Have you chosen the best business model for your handmade biz?

what's your business model

{image from the awesome Cardboard Safari – they have a unicorn!}

Thank you everyone for your comments to the last post I wrote! Your comments – and especially this comment by Jess – really got me thinking on the ways we sell our creations:

“Something that I do across a few venues is upload a core product range. So, on Etsy, Madeit and my own site, I make sure to have my entire range available, but on other venues, I just spend the time to upload my core range – that I’m pretty confident won’t change – and use that as a way to showcase my wares in as many places as I can. It’s a little way of having the best of both worlds – of course, you have to find the time to even upload that smaller range, which can be challenging!”

There are so many different “business models” – so how do you know which one is for you?

I cannot say that I’ve gotten it right myself yet – but I can say that this year, after applying certain changes to the way I sell my creations, I am much more comfortable with my model.

Let’s take a look at a few of the different models that are possible for your crafty biz.

Markets based business

Selling mainly at the markets (with the stock left over offered on Facebook or at an online shop).

I like this model and if you are set up for it with a car that fits all you containers and stall decorations and you don’t mind working weekends then it’s a great model for you. At a good market, you sell well and walk away with money on hand.

You can budget you stall costs for a year with no listing fees and fixed amount of sales. However, preparing for a market can be stressful (even when you’ve done it a few times). Cancellations due to weather will leave you with stock and, unless you do markets every week, less money coming in that month. I would say nowadays, an online shop is a must for a stall holder so customers can shop after the market too.

Selling made to order items online

You have your range of products, like cushions or jewellery,  for example, and you list the samples and then print/sew/make them to order.

This model minimizes the storage space but requires you to work to a deadline so you get the order posted fast enough to insure higher turnover and to keep your customers happy.

Facebook based business

You don’t have time to set up and update a shop, maybe you work full-time…so you create in the evenings and weekends and release items in batches once a month or so.  

I know businesses that prefer to work on – let’s say – 20 items for a month and then release them in bulk on so called “Market Nights”. Works great  once you have large-ish Facebook audience.

Selling only ready to post items online with occasional custom orders

If you don’t like stress of a deadline and a huge list of orders then welcome to my world!

I did have to take more space for storage but I like that I have plenty of stock and I just post it when I sell an item. As I make toys, I sometimes have to make them to order when they need to be personalised or made into bride & groom like the order I am working on now.

Having a stocked up shop, gives me an opportunity to relax a little more and advertise my business without the fear of being swamped and when I end up with a few orders, the shop is stocked so there is no “I need to make a few items for the shop even if it kills me” thought in my head. In order to achieve this, I have to accept orders only a few times a year and regulate it strictly.

Selling wholesale to the shops and building up as many stockiest as you can handle

It’s a good model for artists who can make a bunch of items at once like fabric printing or kits making.

You make items for a week or so, package them and send them off to the shops. This model is great if you like to know approximately the prospective earnings and you can just drive/post your stock to the shops and maybe have an online presence just for showing your range  to the prospective shops.

I personally love this model but it won’t work for my creations (I tried).

Complex business model

Mix and match applies not only to clothes!

You can create you own business model by combing all or a few of those listed above. I know a very successful  business that does all of the above: markets, Facebook sales, website with stock and offers made-to-order. However, I think, it’s a job for more then one person or a very organised and dedicated crafter!

Each of those models are very personal to the business owner as there is a long road before you find the right one for you and what you make.

Based on my experience, it took me good few years to identify what works the best for the time I have available and my creative process. Time is the obvious factor to consider but, I was surprised to come to the conclusion that the way I create is determining my business model.

I am impulsive, not very patient and hate being under pressure as a designer! If I have a new idea, I have to do it straight away!

I used to do made-to-order all the time for 2 years and it really put me under pressure.

I wished I could have more control over my creativity, but trying to make new things in between the orders, which I stayed up late to do in time, wasn’t fun.

I started wondering – “why I am doing this and what for?”

I identified that what I love is designing and creating, losing myself in that feeling when you have a new idea and you go with it.

It’s a lovely feeling, isn’t it?

Well, before I cut down wholesale orders, customer orders (to a manageable amount), and markets, I didn’t feel comfortable with my chosen business model. However, that’s just me 🙂

That’s how I came to my business model – sell only what I have in stock – so it’s make-list-sell-post model.

My friend asked me a good question when I shared  my decision with her – “Won’t it result in less money”?

That’s a very good question as it did cut my earnings at the start – but I believe in thinking long-term now.

A very important argument that I made – when trying to justify the decision to cut down on wholesale and customer orders – was that I couldn’t even promote my business before.

At the moment, the way I’m working is a great model for me.

With time it might not be and, hopefully, I’ll move on the the mixed business model. Who knows! Owning your own business means you can adjust the model to suit your needs and it’s awesome!

