people a clear timeframe for the offer.  They need to know it’s not open ended.  In other words: “MASSIVE SUMMER MADNESS MUST END SOON!”.

If you are running a sale, please feel free to post a link to your site in the comments box below.  We will be covering pricing and selling in more detail on the Create a Craft Business e-Workshop, which starts 8th September.

How to inject new life into your craft business | Maggie Mumford

It’s very likely that the energy you put into your business will ebb and flow over time, especially if it has been set up for the very purpose of providing balance, security and flexibility to your life.  Nothing compares to the heady start-up phase, where you fall dizzily in love with your new venture, and pour an unreasonable amount of passion and time into making your dreams a reality.

But what happens later on, when the honeymoon period is over and you find your personal circumstances have changed: perhaps a baby comes along, you suffer a divorce or illness, or find yourself relocating?  Luckily, by nature small, creative businesses are relatively easy to scale up or down (I know, I did it when my second baby came along and I was juggling two under 2s whilst trying to cope with health complications that left me feeling drained).

When your situation shifts again, as it will, and you find yourself ready to breathe new life into your work, how do you do this?

maggie mumford dog tiles

Dogs by Maggie Mumford

maggie mumfordI spoke with Maggie Mumford, a talented artist who specializes in creating bespoke tiles and ceramics that feature her appealing designs.  Maggie is facing this challenge right now, and has kindly shared her thoughts with us.

Maggie, you are refocusing on your business following a break – can you tell me a bit about that?

My business was pretty well established after 7 years, then I took some time out to be with my daughter, which turned out to be longer than I expected I would need. I was happy to take on work that came my way during this time, but without any proactive marketing, this obviously declined, and has left me feeling that I need to build things up all over again.

So what do you feel are the biggest challenges you are facing now?

Getting my name out there again; people forget so quickly!  Also, fitting everything in with reduced working hours; I can’t work the hours I did before, so I am going to have to brush up my time management considerably!

What can you do to address these challenges?  Do you know how and where to get help?

I have just taken somebody on part time to help me with PR, so she has been contacting the home magazines to get editorial again. I am also starting to do some advertising.

My daughter can spend some time in school clubs and day camps during the holidays, but I am also trying to keep the balance of spending time with her too.  A universal problem for working mothers I expect.

I try to have a clear structure to my day – first thing after drop off and dog walk I check my emails and Facebook and then go straight into the studio. I have to be really disciplined and get in there for Woman’s Hour or I lose valuable painting time. If I start looking at “new pins you may be interested in” I’m doomed.

maggie mumford love and kisses tiles

Love & Kisses by Maggie Mumford

Hopefully the advertising should not only attract new clients, but help you leverage editorial with those magazines too.  And yes, I don’t think there is a solution to the working mum’s dilemma, so I try not to waste too much time searching for one!  We all muddle through in the best way we can!

Have you set some goals for where would you like to be by the end of this year, and next year?

By the end of the year I would like to be somewhere near where I used to be with my workload but that may be a little ambitious. By the end of next year I definitely want that and more. I really miss juggling different projects and coming up with designs for bespoke clients, it feeds my creativity.

What are you most afraid of and is there anything you putting off doing?

I’m afraid that all of the above may not happen – I think I have lost a bit of confidence. I’m not putting off much – it’s all systems go!

Glad to hear you are feeling the fear and doing it anyway! Sounds like you are pretty fired up, which tells me this is the right time for you to be scaling things back up. What excites you most about the future of your business?

I’m excited about my new website – the designer was brilliant and I think he has done a great job. Also, I’m really enjoying the new designs that I have been working on. I have finally embraced Facebook and Pinterest and that has been a revelation, I’m surprised at how much I enjoy them.  I’m happy and optimistic about the future and looking forward to “achieving” again and having a healthy bank balance.

Finally, what one small thing could you do today to make a difference to your business?

I could (will!) chase up the emails that I sent out last week and haven’t had replies for. Not much, but 1% everyday…

I think that’s more than 1%! Thank you so much for sharing your honest thoughts which I’m sure many readers will relate to and feel inspired by. I have no doubt that you will see things gather momentum quicker than you are expecting!

maggie mumford mugs and jugsVisit Maggie’s Website and see her beautiful handmade tiles here:

Muddling your Models

This week I have been working with a designer on her business model.  You have a business model too – even if you don’t realise it – but it it the best model for you?

There is more than one way to structure how you do business, and reach your customers, and what suits you won’t suit the next person.  Your model will depend on how much you need to earn, how much time you can commit to your business, whether you want to employ people and so on.  And it will evolve over time.

I thought it might be useful to give you some examples of different business models, and some of the pros and cons of each model.  Hopefully you may recognise your own model, and be able to account for its strengths and weaknesses.  If you are using a combination of models, are these complimentary, or conflicting?

Let me know what you think!

Model How it works Pros & Cons
Wholesale I sell my necklaces to shops, for a wholesale price.  I sell my necklaces to the shops for $10 each, and the shop retails them at $25 each, so I make $10 per necklace. This model is based on getting high volumes of sales, for a lower price per item. 

I don’t have big marketing costs trying to attract lots of individual customers, and I don’t have the overheads of my own shop.

My own website I sell a range of necklaces online through my own website. 

I sell each necklace for $25, so make more per item.

I have to spend time marketing my website to attract customers, but I get to keep a larger chuck of the profit on each item. 

I keep the range I produce quite small, so that I can buy the materials in bigger volumes, and get bigger discounts on them.

Bespoke Orders I create one-off, unique pieces for customers that I meet face-to-face in my studio. 

I charge $100+ for a necklace.

I get to work closely with my customers which I love.  I spend a lot of time with each customer, liaising, sending designs and sample materials.  I have to charge much higher prices to cover these costs.
Paying Commission I sell through Etsy, Folksy, or galleries, who take a commission on my work. The retailer takes between 20-60% of my sale price, but they do the marketing to attract the customers, and I can reach a wider audience this way.
Fairs & Exhibitions I exhibit at a range of craft fairs and exhibitions that attract my target customers. These events are a valuable way to attract new customers, giving them an opportunity to see my work. I can use these events to bring my brand to life.  The overheads can be high, and I have to give up a weekend, but I benefit from impulse buyers, and I collect names and addresses for my database.
A combination of the above I sell wholesale, and through my own website. I also do the odd exhibition at key times like Christmas. I have to be really careful to keep my pricing consistent across all these channels, and make sure I have built enough margin in to make a profit at wholesale and retail prices.  I benefit from a wide customer base and increased sales opportunities.