This month we’re talking all about profit. I didn’t want to focus on how to calculate profit or what we each do with our profits. Instead, I wanted to know how our makers have increased profit on an existing profit. Did they simply raise the price? Did they find a new supplier? Did they tweak the design? Did they change/streamline the production process?
I have raised my prices, revamped with product and packaging changes that makes the product more niche specific or more gift-worthy and cut costs. I recently added a kit option for wholesale with a couple products (almost zero labor) and have reworked some products (including this cork bracelet) to significantly reduce my labor time by switching from welding to riveting.
Over time, I have increased the prices on a few of my items, mainly my personalized hoops. The price of materials is pretty consistent for me, if I purchase from the same vendors, but as I got more orders, I realized maybe they could be a bit higher in price. Likewise as I got more orders, my process became more streamlined so it didn’t take quite as long, though, only marginally.
This is a bit tricky for me to answer since the products I offer for e.m.papers as they are downloads. My main materials and cost is simply my time. So for me it’s really about a pricing and advertising strategy. This has given me a lot of flexibility to play around experiment with pricing and profit margins and it’s been great.
However, I am thinking about offering printed cards soon both direct to customer using a third party supplier (printer) and potentially wholesale. I confess this overwhelms me a bit. When I think about materials, shipping, paying other vendors and the trade show costs for going the wholesale route it seems that reaching scale in sales fast is really crucial. So I’m afraid I have more questions than answers this month!
I recently revamped and re-released my embroidery kits. Instead of buying white fabric and ordering custom iron-on transfers for the kits, I now print the pattern right onto the fabric thanks to Spoonflower.com. That means I no longer have to go to the fabric store AND it saves me about $1 per kit. I’m actually planning to raise the price by $5 starting in 2015 after I have a few more wholesale orders and sales data to know which kits sell best. I also raised my profit margin on the kits by having multiple designs use the same color of embroidery floss. That way I don’t have 3 different shades of blue to order every month.
Have you increased your profit on an existing product? How did you do it?