Friday, June 27, 2008

Quitting your day job- Part III

If you read Part II, you should now you should be getting your financial plan in order for that long awaited day that you strike out on your own. I am going to take a break here to talk about confidence and shyness. If you are shy or suffer from a lack of confidence, start working on overcoming these fears now. Most businesses I have seen fail is because the owners suffered from shyness in one form or another.

Selling is marketing. Accept this. You will have to talk to others and you will have to convince them you know what you are talking about. Realize this now, take a deep breath, and don't give up. Start by facing your fears. Grab a sheet of paper and write down the three worst things that could happen if you called a potential customer to offer them your wares. Done? I am willing to bet that they all boil down to one word- no. No, I'm not interested. No, they aren't are style. No, they aren't the quality we prefer. No, no, no.

Yet notice, they are not saying, No, you're not good enough. All a no means is this is not the right customer, at this time. Each no brings you closer to a yes. Each no gives you hints on how to make it better next time. Each no means you were brave enough to put yourself in the position to train for those future yeses. How can something that holds so much promise be bad? (Ok, no one likes a no. Not to sound like a Pollyanna, but everything above is still true.) In our heads, the word 'no' becomes a monster. It makes nervousness at approaching a shop turn into a fate worse than death. Once you break down this irrational fear, and remember 'no' is the worst that awaits you, it becomes much easier.

Next, take power over 'no'. If someone says no, ask them if they can recommend another venue for your wares. If they say 'no' and are rude, go ahead and mumble epithets about their questionable parentage- to yourself once you are home and no one can hear. Then, call another shop, apply to another show, keep trying. Don't give your fear the time it needs to grow.Stores need artist like you or they have nothing to sell. Each time you visit a new shop to offer them your items you are doing them a favor, not the other way around.

Finally, get yourself a cheerleader. Join or start a networking group. If you are shy, steer clear of the hardcore business groups. Start small with a few like minded people that you have more than just business in common with. is a great place to find a group, or you can start your own for a small monthly fee. Also, friends and family members can be your cheerleader. Just avoid the ones who feed into your fears ("that's just awful! I don't know how you put yourself through that!"), throw you pity parties ("you poor thing. Go ahead and cry. <>"), or do the wiser person dance ("I knew this would happen, maybe you shouldn't put yourself out there like that"). The cheerleader you need has to be able to get you fired up when you want to quit. ("You're going to let that snooty gallery lady get you down? I'll drive you to that other gallery across town tomorrow, we'll show her!") They tell you when you're awesome and they tell you when you're not so great- then they help you brainstorm ways to make it great. If you throw a home party, they are there to speak up when you freeze up or at least give you a well placed kick to the shin to get your mouth moving. If you don't have that cheerleader now, be your own cheerleader. You'll find one eventually.

In Part IV on Tuesday, we will tackle business plans!
Part I
Part II

Morning Coffee 6-27

It's Friday! I am a mix of relief and nerves right now!

1. List some items.
2. Set up as much as I can for tomorrow.
3. One new marketing.
4. Get some change for the show.
5. Get drinks/ice
6. Run through everything to make sure I didn't forget anything!
7. Post up article.

I'll be back Monday to tell you how this weekend went!

Thursday, June 26, 2008

Morning Coffee 6-26

I think I can...I think I can... I think I can...

1. Wholesale meeting, yay! This was a flop. They were trying to get me to sell my pendants to them at a 75% discount! I don't think so.
2. Finish banner.Done
3. Post ad on craigslist for Saturday.Done
4. Get jewelry carded.Done
5. List some items.oops, completely forgot
6. Get tomorrows blog post done.Done

Wednesday, June 25, 2008

Featured Artist: The Cuddle Shop

Andrea at the Cuddle Shop has taken the traditional sock monkey and made it a hip addition to any kids (or adults!) collection. From her cute Strawberry Lemonade monkeys to her rockin' pink and black Death Angel (pictured above), she's sure to have a monkey that you want to cuddle!

1.Tell us a little about your craft, what is it and how did you get

started in it?

