March 25, 2014

How Jewelry Designer Peggy Li Shines in a Competitive Market

Filed under: Case Studies — Meredith @ 8:04 am

pl

Jewelry designer Peggy Li launched her company over 10 years ago, making her a veteran in the handmade business community. Today I’m chatting with her about how she’s grown her business and continued to thrive in a crowded marketplace.

Tell us a little about yourself and your company. What does your company do and when did you get started and what’s your growth been like over the years?

I create and sell jewelry at my website, Peggy Li Creations (http://www.peggyli.com). I got started like a lot of jewelry makers, by making jewelry for friends and family and for myself to wear. People would stop me in stores and on the street and ask where I got my pieces. On a whim, I sent some pieces into my favorite TV show at the time, Buffy the Vampire Slayer. To my utter surprise, they used pieces on the show and my business was born! I worked full-time for several years while running my jewelry business on the side but it has grown pretty steadily year after year. I went full-time with the business about two years ago and it’s jumped to 30% growth year over year.

When did you realize this was going to work and you could make a career of this?

I’ve always wanted to do a lot of things, so I don’t think I’ve even settled on this business as my career. I love the challenge of running a business and the creative outlet of creating things that people enjoy wearing. On the practical side, I believe that if you’re already working, it’s great to keep that job for as long as possible while you build your business (I even went part-time with a day job for several years before cutting the apron strings). It took a lot of pressure off of me and allowed me to enjoy all aspects of the business before I made it my business. When I saw that I could make as much money as my (part time) day job, when I saw consistent numbers year over year, that’s when I had more confidence that I could run my business as my full-time job.

Do you have moments where you get discouraged or feel like you can’t make your business work? If so, how do you get yourself out of that place?

As entrepreneurs I think we all fall into these funks from time to time. I try and focus on the positives and take a moment to celebrate the things that I have accomplished, then put it all aside and get back to work!

I know jewelry is a very saturated market, how do you stay competitive with so much jewelry out there and the influx of hobbyists flooding the marketplace with cheap goods since they aren’t trying to make a living or wholesale their products?

There are plenty of customers out there and it’s about targeting your market, understanding who your customer is, and speaking to them and finding where they live and shop. As long as I take care of my end, creating quality products, giving great customer service, and creating my brand to reflect the value of my product, the rest falls into place.

I also keep an eye on important stats like which items are selling. What are people looking for? What’s current in the market? How can I improve all aspects of my business?

One thing that’s really impressive about your business is your ability to get your product in the media (magazines, TV, movies, etc). How do you make this happen and does it make a big difference for you in terms of online sales and/or wholesale? How do you maximize the benefits of these media placements?

Thank you! My business got its start with a TV placement so it’s in the DNA of my business model. It’s very important for my online sales and is a great way new customers can discover my work.

I pitch my product to various shows just as I would pitch my product to a blog, magazine or newspaper. I’ll sound like a broken record – target your market! I target shows I think are a good fit for my brand. When I have a placement, I do outreach with TV fan sites and with “seen on TV” blogs and websites to get the word out about my work on TV. It’s also important to make those products SEO friendly for people searching for what their favorite TV character wears.

What are some of the most valuable things you’ve learned running your business or things you wish you’d known when you started?

I wish I had been more confident at the beginning and more proud to be a small business person. I didn’t tell a lot of people about my business when I first started and I wish I had more business mentors in the early years.

How do you go about getting your product in front of retail customers? Do you mostly sell online or at live events? What are some direct-to-consumer marketing tactics that did or didn’t work for you?

Over the years I’ve done lots of live shows, fairs, websites, brochures. These days I sell mainly through my online site and through a few select online retailers. I believe it’s all about understanding your target market and partnering with online sites that fit your brand. If an online retailer doesn’t work for you, don’t continue to use it! I have to use my time well as there is only one of me!

With online direct-to-consumer, I believe it’s so important understand SEO and optimize your ecommerce site to make it easy for people to find. You also need a website that is informative and easy to shop. I also blog, use Twitter, Instagram, Pinterest and Facebook to build community and share my brand with my customers, who can build a one-on-one relationship with me through these outlets. Building trust with customers and being credible is key for people who can only experience your product online before buying.

Tell us about a big mistake you made running your business, what you learned and how you recovered.