So, why has the comment that Jess made triggered this rambling?

Because I love the way she has her “core product” listed in the shops and think if you do the made-to order then it’s such an awesome way of doing it!

I am going to think how I can apply this to my business model.

In conclusion: identifying your business model is vital for you Indie business.

The model that makes you feel comfortable, as stressed out maker is an ingredient that will spoil the recipe. If you feel stressed, unsatisfied and unhappy, re-evaluate and reconsider the way your business is run.

You might have a great product – but maybe the way you sell it is bringing you down?

I would love to hear all about  your business model! Which one of those mentioned is yours or do you do it differently?

_________________

Do you want to get started with an online shop – and get it right, first time?

Join us for Set Up Shop and take your business to the next level! Registration closes Saturday, class starts April 1.

C&T Q&A – How did you choose your business name? {Share your Story}

This week’s question is from Karen, who writes:

My question is how do people arrive at their business name? I love yours, Epheriell. It’s a beautiful word, but why not Jess Van Den Jewellery Design? Why and how do people choose what they choose? It’s such an important first impression, that one word or phrase chosen, or to put their whole personal name out there. How do you know what’s the right choice for you?

Also, the boring bit, the legalities of it all. I believe using your name doesn’t require registration, but put ‘Jewellery Designer’ after it, and it becomes a business name, and will cost a fee. It’s so hard to know what your business will look like in 6, 12 months time. I suppose one just has to hope the name will still fit.

I bounce a round a bit with this question Jess, but I would love it if you and your posse would have a go at tackling it.

X Karen

I LOVE this question, and its one that I often wonder about, too.

business name

{photo of Jess by Paul Harris of see saw photography}

Let’s break it down and start with the first question – where does a name come from?

Funnily enough, as often as I get asked about the genesis of the name Epheriell, I’ve never written about it before.

In my case, the word ‘Epheriell’ is one I made up over 10 years ago now. I used to use it as my online handle for many years… and when I started my jewellery business, it just seemed natural that I use it as my brand name.

So, what does it mean? Epheriell is a mash-up of the words ‘Ephemeral’ and ‘Ethereal’ – with the addition of the ‘ell’ on the word, which came from a book I was reading at the time. I believe it was one of Jostein Gaarder’s books, and it had angels in it. I noticed that all the angels’ names ended with the ‘ell’ sound, and thought it was pretty.

And so, the word Epheriell was born!

Honestly, at the time, I didn’t put a great deal of thought into using this as my business name. It just ‘fit’. I certainly didn’t consider using my name, as I was only a hobbyist at the time, playing around. In hindsight, perhaps it would have been a good move, but on the up-side, my name is now still free to represent me and all that I am and do, rather than being tied to my jewellery brand exclusively.

As for the second part – the legalities – alas, I can’t give advice on that, because every country and every state will have different laws and regulations surrounding business names, so the best thing to do would be to search online for the business regulations in your area, or talk to a lawyer or someone else who has the qualifications to tell you what you need to do.

So, where did YOUR business name come from? I’d love to hear your story in the comments!

4 Rules to Follow When Considering a New Venue for your Wares

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{image by BlueBerry Ash textiles}

With so many new websites appearing, it is very tempting to open online shop in each and one of them.

More exposure, new customers and better promotions are promised to us. Moreover, a shiny new front, more functions and less fees – it is all oh so inviting!

After I had been invited to sell on 3 new websites that appeared recently, I started wondering… should I spread my efforts on many shops in the hope of more exposure; or should I pick one or two and promote them like crazy?

How many shops is enough and how many is too many? Which one do you promote first? Will your customers get confused when you send them in 6 different places?  So many questions!

I admit, I am writing about this not only because I’ve been asking this question of myself (and of Mr. Plushkin and my family) but because I was caught in this “trap” of too many online shops before…

I found that yes, it is confusing for the customers when there are too many shops available to buy from.

It is better to pick one shop (unless you have your own website) as a main one that will get linked to in your newsletter and your blog.

I am sure that each and every one of the online marketplaces that are available are  great in their own way, but how do I choose just one or two that are right? It feels like I am missing out on something wonderful by eliminating the other shops.

How do you choose an online shop?

4 rules to follow venue

I have 4 basic rules that I apply when considering opening a new one:

1. Easy to use with helpful functions. For me, it`s important for the shop to be easy to use! It’s actually vital as, with over 100 items in the shop, when listing an item takes too long, it just won’t work.

If there are too many boxes to tick with messy layout, I give up fairly quickly. Moreover, I am now looking at how many functions website offers.

Is it easy to apply coupons so you can encourage customers to return? Does it give you an opportunity to list different colours/sizes in one listing? Does a new shop offers something to your customers that the current shop doesn’t?