I make sock monkeys and I make each one a different character with their own personality. I started making some sock monkeys because I had several ideas of what I wanted to make. I had seen lots of fun socks that I thought would make a fun monkey. Now I have an endless list of sock monkey characters I can make. I just can't sew fast enough to get them all into my shop. Previous to making sock monkeys I had been making cloth dolls and I brought skills I had learned from doing that into making sock monkeys.

2.What inspires you or helps you create?

I get inspired in two different ways. I'll think of a certain character that I want to make, like my Jack the Undead Sock Monkey or my monkey I made after the character Teal'c on Stargate Sg1 (Editors note: yay, another SG fan!) so I'll go out and search for the socks and supplies I need to make those characters. Another way I get inspired is by the socks I see. When I was at the store and I saw rainbow socks I knew they would make a great Rainbow character.

3.What do you love most about being a crafter?

The thing I love most about being a crafter is I love to come up with an idea, draw it, plan it out and then when I start making it I see my idea take shape and then become tangible. It starts as an idea and then becomes something I can hold.

4.What one thing would you tell a new designer that you wish you had known when you first started?

That making mistakes is how you learn. You can't expect to be a perfect seamstress when you first sit down to sew something, but sticking with it and practicing is definitely worth it.

5.Where do you see yourself in five years?

In five years I see myself sewing clothing, and hopefully having my own patterns for cloth dolls and their clothing.

Morning Coffee 6-25

I'm still chugging along. I can't afford to fall behind this week!

1. One new marketing. Done
2. Work on table banner Done
3. Finish off flyer display.Done
4. Post some flyers around town. Done
5. Get everything organized for tomorrows meeting.Done,and just remembered i have a team meet-up right after, gah!

Tuesday, June 24, 2008

New Display

Yep, the paint and glue is finally dry on my shojo screen display! The best thing about it is it can be arranged three different ways, curved like this,giving a three sided display-
Or set up zig-zagged like a normal screen-

Or flat, almost like a window-It is made of painted foam core, dowels for the hangers, and a heavy wood base to keep it stable. The "rice paper" is actually thin plastic sheeting. It has dowels running up between the layers of foam core and through the base. Eventually, I would like to make one out of wood when I have the time. This version only cost about $5!

Morning Coffee 6-24

And....The madness continues! If I can keep this pace up this week should be cake. I hope... Ooh,and I did get the cast done this morning, yay!

1. One new marketing.Done, Project Wonderful update
2. List some items.Done
3. Get jewelry bag organized for Thursday meeting.Done
4. Finish signs.Done
5. Make/acquire card and flyer display. Sorta done. I got my cards and flyers all ready, but I have decided I need a small basket for them, so I will go by the thrift store tomorrow.
6. Start on table banner.Yeah, not gonna happen today.

Monday, June 23, 2008

Going full time- Part II

If you read Part I, you now know what I think the most important things to make the move to full time artist are. The first thing you need to do to start preparing for this is to get all your financial ducks in a row. For those of us who have a tendency to stick our heads in the sand when it comes to money, this can be a painful and eye opening experience. If you are serious in your goals though, it is a necessity.

First, find out where you stand. What is the bare MINIMUM you need to get by a month, how much debt are you carrying, and do you have any residual income (investment payments, child support, trust)? Next, make a plan to start paying on that debt. You want very little debt when you jump to self employment. We are lucky in that we have very little debt, just an $80 student loan payment that has a few years left on it. If you carry a lot of debt, and especially if you are having trouble making payments, get yourself to credit counseling ASAP, unless you really want to work that day job for the next twenty years... By doing this step right away, you can set a realistic goal of when you can expect to quit your day job. It is a lot easier to part with a paycheck to old debt if you have a goal to work towards.

Now you should have a tentative quit date. I made a point of writing minimum in caps up there. Often I hear people say they won't quit their day job until they are making the same or more working for themselves. Unless you are one of the lucky few, that just isn't going to happen until you are able to pour all your energy into your business for at least a year, probably more. If you are lucky enough to have a supportive partner who has an income, get them on board with your plan to quit now! If not, start living the frugal life and socking away every cent you can. Ideally, you should have enough saved to last you 6 months to a year, but rarely is anything ideal. Save what you can, know what you need to sell to make your minimum expenses, and make a plan to to sell that much. Also, put in place a back up plan.