I’ve made a few mistakes  — spent money on PR firms and PR opportunities which were duds or worse, scams. These lessons have taught me that information is your best friend. Do your homework on any opportunity, understand your risk and options. Even more important, understand your own business, products and goals, and use this to help guide your business decisions. Also, don’t beat yourself up over mistakes! They will happen and they are part of the learning process.

If you had to start over from scratch today with a new business what would you do differently? How would you go about it?

I’d love to start a new venture and have partners so the burden isn’t entirely on my shoulders to get things going. I’d also like to tackle a business that doesn’t depend on physical product! For example, I’d love to take my experiences, especially in PR, and create a business to help other businesses build their PR.

A big thanks to Peggy for sharing today and be sure to check out her beautiful collection at PeggyLi.com. I actually wore a pair of her lovely earrings a few years ago at my wedding :)


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March 24, 2014

How the Do What You Love Mantra Is Hurting Creative Professionals

Filed under: Uncategorized — Meredith @ 10:42 am

pr

My partner Matt and I have been in the clothing and accessories business for several years, consistently selling hundreds of thousands of dollars worth of product that we genuinely like. By all accounts this sounds like success, but honestly we work a ton of hours and the income-to-effort ratio is really not to our satisfaction. Things have shifted very recently though and I’m thrilled, though you might be surprised at how.

We’ve started selling clothing and accessories we honestly do not like and would not wear, and we’ve been selling a lot of it every single day since we started doing it. We opened a second online store and started offering trendy t-shirts and accessories with cliches about keeping calm and mustaches. This is a radical departure from our usual design work, which features clever humor paired with well-executed original illustration. We prefer the latter, meaning it’s what gives us joy and constitutes what we ourselves would wear. That said, I have no problem with our new online store. I’m not “doing what I love” — I’m doing what’s profitable. And no, this doesn’t make me a “sell out” — it makes me a successful entrepreneur.  I’m doing what’s extremely easy for me and what I know how to do really well as a professional. I’m providing a product people want to buy at an affordable price point, which is a win for me and my new-found customers. If you think less of me for doing this, that’s fine. I’m not looking for anyone’s approval; I’m looking to pay my bills.

There is a pervasive and toxic ethos in small business culture (especially in creative small business) that you should do what you love and love what you do, and that by sticking to your artistic principles your market will eventually “find” or “discover” you or your brand and catapult you to success while still retaining your creative credibility. But if you capitalize on a trend or simply do something you’re indifferent to for profit, it’s seen as less than desirable, or even worse, people will tell you you’ll fail for doing it. I’m here to tell you this is WRONG and any business coach who tells you otherwise is LYING. This touchy-feely, start-with-why, follow-your-dreams-and-money-will-follow fairytale sounds good, but it’s NOT practical and it leaves no room for discussion of important matters that determine profit, like discovering marketplace inefficiencies and exploiting them to your advantage. Running a profitable business is not about YOU. It’s about making money, and that means it’s about selling what other people want to buy, not what you want to buy.

The “do what you love” mantra is a recipe for disaster (and also classist). It’s what keeps starving artists starving. If doing what you love doesn’t earn you money and doing what you’re indifferent to is frowned upon, you’re stuck. Even worse, that type of failure is an indictment of you personally. You were selling YOU (in the form of your love, your passion, etc.) and it didn’t work, therefore you suck. Don’t get me wrong, doing what you love is great! But strict adherence to this kind of mindset should only be expected in the realm of hobby, not the reality of a for-profit business. If what you love and what makes you money coincide, that’s great, but it’s absolutely not necessary and it’s often not possible.

I have to say, moving to Los Angeles really crystallized my thoughts on the “do what you love” ethos. The Los Angeles economy is primarily based on creative work. This city is home to actors, writers, set designers, cinematographers, costumers, artists, comedians and other creative professionals from all walks of life. Since moving here I’ve met so many talented creative professionals that blow me away.

While many of these professionals do what they love, they also do what pays the bills, and the best part of being in Los Angeles is that this is considered the norm. No one here is going to look down on you from behind their Urban-Outfitters-approved-eye-glasses-as-a-fashion-accessory. The comedians you think are so smart, clever, funny, and edgy make extra cash doing punch-up for movies you think are stupid.  The illustrators you think are so mind-blowing that got featured in Juxtapoz or Hi-Fructose are making extra cash freelancing for Disney and Nickelodeon and The Cartoon Network. This is talked about openly and with no shame in the creative community here, but it’s a reality that’s largely ignored by many aspiring creative professionals.

