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, Notonthehighstreet.com 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.

 

Making your own headband is easier than you think. I promise. I know from experience. You’ll especially love that this is a no-sew headband tutorial which means anyone can do it in a matter of minutes!

Supplies:

  • a plain plastic headband
  • hot glue
  • scissors
  • stretch velvet fabric or any other fabric
  • twine or string
  • Fabri-Tac glue
  • Ribbon

Instructions:

  1. Cut three pieces of fabric to 24 inches x 4 inches
  2. Apply a bead of fabric glue along the right side edge of the fabric as shown
  3. Fold the fabric together, repeat this for all pieces
  4. Once the glue is dry, turn the fabric tube inside out
  5. Stack the three pieces of fabric and tie together with string
  6. Loosely braid the fabric and tie off at the other end
  7. Use hot glue to secure the braided fabric to the headband
  8. Use hot glue and ribbon to finish off the end

What is the Gardening Cycle?

Photo of beautiful young girl posing between flowers in a greenhouse. Lifestyle

Plants can live from a few days to months depending upon their type but they go through distinct stages of changes as they grow, just as animals and humans do. The basic stages that plants go through starts from seed to sprout, then gradually  through vegetative stage, budding stage, flowering stage, and finally the stage… Continue reading What is the Gardening Cycle?

You creative types can be a dithery lot.  Many of the people who eventually join the Create a Craft Business e-Workshop have been thinking about it for months in advance.  In case you like the look but aren’t quite ready to take the plunge, here are 7 good reasons to book your place today.  It’s not a hard sell, I’m just very excited because I know you are going to love it!

1. If you book before midnight tomorrow, Thursday 26th June, you save $20 right away! Loving those savvy business skills already.

2. You take part from your desk, (or sofa, or bed, I won’t judge) and it fits around your other commitments like a day job, or children.  We know all about the juggle.

3. You are investing the equivalent of $43.75 per week, in you and your skills and let’s face it, you are kind of the most important bit in this business.

4. It’s a fiercely competitive market out there.  This course will show you the secrets you need to know to lead the pack, not follow.

5. You’ll get an amazing new support system.  If you’ve stalled, hit a wall, are having a wobble, lost your mojo… you need to join us.  No more flailing around on your own.

6. It’s inspirational, informative, fun, de-mystifying, and will get you all fired up.  That’s what the previous class said, anyway.

7. Business is about grabbing opportunities.  This is your opportunity to get better at what you do, and define and create your dream craft business.  I know you are going to love it.

Thinking back to when I was running my own jewelry business, one of my happiest moments was peering into a heavy glass & polished wood display cabinet in the fashion accessories department of Liberty of London, and seeing my jewelry designs twinkling back at me.  It wasn’t easy getting it there: it took approximately 18 months of cold-calling the buyer (a challenge in itself, as her answer machine was perma-on and perma-full) until I got an appointment, and I often think how different things would have been if I had given up after 3 months? 6 months? A year? (A valuable lesson in perseverance).

That was back in 2007, but nowadays there is a way to get in front of a buyer at Liberty that requires less terrier-like-tenacity.  It’s called The Liberty Best of British Design Open Call and takes place every January.

It’s designed to discover and support new and emerging design talent, and having pre-registered, designers queue around the block to spend a few minutes presenting their products to some of the most influential buyers and industry experts in the UK.  The lucky few will go on to receive orders and see their products appear in store.

Kirsten HendrichJewelry designer Kirsten Hendrich was at the 2014 Open Call a few weeks ago, and has kindly agreed to share her experiences with us here.  If “selling to a department store” is on your list of things to do this year, I hope you will find her honest insights, clear sense of focus and enviable pragmatism as inspiring as I do.

Hi Kirsten, thanks for talking to me.  Can you tell me a bit about your work, and where you currently sell it?

Elodea Pendant

Elodea Pendant

I specialize in making handmade jewelry in silver, gold and platinum, inspired by natural forms such as pondweed, dandelions and tree bark.   At the moment I am focusing on selling at craft and trade shows such as Desire, which is based in Winchester, and also at RHS Wisley in Surrey. I also sell through my own website kirstenhendrich.com.

Going forward, I would like develop my list of stockists and begin to really get my work out there in trusted galleries and shops over the course of 2014. I will be attending the British Craft Trade Fair in April, so I hope to meet potential stockists there.