Your back up plan is your get out of jail free card. It can be a partners income, selling off aunt Matilda's heirloom china, a hefty savings account, or taking a job. What, you say? Quit your soul sucking job just to take another one, I thought you were going to tell me how to quit! No, when I say take a job I mean take a job like the one you had as a teenager. You know, something that a poorly trained monkey can do and the only hiring requirement is a pulse, the one where you will never be emotionally invested enough in to try and climb the ladder and where you don't really have to think. A paper route is a good example, and is in fact our back-up plan. We know that a paper route only takes a couple of hours a day, there is always openings, and it pays enough to cover our minimum monthly requirements.

Realize some expenses will go up while others go down once you quit. You probably won't need day care, to commute, or to eat lunch out every day once you quit. On the other hand, you may need to find and pay for your own insurances now. The best advice I have here is to shop around. Research professional organizations in your field and check out their membership dues and if they have group insurance rates. Insurance goes into the minimum needed a month category because if you ain't healthy, you ain't working or earning at your maximum.

Finally, remember that money is the number one reason for divorce, and that worrying about it can lead to depression and health problems. If you are not someone that is comfortable taking risks, it does not mean you can't start your own business. All it means is you need to save more and cut down your expenses more. You can never eliminate all the risks, but you can minimize them quite a bit. Just make sure you keep the plan realistic. Don't try and save up ten years of expenses or over plan for highly unlikely emergencies (do you really need to worry about tsunami's is you live in Arizona?). On the other hand, don't convince yourself that your family won't mind eating ramen noodles for months on end either while you blissfully create away. Keep it realistic, and you'll be fine.

*Part III in the series, Plan It, will cover writing a business plan and ways to get money to start your business.

Morning Coffee 6-23

Busy, busy week ahead of me. Watch me overachieve for fun and profit!

1. Post blog article.Done
2. Place ad for open house. Done
3. Finish final display.Done
4. Do cast. Not done, was too hot today. but set up and ready to do first thing before it warms up outside!
5. List some items.Done
6.Make a couple of signs for open house.Done
7. One new marketing.Done, Craigslist ad

Saturday, June 21, 2008

My new Jewelry Party flyer!

I just thought I would post this, feel free to borrow from it (just not my images of course :)!
Click to enlarge. I blocked out my personal information on this one, you know, internet safety!

And above, my new card design. A lot more fun than my old one!

Friday, June 20, 2008

Stop working for the man!-Part I

This is a first in a series of articles on how to move your craft business to full time. Today mainly want to talk about what you need to do this. In future articles, we will tackle everything you need to prepare for and succeed in this profession!

If you don't think you have these qualities, don't give up. If you are even thinking of working for yourself seriously, you have enough of them to learn the rest. Think of this as a guideline of what you need to work on to move up to the next level.

1. Drive and perseverance . You must have the drive to succeed and the perseverance to keep trying when everything seems stacked against you.

2. Ability to avoid procrastination. We all procrastinate. For artists, it's easy to put off the things we don't like to do, such as the bookkeeping. Remember, if you can avoid procrastination now, the sooner you will be able to get your income up so you can afford to outsource the things you hate to do.

3. Outgoing. You must be able to greet the public in show settings or approach potential wholesale buyers. There are many ways to foster this that I will cover in upcoming articles.

4. Organization. Very few of us are born organized. This is a learned skill that everyone is capable of.

5. Courage. You will be working harder than you have ever worked when you were an employee instead of a business owner. The good news is, you make most of the rules.

6. Willingness to make sacrifices. This covers everything from giving up eating out to giving in on design decisions to please a customer.

7. A support network. You will be putting in long hours often by yourself. There is no water cooler to joke with coworkers around when a day goes from bad to worse. Make sure you have a support network in place, we'll cover this in more depth later.

8. Risk taker. There are risks in any business. The trick here is to prepare for and minimize every risk then don't look back.

9. Financially prepared. If you are three months behind on your mortgage, it may be wise to hold off taking the leap to full time self employment. Don't give up, think of it as the planning stage, then actually get a plan in place.