The major difference between a hobbyist and a professional is that hobbyists are doing something they enjoy and professionals are doing something that pays their bills. If doing what you love isn’t paying your bills, you’re not a failure; you just haven’t started doing what’s profitable. If you want to earn a living doing creative work, think about what people will pay you the most for, NOT what you most enjoy doing. Doing what’s profitable (even if you personally do not find it interesting) doesn’t make you a fraud — it makes you a smart business person.


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February 4, 2014

3 Tricks to Removing Risk from Your Sales Pitch

Filed under: Uncategorized — Tags: , , , — Meredith @ 12:43 pm

sales

Every day I get sales calls and emails. Most of them are asking me for money right off the bat and if I said yes to them all I’d be out of business. Whether you’re selling manufacturing services, web hosting, or even your product line wholesale the biggest worry your customer has is that dealing with you might lose her money. I’m not buying ad space on your blog because I might not get any sales and you still get the cash. I’m not buying your product to put in my store because my customers might not buy it from me and then I’m stuck with it. I’m not manufacturing a new product in your factory because it might not sell and I’m stuck with that inventory. That’s the kind of thought every customer has when you try to sell to him or her.

The good news is there are ways you can eliminate this worry from your sales pitch.  If you’re 100% certain your customer WILL benefit from your product or service, offer to prove it to them. Here are a few ways you can do it:

1. Money Back Guarantee
If you’re certain your product will sell in a store, make that promise to a potential wholesale customer. Next time you’re talking to a boutique owner you want to close, tell her you’re so sure your product will sell that if she’s not happy with the sales after 30 days you’ll send her a prepaid mailer to return any unsold merchandise and issue her a refund for those items.

This will help ease your customer’s mind because now she knows she can’t lose money working with you. You can try this approach with service based offerings too. If you can’t get people to buy ad space on your blog offer a money back guarantee on the ad space. If you are confident your advertisers will make money working with you, you shouldn’t have any problem with this and it will get you a lot more “yes”.

2. Partnership (We make money if you make money)
Selling something your customer pays for before she sees any benefits is difficult. Another way to circumvent this risk is by offering an arrangement where you only make money if your customer makes money. This is the model Square has adopted. This credit card processor provides its customers free hardware and comes with no service charges. The only fee Square charges is a percentage of sales. So if Square’s customers are selling products and benefiting from their service, Square gets paid. If the customers aren’t selling anything, Square gets nothing too.

You can use this approach for product-based businesses too. If there’s an online retailer you’d like to work with offer to drop ship products as their customers order. That way the online retailer doesn’t have to buy any inventory up front. If the products sell, you and the retailer make money. If the products don’t sell no one loses anything.

This is actually the model I use for my t-shirt printing service DropShipDTG. Since we print t-shirts for designers as orders come in, there’s no need for the designers we work with to spend any money up front. We only make money once they’ve made money.

3. Free Trial
A free trial is a great way to allow a customer to try before they buy. If you’re selling a service, offer that service for free for a week or two so the customer can decide if it is something worth paying for. If you’re selling a product you could consign the items to a retailer for a short period so they can make sure your product line sells before they spend money on it.

This business model is also starting to become trendy with web design/hosting businesses. You’ve probably seen commercials offering to build, host and market your business website for free. The idea is that these all-in-one service providers will do all the work and if you are happy with the finished product you pay them, if you’re not you don’t.

The biggest catch with removing risk from your sales pitch is that you have to be really confident that you’re selling a product that’s going to truly benefit your customers. If you’re just out for a quick cash grab and don’t care about the success or failure of your customers, not only will this approach fail, you probably won’t stay in business very long.

Have you come up with a clever way to remove risk for your sales pitch? Tell us about it in the comments below :)


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January 23, 2014

Is Bigger Better?