2. Fees. There are websites that charge for listings plus take a fee. Alternatively, there are website that charge only commission on sale.

I have heard an opinion that websites that charge only commission work better as they are more interested in you actually selling your creation. I am not sure myself as the one commission might be higher then listing fee+sale fee combined.

Get you calculator out and write down how much it will cost you to list and sell the best sellers on different websites.

3. Traffic. Do they have a good google rating? How long have they being around? Check out the shops that sell through the website similar items, how many have they sold?

4. Advertising. Have you seen this website contantly advertising in the magazines/websites/blogs that your target market reads?

The rule of finding a perfect shop for what you make is simple – try.

It will cost a bit in time and fees but if you apply those 4 rules, it will eliminate the ones that are not worthy of the time and effort. Do your research and give it a go. But don’t be afraid to close the shop and walk away thinking that it might take of in a month or two, maybe Christmas…..

Test the shop

Try not to promote it yourself via your media at first.

List items actively, make sure your tags and wording is right so you can be easily found in the search, buy some advertisement on the website without introducing your customers to it and see how it performs.

Look at your stats/analytics and see what’s happening with the traffic and where it comes from. It’s obvious if you will start promoting the new shop via media you use, traffic will come – but does the website that you are paying for gives you more exposure and attract new customers?

Besides, every maker needs to remember – you creations are valuable, you need to believe in that.

You worked hard to create your reputation and customer base and you are bringing it all with you when you open a shop on another website. I hear you saying: “Having a shop open that charges only commissions doesn’t really cost me anything” but having a standing still shop doesn’t really make your brand looks great as well as take into account all that time you have to spend taking listings off that were sold on the other website. Close it, I would say!

I would love to know  how many online shops you are running at the moment? Are you happy with the online shops that you currently have? 

C&T Q&A – Can You Have a Successful Handmade Business Without Etsy?

This week, Kate asks:

Do you think it’s possible to create a successful business without using Etsy? I used to sell jewelry on there and after 3 years my account was suspended for violating the etsy policies.  I didn’t realize it and after pleading with the admins, I realized they weren’t going to let me come back. I’m on Big Cartel and sales are slow.  I’m just not sure if realistically, it will ever amount to a successful business without Etsy. Any thoughts you have would be greatly appreciated. Thanks!

First of all, I’m sorry to hear about your issues with Etsy, Kate, that must have been a rude shock. I’m glad to hear it hasn’t stopped you pursuing your business, though!

Honestly, I’m the first to suggest that everyone who has a crafts-based business should have a shop on Etsy.

I still make a good portion of sales there, and it’s where I find a lot of new customers.

Etsy is definitely still the premier online marketplace for handmade – and not only that, it’s also a handmade search engine. I know that Etsy is my first port of call when I want to buy handmade. Both of these reasons are why I will never shut my Etsy shop – no matter how successful my own site becomes (Epheriell.com already accounts for well over half of my total online sales).

However – as useful and awesome as Etsy is for growing and running your business – I also believe that anyone serious about their handmade business should set up their own shop on their own website.

If you’re doing all the hard work to market your business and grow a customer base, you should be sending that traffic to your own website.

Now – there are of course other marketplaces out there online, and if you make reproducible products (you are doing that, aren’t you??) you should set yourself up on as many of these as you can feasibly manage. If only with a small sample of your core range. I see these sites as marketing – getting my work out in front of as many people in as many places as possible, at low cost.

Personally, I have my jewellery on Madeit and Blue Caravan here in Australia, as well as Supermarket HQ, Dawanda, and a few other places overseas. I make a nice number of sales across these marketplaces, but Etsy and Epheriell.com are my main shops, where I stock all of my work.

If you can’t sell on Etsy, for whatever reason, you should seriously consider setting up your own site, rather then relying primarily on another venue.

So, what are the costs vs benefits?

 

Etsy

Pros

  • Premier online marketplace
  • First port of call for many people wanting to buy handmade
  • Easy to use
  • Excellent ‘training’ ground – to compete on Etsy you have to play a stellar game with fantastic photos, good descriptions, excellent customer service, etc
  • Trust – people know that if they buy on Etsy they are protected if something goes wrong
  • Transparent feedback – do a good job and people will see that and buy from you

Cons

  • Fees – you pay listing fees, relisting fees, a percentage of every sale (and this is on top of the Paypal fees you pay)
  • Not as professional – anyone can sell on Etsy
  • Lack of control – like Kate, they could shut you down anytime they like, and all the work you’ve done will be extinguished
  • Distraction – people are likely to favourite you and forget and move on and try to find the best deal within Etsy, rather than sticking in your shop

 

Your Site

Pros

  • Control, control, control – you can do exactly what you like, make it look how you like, and no-one can take it away from you! It’s your baby.
  • Professionalism – having your own site shows you’re a serious business
  • Focus – once people are on your site, they won’t be tempted to click away to all the myriad other options available like they can on Etsy