10. Confidence. This can be faked, but until you actually feel it, you will not be living up to your full potential. Confidence comes from the knowledge you are doing the right thing and the right moment, and educating yourself will help give you the confidence you need. I'll cover this more in later articles.

With these ten things you have the foundation you need to get ready to take that leap into full time self employment. I hope you continue reading in the coming months the rest of this series and it helps you take the leap as well.

Morning Coffee 6-20

Wow! I overslept, it is 10:30am right now!

1)Renew a Project Wonderful bid, I got quite a few hits off it in one day.Done
2)Work on next cast.Done
3)Take pictures for listings.Done
4)Post up blog post.Done
5)get more stuff ready for next weekends home show.Done

Thursday, June 19, 2008

Morning Coffee 6-19

I didn't get my display done, but I tackled everything else on yesterdays list so I'm not sweating it!

1.One new marketing.Done, made flyers listing info on throwing a home party featuring me to have available at the open house next week.
2.Work on tomorrows blog article.Done
3. Get a display done. Not quite done, but the paint is drying :)
4. Mount yesterdays cast. Done
5. Start prep on my next cast.Started, but not done
6. List some items.Done!

Wednesday, June 18, 2008

Featured Artist: Tinalina

When you first visit Tinalina, the first thing you notice are the care that goes into each of her designs. My first impression is that of simplicity, something many artist strive for but fail to achieve. If you are looking for just the right cards, I highly recommend you get yourself over to her shop!

1.Tell us a little about your craft, what is it and how did you get started in it?
I'm a cardmaker who primarily works with rubber stamps. I used to be big in to scrap-booking, but after I started Grad School it just kind of petered out. A friend's mom was into card making and stamping, and in turn converted me into a full blown cardmaker. I like being able to actually use what I create by sending it to someone. I've been stamping for a little over a year now and have been on Etsy for about 7 months now.

2.What inspires you or helps you create?
I get random spurts of creativity and my ideas often come from color schemes I see around me. It could be in a magazine, a friends' outfit, or another piece of art.

3.What do you love most about being a crafter?
Honestly, working with paper calms me. I teach middle school, so crafting is an outlet; a way to de-stress. I love crafting with rubber stamps, primarily because I cannot draw and stamps enable me to create pretty things without having to expose my inability to draw.

4.What one thing would you tell a new designer that you wish you had known when you first started?
You will not like everything you create. Sometimes a project just is not working and you have to be okay with scrapping it and starting over. Don't expect yourself to always meet your own, or other people's, expectations either. Do what you do because you enjoy it, not to meet the needs of others.

5.Where do you see yourself in five years?
In five years I see myself continuing with the plan my husband and I have. At that time we'd love to be in South Carolina staffed by a church (my husband is in seminary) and with children. The goal also includes continuing card making and who knows; maybe I'll even be able to make it my full time job one day!

Morning Coffee 6-18

I overloaded myself yesterday and ended up working from 7a.m. until 10 p.m. Not going to make that mistake today! It is beautiful right now in the great Northwest and I am going to take advantage of it by grilling out tonight :) I better get to work on this list now!

1. Post up featured artist interview.Done
2. Finish and turn in my guest article.Done
3. One new marketing.Done, I am counting the guest article as my marketing today, hah!
4. Work on display (outside,where it's gorgeous...)
5. List some items.Done

Tuesday, June 17, 2008

Morning Coffee 6-17

Wow, that was an awesome visit. We went to an amusement park Sunday and I can say without a shadow of a doubt that my pendants can survive water without any damage, gotta love those water rides! I didn't get my cast done Friday, so it is the first priority today.

1. Do my cast.Done
2.One new marketing.Done, placed my ad on another site via Project Wonderful
3. Work on yet another display.Done
4. List items. Done
5. Start prepping for my home show.Done
6. Work on my article for a guest blog.Done

Friday, June 13, 2008

Morning Coffee 6-13

Super short day today, whee!

1. Do a, yeah, not done
2. List some items in my shop.Done
3. list of shops to approach on wholesaling! Done
ta-da! That's it, then it's long weekend time!