Targeting

In perusing Etsyology, you might get the impression that bigger is better. This site displays statistical data on sales activity on etsy.com, and offers a fascinating view of what makes for a successful shop and what people buy. One thing you’ll notice on this site is that many of the shops with the most sales also have the most products available, giving the impression that bigger is better. The more stuff you have for sale, the more orders you get, at least that’s how it appears. Is that really true? Let’s discuss:

1. The Long Tail
In terms of retail strategy, the long tail refers to selling a many unique items with relatively small quantities sold of each. This is the strategy used by many of the high performing shops on Etsy, and no doubt retailers all over.

What are the advantages of this retail philosophy?
- It allows you to have something for everyone. If you make posters and you’ve got posters about dancing, beer, baseball, cookies, etc. then regardless of a person’s interests, you are likely to have a product that suits them.

- Metaphorically speaking, this approach is like buying many lottery tickets. The more tickets you have the more likely you are to win. Simply having a lot of stuff on Etsy or Amazon or the internet in general means there are more chances to get orders.

So what’s the downside to this approach?
- The obvious big problem with this approach is that it requires you to design a lot of items AND stock a ton of inventory! It’s a big job to offer something for everyone and not everyone has the space to stock so much product or the creative juice to design a zillion things, especially products the designer may not be passionate about. This approach is well-suited to products that can be made-to-order, but might be a real headache if your product has to be produced in bulk.

- The other drawback of this approach is that is may detract from brand cohesion. If you want to build a brand that’s all about food and cooking, you can’t start making products about baseball and robots and kittens. It would detract from your singularly focused brand identity.

So who should employ this type of strategy?
If doing a lot of online sales volume is your primary goal this strategy can be great. It’s a proven way to make money selling stuff online and if you care more about bringing in the cash than following your vision this could very well be the way to go.

2. Keeping it Short and Sweet
If your goal is to keep a tight cohesive brand offering something for everyone may not be ideal for you. You may want to keep your brand focused on a specific theme or aesthetic and offering 1,000 different items may not be possible.

What are the advantages of this approach?
- Keeping your product offerings limited means you can maintain a cohesive theme or aesthetic for your brand. This may be especially helpful if you want your brand to be known in the brick and mortar world. Think about brands like Sanrio, Ed Hardy or Paul Frank. All of their products have a very similar look that’s easily identified with those brands.

- Keeping a limited selection of products also makes it easier to manage and stock inventory. If you have a product you have to manufacture in large quantities to make your margins, it may be necessary to limit your product selection. For example if you design shoes and your shoe manufacturer requires you to order 500 pairs of each kind of shoe you may not want to have 100 different shoe designs.

What are the drawbacks of this strategy?
- Not everyone is going to be your customer, in fact, most people won’t be. So you’re going to have to work extra hard to connect with the people who are. You’ll need to think more in terms of relationship-based marketing. You may not sell as much volume online as other online shops because you can’t sell to everyone.

- Since your product offerings don’t appeal to everyone, you’ll need to make sure the people who are a fit for your brand really love your product line. You’ll need to produce more “hits” to make sure everyone who might buy your product will buy it. For example, if your brand is all about birds you better have some of the most amazing epic bird art ever so that every bird lover under the sun will definitely want your products.

Who should employ this strategy?
If you are more interested in wholesale than online retail this approach may be a better fit for your needs. This strategy also makes more sense if you are trying to maintain a consistent theme or style for your brand. If your products have to be produced in high volume before they are sold this approach may be your only option.


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January 22, 2014

4 Essential Elements for a Top Notch Booth at a Craft Show or Festival

Filed under: Uncategorized — Tags: , , , , — Meredith @ 10:44 am

booth

Pop up retail events are a major revenue stream for my company. We sell our products at all kinds of events such as street fairs, comic cons and festivals. A large part of our success with pop up retail has been booth set up. Here are some of the most important elements of our booth:

1. Awesome Signage
You can’t sell products to people if they don’t notice you, that’s why an eye-catching outstanding display is key. Make sure your booth is tidy, well-merchandised and easy to browse. You want your customers to be able to see all the product options, pricing and the brand name itself pretty easily.

When we exhibit at shows we use a large logo banner in the front of our booth and display pictures of our best selling designs right up front. That imagery lures people into our booth and gets them to shop. Having our signage front and center means we can grab the attention of passersby and help them decide that they do want to stop at our booth. They don’t have to get close to get an idea of what we sell.