Cons

  • You don’t have access to an immediate customer base – you have to do the hard work to bring people to you
  • People may be hesitant to make their first purchase from you if they don’t already know and trust you (many of my website customers found me on Etsy or elsewhere first, and after their first positive buying experience with me, now happily shop on Epheriell.com)
  • Might be expensive if you don’t have the knowledge to set it up yourself

 

Obviously, my recommendation is to have both – an Etsy shop and your own site (and any other venues you can manage). Having a shop on Etsy makes building your business a lot easier, especially in the beginning. You’ll find that you reach a kind of critical mass there, too – the more sales you’ve made, the more you’ll make as you are established as a serious seller.

However, you can have a successful handmade business without Etsy. It will just take you a little longer to grow your customer base. But if you’re patient, work hard, market smart, and have a stellar website and webstore, you CAN do it.

 

Want to take your Etsy shop to the next level, or set up shop on your own site for the first time? Join the email list to find out when I launch my upcoming ecourse, Set Up Shop.

10 Tasks to Do in the Quiet Months: learn to use the times of slow sales to your advantage

don't panic and carry a towel - hitchikers guide to the galaxy eye chart

{image by the Pressing Pigeon}

This post is written by Katia Donohoe.

Didn’t have sales for a few weeks and wonder what’s happening? Are you asking yourself if it’s happening to your shop only or is it like this for other shops too?

Most likely it is. There are at least two months a year when the sales drop. Depending on what you sell, it can be January – February or June – July.

So what do you do?

Do you try to buy tons of advertising, discount your creations or get out there Facebooking and Tweeting like mad?

Definitely not!

All those things need to be consistent and time appropriate. It’s not going to make you look professional by overwhelming your reader/followers with tons of updates in their newsfeed and you don’t want to look desperate by selling your creations at a super low prices.

The fact is, it can be quiet for so many reasons – holidays so everyone is away, tax time and, if you are selling overseas, it can be weather, different public holidays and festivities.

After a 3 years in business, I did calm down a little.

I used to think that every sale was my last, got nervous and anxious when there were no sales for a week/two/three, started questioning why am I doing this, stare at the screen, go in circles checking my Facebook page, Twitter, mailbox every 2 minutes…

Sounds familiar? Then read on…

After a while, you will discover that there is no such thing as a quiet month in handmade business.

There might be no sales but you need to learn to think long term. There is always so much to do and there are always areas that you overlook while busy.

Remember, all business owners are going through the same, just at a different time of the year.

Here are a few areas that you might want to have a look at while there are no email popping up in your mailbox:

  1. Check you listing descriptions for mistakes, and maybe add more information about the item and the creative process behind it.

  2. Make sure you use all the tags in your Etsy shop.

  3. Take fresh pictures. After looking at some of my product pictures a few weeks later, I often find that the light wasn’t good enough on that day or I forgot to upload all 5 pictures in the listing…

  4. Pre-make packaging. It is always great to have all envelopes stamped with return address and have all the promotional information that is included with an item in one place, ready for the busy times.

  5. Look at your stock: what is underrepresented? My goal is to have 5 of each creation in the shop in different designs/colours (note: I sell only items in stock, no custom orders) If you take custom orders, then check if you have enough materials for all the items. You might have run out of certain supplies but forgot to take the listing down.

  6. Make new stock! There is no better time then now to create new things. Put them aside and release the slowly when there is just not enough time in the day to make anything.

  7. Tidy up the paperwork. All of us guilty of putting paperwork in a pile and moving it somewhere where nobody can see it. Go, take it out and at least sort it by month and file it.

  8. Research new supplies. Shopping for new fabric/beads/buttons is always fun! If you are not yet ready to buy, at least you will know where to find it.

  9. Research new ways to promote your business, and evaluate your promotional efforts up to date. Can a lack of advertising or marketing be the contributing factor to the slow sales?

  10. Visit those blogs that you love and leave comments.

In conclusion, don’t fixate on slow sales. Instead, use this time to concentrate on the other areas of your business that need attention.

{image by Katia}

Remember that you are in this for a long term and building a successful business takes time and determination.

If you have all those things mentioned above in place and keep adding a new stock to the shop, sales will come in and you will pat yourself on the back for using the slow months to your advantage!

____________________________

katia

Katia Donohoe is designer and maker behind Plushka’s Craft brand.  Being of Russian heritage she treasures handmade crafts and love spending time creating things by hand.

She cannot live without hand-stitching, hot chocolate and Mr. Plushkin, bright tights and suede shoes.

She blogs at Plushka’s Craft where she writes about Plushka’s handmade creations, inspirations as well as her main craft passions – cross-stitch and crochet.

blog | twitter {@plushkacraft}

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