Thursday, June 12, 2008

Start off on the right foot

If you you dream of successfully running your business, especially if you want it to become your sole source of income, you need to start it off right. Many people balk at the legalities of owning a business- licenses, taxes, and everything else that keeps you legal. You may be able to avoid these things for awhile, but if you want to succeed you must attend to these things. Below is a list of links to help you sort through what you need to so.

Business license- In the state of Washington it is fairly simple. You fill out the master application, which you can do online, pay a small fee, and you get your state tax license and trade name registration. This differs by state though, but the SBA (small business association) has a handy list for each state here. The only state missing from their list is New Mexico, so here is the link to their license information. the above link will take you to the information and filing instructions for your state. You may also need to register with your city or county. You can visit their websites for information, or pull out the government pages of you phone book and call your city and county clerk. Many times, cities and counties have discounted licenses for small home businesses and micro-enterprises, so even if they have the information on their website, you can save a lot of money by talking to a real person. This is going to cost some money, but it is worth it. For both my state and city license I paid $40, which isn't bad at all.

It is also important to register your trade name before branding yourself. It sucks if you have to change your name after having 200 business cards printed. You can register it on the state level usually when you file for your license. If not, just do a search of "trade name registration ". There is usually a small fee associated with it, in Washington it is $5. To register your trade name on a national level, you will have to apply for a trademark, which you can find more information on here.

Taxes- When you receive your business license, you will begin collecting sales tax. You will get an information packet from the state on when to pay your taxes as well as how much to charge your customers or taxes. I pay my taxes quarterly. You only apply sales tax to customers that reside or purchase from within your home state. The easiest way to always have the money when taxes are due is to deposit them into a separate account just for taxes. That way, you also earn interest on the money until it is time to turn over the states share. You will also pay taxes on your income. Here is a handy calculator to help you plan for these taxes. This will give you an idea of what to expect so you can plan accordingly and save money for it throughout the year as opposed to having to come up with a huge amount all at once.

Sites to answer all your questions-
Small Business Association (sba)- everything you need to start your business.

- this is an association of retired business people that supply low and no cost classes, help, and mentoring for your small business.

IRS small business center- your one stop for all the information on small business taxes and more.

Also, search your city for more resources. In Spokane we have SNAP, which is a community organization that offers free classes on starting your business, help with writing a business plan and securing funding for your business, as well as a business savings account where they offer you $2 for ever $1 you deposit in it. Your community may have something similar and it is worth looking into.

Morning Coffee 6-12

So much to do...My father in law gets here tomorrow, so no work really for four days! I don't know if that's a good thing or a bad thing, I've been really enjoying my new job as a full time artist :)

1) List some items in my shop.Done
2) One new advertising.Done, placed and updated Project Wonderful bids.
3)Work some more on my next cast so I can do it tomorrow and have it ready and waiting to go on Tuesday!Done
4)Blog post.Done
5) Make a list of local shops to approach on wholesaling.Not done :(

Wednesday, June 11, 2008

Morning Coffee 6-11

Happy hump-day! Yeah, I just like saying hump-day :) It is also the hubs birthday, so definitely going to spend some quality time with him! Today I am also volunteering at my sons school for field day, so I am going to lose a three hour chunk of my work day, but it's worth it. Time to get to work!
1. List some items in my shop.Done
2. start prepping the next cast.Done
3.One new advertising.Done, I have two Project Wonderful ads right now on different sites:)
4. Get a freaking tablecloth for my show table...I keep forgetting I need that!Done
5. Get some more vellum while I'm out , too, and finish that display.Done

Tuesday, June 10, 2008

Morning Coffee 6-10

Eep! It's already the 10th? How did that happen? My father in law is going to be here for a visit this weekend! Oh well, still work to do!

1. One new advertising.Done-ish. I am doing a guest blog (more details soon!), and I also have set up to start doing featured sellers here starting next Wednesday, which doesn't market me but spreads the love!
2. Drill and mount Saturday's cast.Done
3. Try and get a few photo's taken.Done
4. Finish off that display I was working on. Almost done, I need to get another sheet of vellum.
5. Work on some team stuff.Done

Monday, June 9, 2008

Here's a sampling of this weekends cast. Can you tell which one was a demo of my new design, to see how the resin worked with it?