2. Loss Prevention
It’s a sad fact that sometimes people steal, and as a small business that can be a huge problem. It’s a good idea to merchandise your booth in such a way that stealing from you would be hard. If you have products that customers can touch and pick up, make sure they are all within your view so you can keep an eye on them. For more expensive items you may want to have them in a display case so people can’t pick them up and walk off. Sometimes when I do conventions other exhibitors have their booth so covered in products that they can’t possibly keep an eye on everything, making them a target for thieves.

When we exhibit at shows we display our messenger bags clipped to the side of the booth so they’d be hard to grab and run off with. We keep our tees neatly folded in in shelves behind us so customers can’t just grab them. We keep lower dollar value items like keychains and pins on our table, but that means fewer items on the table to steal and the items that are there are low cost items that wouldn’t be a nightmare to lose.

3. Marketing Materials
Exhibiting at shows should be as much about marketing as it is about selling your product. We maximize our exhibiting experience by having a newsletter sign up at our booth and giving out fun free swag with our branding.

I’ve said this before but it bears repeating: do not give out swag that just has your info on it. People don’t keep business cards or a vinyl sticker with just your logo (unless your logo is super awesome, like the Johnny Cupcakes logo or something).

When we do shows we give out vinyl stickers featuring our cute characters like Fuzz Aldrin. Our url is in the bottom corner but the focus is on the art and it gets people to take these stickers and keep them. They end up on skateboards, car bumpers, laptops and other places they’ll get seen which is a great advertising tool for us. We also hand out funny comic strips that people keep and hang up at home or work.

We give out all this free swag that people are happy to take because it’s cute and funny. We are happy to give it away because we know it will help them remember our brand. Even if they don’t buy today they might buy in the future or send friends our way.

4. Well-Organized Inventory
When you’re busy at a show the last thing you want to do is root around for inventory under the table. Having your inventory organized helps get customers in and out faster and helps you restock displays quickly.

We keep our shirts neatly folded in stacks sorted by design and then size so we can easily find a large mens Fuzz Aldrin shirt or a small ladies Unicorn Ranch shirt in a few seconds. We even organize our stacks of shirts by color so we know all the black shirts are on the right and all the jewel tone shirts are on the left.

Traveling with items like clear plastic storage boxes of varying sizes helps keep like items together and makes it easy to see what’s in each box. Even separating like items by size or style into large ziplocks helps avoid digging around for things you need to find quickly.

Got some favorite tips for exhibiting at shows? Share in the comments below.


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January 21, 2014

Spy on The Competition Like Never Before

Filed under: Market Research — Tags: , — Meredith @ 5:39 pm

detective

Want to know what’s selling and who’s selling the most? While this information was always available on Etsy, the wizards over at Etsyology have made it easier than ever! This stats oriented website tells you what’s selling on Etsy and who is having the most success selling there.

Here are some of the fascinating nuggets of info you can glean from perusing Etsyology:

1. Macro Data

This site tells you how many active listings appear on Etsy, how many items were sold last month, what the average sale price was and what the average conversion rate on Etsy was. This info can help you see how much competition you have, how your prices stack up and how your conversion rate compares to Etsy at large.

2. Shops Like Yours/Shops You Want to Emulate
With Etsyology’s shop search tool you can find shops like your own or search for shops with stats you hope to have some day. You can search by monthly sales and listing category (in addition to other criteria) to find shops you want to study. Maybe you want to check out how the competition has photographed their items or tagged their listings, now you can do it!

3. Data by Sales Category
This section is probably my favorite! You can hone in on specific product categories and see which categories have the best and worst conversion rates, what the average sale price is for each category, which shops have the most sales in each category and so much more!

Here are a few of the most fascinating facts I found on Etsyology:

  • Jewelry was by far the most competitive category (over 4 million listings) and this category also had one of the lowest conversion rates (just over 15%). The only categories with a worse conversion rate were quilts, furniture, crochet and art.
  • The best converting category was patterns at a whopping 92.7%! Books/Zines, Clothing, Geekery, Needlecraft, Plants/Edibles, Music, and Bath/Beaty were also high converting categories — all scoring over 30%. These stats are actually pretty consistent with my findings on department stores.  (By the way t-shirts had a conversion rate around 46%, if you’d like to get in on that sweet conversion rate with no up front costs, stop by DropShipDTG for a little help with that.)
  • Although jewelry had a high rate of competition and a low conversion rate, jewelry still sells — over 695,000 pieces sold last month! The low conversion rate is attributable to the massive competition. The other categories where a ton of product sold are Accessories (over 451,000 items), Clothing (over 303,000 items), Children’s Goods (over 266,00 items) and Paper Goods (over 246,000 items). It’s worth nothing that over 27% of the childrens goods sold were clothing.