So how did you hear about the Liberty Open Call and what made you decide to apply?

I heard about the Liberty Open Call event through Facebook. I had seen on Facebook and Twitter that a few other makers had attended the Open Call event in 2013, and decided that it was something worth pursuing.  It seemed accessible to all and although I was a bit intimidated, I felt it was worth attending. Liberty also announces Open Call events on their social media networks so you can easily find out when they are next scheduled.

I decided to take the leap and register for the Open Call event in January 2014, mainly because of the well renowned reputation of Liberty. I visit Liberty often and love to explore the jewelry section. They stock a lot of jewelers I admire such as Alex Monroe and Monica Vinader and I can only dream of one day seeing my own designs within the historic walls of Liberty.

While I had no expectation to be accepted within the Open Call process through to the next stage of selection, I thought if anything it would be a great opportunity to meet professional buyers. Their buying team travels the world meeting a wide range of designers, so I felt their experience and knowledge could lead to some very valuable advice, and that they might be able to give me a few pointers or suggest ways in which to develop my collections or brand. I have never met with buyers before, so I was attending for the experience – the concept of pitching, speaking to professional buyers, and presenting my work in a formal manner, it’s a great opportunity to practice!

What was the process before you went – did Liberty give you much information on how to prepare?

Liberty publishes a section on their website about the Open Call event each year. It allows you to register for the next event and provides a short paragraph about the event itself. There is also a video which gives you an insight into the process on the day. I had no idea how formal the event would be; how I should present my designs and even what to wear. I was nervous about entering such a prestigious establishment and coming across as a complete beginner and harming my brand image, but the video really helped calm my nerves and helped me prepare.

So, once you were calm (!) how did you prepare and what did you take with you?

Billowing Dandelion Seed Pendant

Billowing Dandelion Seed Pendant

Beforehand I Googled to see if other makers had been to the event and written about their experiences. I found a few designers had given an insight into what occurred on the day. I also received an email from Liberty after I registered, with a simple list of questions I might be asked (about pricing, delivery times, target customers and so on.)  I decided to have all the information ready in mind to answer any questions, but I steered away from a formal pitch. I prepared one of each of my designs and price sheets giving the retail and wholesale prices of each design ready to pass onto the buyers.

Did you have a clear idea what outcome were you hoping for?

Realistically I really wanted feedback and someone with professional buying knowledge to steer me in the right direction and give me some advice: Was there something missing? Did I have enough within each collection? Did my design have a commercial appeal? I generally went seeking feedback in which to work from.  I decided if I didn’t get in this year, I would simply return and try again.

All really useful stuff.  So what happened on the day?

On the day I arrived at 8.30am; I wanted to get a place in the queue early. The queue had already started to build up outside the store, but as the doors opened at the back we all moved through quite quickly. We were led up the back staircase to the top floor where shop space had been cleared.

Once the queue reached the top of the winding wooden staircase, makers were separated into two halves, fashion or homeware. I was lead to the fashion seating area. Each maker signs in with the most appropriate buyer with the help of Liberty staff to guide you.

Within the fashion area there was a wide range of designers waiting for their turn to pitch and show off their wares, from children’s clothes, jewellery, scarves, accessories, hats and fashion garments to beauty products; it was buzzing with creativity.

There was a lot of competition, but still the environment was so supportive. It was a great opportunity to meet others and everybody was wishing each other luck and calming each other’s nerves, it wasn’t cutthroat at all.

I waited for about an hour and a half until I was called through to the adjoining room ready to meet the buyers. The room was a hive of activity. I was quickly called to meet Isobel and Sarah at one of the tables. There were other makers busily pitching their designs to other buyers. It was by no means an intimidating Dragons Den type of environment.

The pitch seemed to go really fast, I unpacked my designs and gave an introduction about the business, the designs and the inspiration behind them and Sarah and Isobel asked a few questions about my target audience and price points.

Their feedback was positive. They felt my designs were well made, unique and interesting and could have a place at Liberty. They told me they would pass my details on to the head buyer. I was thrilled!

That’s fantastic, well done!  So how will you proceed from here?

I am really pleased with how the day went. Now I must chase up the head buyer to gain some feedback and hopefully arrange another meeting to show her my designs. If nothing comes of it, I will simply return next time and try again.

Thanks so much for speaking to me Kirsten, and you absolutely must let us know what happens next, we are all dying to hear how you get on.