|Posted by Tonyascutebydesign on April 21, 2013 at 9:30 PM|
Boy these last two weeks I have been learning a few business things I'm sure I've been ignoring. Mostly I need to learn to think like a business person.
Shipping- When purchasing stock, think about the shipping costs. If you order 1lb and the shipping is 12.50 then you have to spread it over that pound. If you order 2 lbs and the shipping is 13.50 then you can spread it over more product. Make large orders and check shipping before placing the order. Use USPS if at all possible. They are the cheapest rate out there.
Product creation- if you spend 4 hrs processing 2 oz of fiber for a 1.5 oz outcome, you will have to spread the cost over that batch size. If you can spend the same amount of time processing 1lb, there is more product to absorb the impact. Sometimes it's more efficient to buy the blank product and dye it, or buy it already dyed.
Price point- I compared a wholesale fiber price to the retail fiber price of some sellers on Etsy. I found that even after shipping the markup was 3-4X the wholesale price. (some of it was handyed) This allows you to repay yourself, make money to restock, and gives you some money to pay the bills(profit). Sometimes these bills are the fees incured for doing business, like seller listing fees, credit card fees, website hosting fees, rent, supplies, ect.
Choice of product- The difference between an Artist and a Business person is that the artist creates what they like, then finds a customer to buy it. A business person creates what the customer likes. This one is hard for most artist/craft persons. You don't get to do what you want all the time.
Time- I've spent alot of time lately spinning new yarns, and dyeing others. I spend time knitting and processing fibers, but am I using my time wisely? As with the fleece example, our market will bear 4.00/oz max. a 4 oz bag of fiber being 16.00 Can I process wool from scratch to carded batt for 16.00? 2 hours to wash and rinse(30 min of actual work), 24 hours to dry (no work), 5 min to pick, 1 hour to card, 1 hour to dye.(15 min actual work) Aprox 2 hours of work+4.00 in raw fleece cost= 6.00/hour or less for labor. Don't forget cost of water, elect, dye, soap, bags, labels...
If I spin it that adds 6 hours for 4 oz of a 2 ply yarn. Plying commercial yarns is faster, dying machine made yarn/fiber faster and cheaper. See where this is going? Selling the fleece raw eliminates all that as well. So am I using my time wisely? Not quite, but we will be.