P.S. One of my fave biz advice experts, Andreea Ayers, is sharing some amazing tips on product marketing. Check out what she has to say! You’ll be glad you did.


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December 11, 2013

Are You Letting Stubbornness Get In The Way of Smart Business Decisions?

If you started your business purely because you really enjoy pulling a squeegee across a mesh screen or manually operating your vintage letterpress, this post isn’t for you. If you started your business to make money, then listen up! Every day I talk to artists who are convinced some aspect of their production methods or manufacturing materials is a must-have and that their customers care deeply about this thing they’re so stuck on.

Here’s the reality: Most of your customers probably aren’t married to wearing American Apparel t-shirts. Most of them don’t know what the heck “giclee” means. They cannot tell the difference between a notecard set that you made by hand with a letterpress vs. the set that was mass-produced using modern machinery to produce a similar effect. Your customer doesn’t view your products through the same lens as you. More often than not they are buying a product because they like the design of something, not necessarily due to the specific components or manufacturing techniques used in its production.

When evaluating your product manufacturing methods and components, ask yourself these questions:

 1. What Will Make Me More Money?
My partner and I sell t-shirts and accessories and we do not print on American Apparel; we print on blank shirts that cost about half as much as American Apparel. They’re perfectly nice and soft and well-made with a great fit, but don’t have the hipster cache of American Apparel. We sell thousands of shirts at live events every year and no one has ever decided not to buy a shirt from us because it wasn’t American Apparel. It’s very rare that we run into someone who has an opinion on our blank shirts one way or another. Mostly our customers are looking for a comfortable tee with a good fit that features a good design that speaks to them in one way or another. We also very rarely run into a customer who doesn’t like our shirts because they want a thicker, heavier weight shirt — it can happen, but it’s extremely unusual. We don’t expect to please everyone, so we try to design our products based on what will please most people.

If we chose to print on a more expensive blank shirt because we just assumed our customers insisted on it we’d make less money. We’d either have lower margins (less money for us) or we’d have to raise our prices (making our price point too high for many customers — again, less money for us). I’d print on a more expensive blank shirt if I had some evidence to support that my customers really wanted shirts made of organic cotton or a certain brand of shirts, but it’s simply not the case. I see no reason to adversely affect our income to add a product feature that the overwhelming majority of our customers don’t care or ask about.

2. What Is Scalable?
When you started your business, maybe advertising that all your products were handmade by you sounded like a charming selling point. But what happens when your order volume increases or a department store calls wanting to place a large wholesale order? Is it realistic for you to keep making everything yourself by hand when you have to sell thousands of pieces every month? Even if you could keep up with all that production, is that going to give you enough time to tend to the other parts of your business, like new product development?

A product is not inherently bad because it was made by a vendor or employees, and your customers certainly won’t enjoy the product any more or less based on who physically made the item. If your creative business is your livelihood (or you want it to be), think about how you’re going to keep up with production as demand increases.

3. How Do You Know What Your Customers Really Want?
Are you assuming your customers want you to use specific production methods or components or did you come to this realization based on their feedback? How do you really know your customers would *only* buy posters you designed if they are screen printed vs. printed digitally? How do you know your customers prefer a more expensive piece of jewelry with fine gem stones instead of a more affordable piece with faux stones? Selling at live events is a great way to get customer feedback in real time. What are your customers focusing on about the products? Are they actually interested in the manufacturing process? Are they more concerned with price than the quality of the materials? Are they buying your items specifically because they are handmade by the designer or 100% organic or 14 karat gold? Take note of what your customers seem to like about your items when they’re right in front of you, and think about ways you can lower your manufacturing costs while still producing a quality finished product your fans will enjoy

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November 21, 2013

Don’t Want to Compete on Price?