This is one of my casting boards. I admit freely I stole the idea from John W Golden's wonderful resin tutorial. Because I don't pour into bezels (though his video really makes me want to try it someday!), I use it to keep my pieces separated and so they don't slide as much. If there is a spill, it will only ruin one row,instead of spreading across the whole board. I made these out of foam core board and chipboard. I didn't use the foam core for the dividers because it would have set up to high, but the chipboard works awesome!

Morning Coffee 6-9

Well, I did it again. I worked the weekend! Oops. Not too bad though, as all I did was finish up a cast I wanted to get done. We're going to be working on our landscaping today, so a short list today.

1. List the rest of my last batch in my shop. Done!
2. One new advertising. Working on a postcard size one page mini catalog to leave with shops I approach for wholesale.
3. research some craft markets. this is a process, but done! I worked on it today.
4. Work on one of my display idea's Done,it is looking awesome so far, I'll post pics when I am done!
5. Blog post!Done!

Friday, June 6, 2008

Terms of Engagement- Wholesaling part III

This is the final installment on wholesaling. You can read part I here and part II here. This time we are going to cover terms and invoicing.

You already have figured out your terms if you worked through the first parts of this series. Your terms cover your discount, minimum orders, payment methods and when due, shipping methods and charges, and any other information you find pertinent. They are written out in detail, and once signed by you and the company it will constitute a written contract. Here is a sample term using our imaginary widget company.

Wholesale terms and conditions
Widgets & Things Custom Doodads

Wholesale terms are extended to qualifying dealers at Widget & Things Custom Doodads sole discretion. Terms and conditions are subject to change.

Dealer Application
To establish yourself as dealer for Widget & Things Custom Doodads mail or email a signed copy of these terms along with a copy of your resale license and three (3) business references.

Initial order- Minimum order of $200 excluding shipping.
Reorders- No minimum requirements for reorders/restock. For orders under $50 a small order handling fee of $5 applies.

Prepayment by credit card only. You may place a credit card on file to expedite reorders.

Wholesale Discounts
Discount is applied to suggested retail price. There is a 50% discount on Doodads and a 30% discount on Widgets.

Shipping and Handling
You pay actual shipping cost plus a $5 handling fee on small orders below $25 before shipping. There is no handling fees on orders above $25.

Shipping Methods
For US locations we ship via USPS Priority mail including insurance. For International orders we ship USPS international priority. For shipping times, please refer to the attached production schedule.

Additional Terms
We reserve the right to terminate this agreement at any time before payment is received. All Widgets & Doodads will be branded with the Widgets & Things Custom Doodads logo. At the time of your order we will confirm our current production schedule. It is your responsibility to confirm there have been no changes to the production schedule prior to any reorders.

As you can see, the terms are simple and straight forward. Yours won't look exactly like this, but this is a good model to build yours from.

Invoicing is the final piece in the puzzle. If you process all your wholesale orders through Etsy, this step is more or less skipped when you post the reserved listing and you can print the receipt from Etsy to include in your order. If you will be invoicing outside of Etsy, I'll briefly cover the information your invoice will contain.

  • Invoice number (This will help both you and the dealer keep track of your paperwork)
  • Your name, address and phone number
  • Date
  • Name and address of the retail buyer
  • Shipping address if different
  • How the item is shipped
  • The quantity sold
  • A description of the item
  • The price per item
  • Price for the total quantity sold of a particular item
  • Subtotal for all items listed
  • Shipping charges
  • The total amount due
  • Buyer's signature
  • Any disclaimers regarding returns or damaged goods
You will keep a copy of this invoice as well as giving a copy to the dealer who purchased the goods. If the buyer is out of your area, you may not require they sign the invoice, but you will keep their signature on file on the terms paperwork.

I hope this has simplified wholesaling enough to encourage you to try it as well. This is a wonderful way to make your small business sustainable for the long term. If you have any questions or comments, I would love to hear them!