Filed under: Uncategorized — Meredith @ 3:53 pm

video

I recently stumbled onto a thread on a marketplace website where the merchants were complaining that customers said the pricing on the marketplace was too high. Some of these merchants were imploring the site owners to re-brand the marketplace as a place to buy handmade and small business products, reasoning that customers should be willing to pay higher prices for handmade/small business because they shouldn’t support evil, corporate, big box stores and their dirt cheap prices.

On the face of this, it sounds good. But the reality is that all things being equal, people are motivated by price. While this marketplace site has a lot of handmade and small business products, the marketplace is dominated by products designed around the pop cultural properties du jour such as Breaking Bad, Dr. Who, Adventure Time, etc. And right now, that stuff is absolutely all over the place. You can get that stuff at Walmart, Target, Amazon, etc., not just handmade versions and not just small business versions.

Here’s a fun thought exercise: imagine I have a Dr. Who fan on my Christmas list and they could use some art on their walls. If I can buy a Dr. Who poster on Amazon for $6.75, why would I go to another marketplace website and pay $15 or $20? Sure, maybe the $20 Dr. Who poster has a different design and was silk-screened by hand in a hot, uncomfortable basement studio, but at the end of the day if I’m shopping for a Dr. Who poster and I can get such a poster for less than $7.00, why would I pay two or three times as much for a fairly similar product?

Being a small business or a purveyor of handmade goods is not compelling enough of a reason to get people to buy from you. You need to either compete on price or offer something those other stores and merchants can’t offer. I personally prefer to offer something no one else has. I prefer this for a few reasons:

1. It’s better for my brand
If I were selling Adventure Time tees, I’d know customers were buying my products because they like Adventure Time, not because they like my brand. When that customer walks down the street, they blend in with everyone else. Their shirt would look pretty much like everything passersby have seen a zillion times.

Instead, I know customers are buying items from me that only I’ve designed. Those designs don’t look like everything else in the vast consumer market, and will prompt passersby to ask those customers “where’d you get that?!” Every time I sell another tee or hoodie or messenger bag featuring my art, it’s one more person that’s going to be out in the world showing off my totally original material to everyone who passes them, thereby growing MY brand, not someone else’s.

2. I can set my prices where I need them
My company is the only source of products featuring my art. That means I get to set the price and I don’t have to sell my products on razor thin margins. My customers aren’t going to find a vastly cheaper Fuzz Aldrin shirt from another company because Fuzz Aldrin is my creation. That means I get to say what a product featuring Fuzz Aldrin is worth.

By contrast, if I were selling Breaking Bad themed products I’d have to do a fair amount of research on my competition and see how others have priced Breaking Bad merch so people will consider my products. Instead, I’m selling products featuring my own creations and it allows me to justify selling $25 shirts instead of $10 shirts. It also helps normalize the idea that independent artists are the place to go for unique, new, original material and that unique, new, original stuff is worth more money.

When even one company touts itself as being the product of an indie artist or purveyors of handmade goods but then sells products featuring famous corporate characters like Batman, Mickey Mouse, etc., it’s bad for ALL handmade/indie artists. It conflates cheap, mass-produced, unoriginal products with the concept of handmade, independent art. It trains consumers to expect everything should be cheap and unoriginal because they see that from companies billing themselves as handmade and/or indie artists. It blurs the distinction between Walmart and Etsy.

So much of my own job at Ex-Boyfriend has become consumer education. I’ll be exhibiting at a festival and someone will ask me “what’s this from?” I have to explain that it’s from my imagination. It’s sad that people are so used to homogeneity in the marketplace that they assume everything is from something else. Usually people are delighted once they learn that they’re seeing something that’s awesome all by itself without being attached to a TV show or movie.

3. I get to help shape the culture
I don’t know about you, but I’d rather be the Beatles than Beatlemania. I’m not interested in being a cover band; I want to inject my own humor and aesthetics into the cultural zeitgeist. I can do that because I’m creating original material. If I just designed products around material other creators produced I wouldn’t be adding anything new to the culture. I’d just be trying to capitalize on the success of another creator.

Think about the successful artistic brands you know of — Sanrio, Paul Frank, Johnny Cupcakes, Blue Que, etc. They didn’t achieve their success by glomming onto the meme of the moment; they created their own universe, their own brand, their own artistic vision. They didn’t follow the trends, they set them. This is really what all creatives should be striving to do because it results in a world that’s filled with more interesting, original, new material.