Morning Coffee 6-6

TGIF! This has been a good productive week :)

1)Two Etsy forum posts. Done
2)Two new listings.Done
3)One new marketing venue.Applied to do a blog fleature
4)Finish off the photo's of the last batch. done
5)Finish the wholesale blog series.Done
6) Polish off my own wholesale terms. Done
7)Maybe, if I feel like it, cast some prototypes of my new design.Too freakin' tired, but started prepping some of next weeks cast

Thursday, June 5, 2008

Morning Coffee 6-5

Back to work today, with much to do! I didn't get my listings done yesterday, but that's no biggie. I'm not sure daily listings do to much to boost traffic anyway, as my views don't jump by more than one or two when my item is newly listed.

1)Two Etsy forum posts.done
2)List two new items.Not done, sigh...see take photo's below.
3)One new marketing venue.I signed up but have not set up my flickr, and will also be doing a giveaway on another blog, I'll post details here when the time comes!
4)Drill and mount Tuesdays cast.done
5)Get together the stuff I promised in my team chat.done
6)Take some photo's. all the photo's came out crap, so going to spend Friday redoing them. grrr.

Wednesday, June 4, 2008

There is only 7 days in a week- Wholesaling pt. II

This is the second part on wholesaling. To see the first part click here.

When posting a question about wholesaling, one thing no one ever seems to address is a production schedule. Sure, your terms and pricing are important, but what is the point of even bothering with that if you can't deliver the goods on time? As a crafter, chances are in the beginning there is only you, and you don't hire out any of your work. If you are also selling elsewhere, at fairs or online, you will also have to figure that into your production schedule.

A production schedule is exactly what it sounds like. How much product can you produce while keeping up with your other business responsibilities in a set period of time? Deadlines are serious business, and if you habitually miss them, you might as well kiss your customers goodbye.

Setting up a production schedule is easy, sticking to it is the hard part. If you are already treating your business like a business, then you are ahead of the game. Even if currently you have no or low sales, to succeed you need to treat this like a job to succeed. I do not work outside the home, so this is my full time job. I don't punch a clock, or insist on working a set amount of hours either. I goal my time instead. At my current pace I work an average of nine hours a day, and a majority of that time is spent marketing or designing because my sales are not at their optimum yet. This is normal or a new business. In those nine hours I achieve the goals that I have set or that day on a consistent basis. You must be meeting and exceeding your realistic daily goals on a consistent basis before you are ready to wholesale.

Once your business begins to boom, you will spend less time on marketing and perhaps on design as well. Here is an example with widgets and doodads. Remember, widgets are less cost effective and take longer to make, doodads are quick and cheap with a high profit. We are assuming both are selling well in your retail outlet.

I start my business. No one has ever heard of me. I maximize my time by marketing 2/3 of my time. I spend the other 1/3 of my time producing and perfecting my design. I average 100 doodads and 50 widgets a week on this schedule. The marketing works and I begin selling 20 widgets and 70 doodads a week through my retail venture. Excited with my success, I seek out and get a wholesale account. They want to order 80 doodads and 45 widgets a week. I sit down to review my production schedule and realize that between wholesale and my current retail sales, I will need to produce 65 widgets and 150 doodads a week. I scale my marketing back to 1/3 of my time, and can now produce 200 doodads and 100 widgets a week. This also leaves extra being produced to cover any surges in sales I may experience.

This is highly simplified. You can also up your production by hiring outside help, even just to cover your office work, shipping, and marketing, though most likely you will be wearing all hats until you experience a modicum of success. So before you wholesale, sit down and figure out your maximum production for a week, and set up a production schedule stating how long a wholesale order will take, and make a nice list so you can produce it when a wholesaler asks.


If you are ramping up your production schedule to accommodate wholesale, you better make sure you are getting paid. Credit is rarely extended to a first time buyer. Decide on your payment terms up front. Stick to your guns, even if they say they normally only pay on receipt of order. If you decide to accept checks, do not ship the order until the check has cleared. Even some very large businesses are notorious for late payment or bounced checks. With the first payment, insist upon receiving three business references and a copy of the store's resale exemption certificate, if applicable in your state. Keep these in your files to stay legal. Don't forget to charge them shipping! If the first sale goes well, you can extend them credit where they pay you once their order is received or they pay on a certain time line, or you can continue to insist upon payment up front.

That's it for production and payment, come back on Friday for the final installment- Terms and Invoicing!

Morning Coffee 6-4

This is going to be a partial workday because I have some personal commitments.

1)Two Etsy forum posts. Done
2)List two items. Oops, not done.
3)One new marketing venue. Set up a We love Etsy account
4)One new blog post. Done

Tuesday, June 3, 2008

Morning Coffee 6-3

One of the reasons I am cutting my marketing down to one per day is because I have more ongoing markets and networks to keep up with. Another reason is I will be making the jump to some paid marketing soon.

1)Two new Etsy forum posts.Done
2)Two new item listings. Done
3)Photograph items I finished yesterday. Done
4)Finish prep on new batch. Done
5)Cast new batch. Done
6)One new marketing venue. Completed ad design and signed up for project wonderful.

Monday, June 2, 2008

How to wholesale- Moving on up (your prices, that is)

If you read Monthly Jolt yesterday, you are aware that one of my goals for this month is to begin wholesaling. Even if you aren't planning to wholesale, or actively seek accounts, you should still have a plan in case you are approached. I've been doing quite a bit of research, and I want to share it with you! Today we will tackle pricing. This is difficult for many of us, we have trouble charging what we are worth. Even if you never plan to wholesale, this exercise can still be worth it to make sure you are charging what your product is worth.

If you are already selling directly to customer, you need to check your retail pricing. Wholesale prices are normally 50% of what you are currently charging retail. There are many pricing formula's out there, one of the most popular being material cost x 2 + profit. I personally figure my overhead to make the product- this includes materials, supplies, and business cost- plus my hourly wage plus my profit markup. An example if I made widgets- (these numbers are completely made up).
It takes $2.00 in supplies and materials to make a single widget.
To run my widget machine cost $1 in electricity an hour, or .05 per widget
Fee's for listing or selling my widgets are $1
I pay myself $10 an hour and I can make 20 widgets in an hour. Prepping them takes another 20 minutes each. So I spend 23 minutes per widget. So labor cost is $3.83 per widget.
I add on a 10% markup, or .68, for profit.
So then I round up to $8 to keep it simple. Now if I am going to wholesale, that is $4 a widget. My overhead is 3.05, so I would only be making .95 a widget. This looks bad, but if widgets are something that are bought in bulk, such as beads, you can put a minimum order on your terms, which can be either a minimum piece or minimum dollar amount. I this still isn't a number you are willing to work for, you need to adjust your hourly wage or profit markup. The trick here is not to mark up something so much that it will not sell. This usually isn't a problem because many artists under price themselves.
Also, the difference between product markup and hourly wage is this- you are paid your hourly wage. This is the amount you will put into your personal account to pay your bills or buy some ice cream. Your markup goes back into your business. If you have a surplus of markup at the end of a quarter or a year, then you can pay yourself a bonus if you so wish.

Now, if after this, you decide that there is no way you can afford to wholesale your widgets, don't despair. Not all items fall under that pricing formula. Demand can change your markup. Let's say you also make doodads. They only cost .40 in overhead to make, you can make 100 an hour for .60 hourly wage, but they sell for $10 each. My math may be failing me here, but that is %900 markup! That means at a wholesale price of $5 you are profiting $4.60. You can at this point decide to only wholesale doodads, or to wholesale both with the plan being to make up for any loss on the widgets with the doodads.

The point I am making is that you need to find a pricing formula that works for you, and if you are planning to wholesale at any point, that formula will need to take account of that from the gt go.

Next time we will tackle production plans and payment, followed by the final installment- terms and invoicing.

Sunday, June 1, 2008

Morning Coffee 6-2

I did do a bit of work this weekend. I cast some pieces Saturday, that I had prepped on Friday, so they would be cured by today. I also spent more time online than I had planned, but that was only because we had a rainy, icky weekend.

1)Two Etsy forum posts. Done!
2) Drill and mount this weekends pieces. Done!
3)One new marketing venue. Done! I began designing my ad and ordered business cards and stationary.
4)Post two new items. Done!
5)One blog posts. Done!
6)Begin prepping next batch. Done!

I also snagged my first treasury last night, yay! Check it out!

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