4. Getting sued sucks
Riding the coattails of other creators is a recipe for legal trouble. Intellectual property owners are well within their rights to sue anyone who sells products featuring their trademarked or copyrighted material without permission. When they do decide to get litigious, IP owners can sue for thousands or even millions of dollars. And if you sold infringing products to a store, that retailer could get sued.

To me, it’s not worth the risk to my own business or my retail partners. I’d rather know I’m free and clear to make money off of my art in any way I like because it’s mine. I can retail, I can wholesale, and I can license, and I never have to worry about someone telling me I don’t have the right to do that.

If you’ve been selling products featuring other creators’ characters, know that you don’t need to do that. People absolutely will pay a premium for good original products. I know it’s true because I sell thousands of my own products featuring original material every month. Think about what you’re trying to accomplish. Do you want to make a quick buck and keep your fingers crossed that you don’t get sued, or do you want to build a brand with staying power and put something new into the world?


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November 18, 2013

You Shouldn’t Invest In Inventory Until You Have Sales

Filed under: Market Research — Meredith @ 10:43 am

Image by OneLenz

“You shouldn’t invest in inventory until you have sales!” said Lori Greiner on a recent episode of Shark Tank. Greiner is a millionaire entrepreneur and panelist on TV series Shark Tank. If you don’t already watch Shark Tank, you absolutely should! The series is about entrepreneurs pitching their businesses to a panel of wealthy entrepreneurs-turned-investors. If the entrepreneur is successful the investors will invest in their business in exchange for an equity share. Every episode is full of interesting commentary about entrepreneurship, but this comment from Laurie is a particularly good one.

The Shark Tank investors were talking to an entrepreneur who’d sunk $200,000.00 into inventory and his business was operating at a loss. He did not end up getting an investment offer. All the investors thought he’d sunk too much cash into inventory.

But Greiner’s comment is a tricky one — how do you make sales with no inventory? Obviously it would be nice to have a proof-of-concept before you invest in inventory, but it begs the question, “can you sell something you don’t actually have to sell?” Yes! And here are a few ways you can do it:

1. Pre-Sales
If you have a product you can only sell after it’s been mass produced, hold a pre-sale to secure funds for production and to demonstrate that people do want to buy your product.

If you’re running a pre-sale, you might want to offer your early adopter customers a discount. They are buying the goods long before they will be delivered and helping you get your first batch of inventory made. You can use your discount offer as a selling point to drive sales and reward customers who helped you get things going.

If you can’t generate enough sales from a pre-sale to fund your manufacturing, that’s a pretty good indicator that demand for your product might be less than you expected. Better to know this before you spend your capital on inventory rather than after.

2. Made to Order Products
Made to Order products are a great way to start selling goods before you produce them in bulk. You can make the products yourself or have them made as orders come in. This is a great way to see what people will buy before you stock up on finished goods. If you aren’t going to be making your own products to order, look into suppliers that provide this service such as DropShipDTG or Art of Where.

3. Small Batch 
While it might be cheaper per piece to make 10,000 of something, hold off on that kind of inventory level until you know you can sell the goods. Consider producing your finished product in smaller batches, even if the unit cost is a lot higher, just to test out sales before you mass-produce.

A friend of mine who designs and manufactures sleepwear actually market tests styles of sleepwear from other companies before she manufactures. She goes to retail stores and buys different styles of pajamas to sell online. She makes notes on what sold — details like colors, sleeve length, fabric type, etc. and designs her own sleepwear based on that sales data. Although she doesn’t actually make money selling a few dozens sets of pajamas she bought at Target, she is able to gather enough sales data to know what she should be producing for her own product line.

 


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November 15, 2013

Selling What Sells: How to Get People to Buy More of Your Art

If you’re an artist trying to sell art you’re leaving a lot of money on the table if you’re literally just selling prints or originals of your work. This is because home decor is one of the tougher categories to sell in general.

Don’t believe it? Check out this graphic from Target’s 2011 annual report. Target is a brand that works hard to promote their housewares line and yet apparel and consumables like food and laundry detergent outsell housewares both individually and as a whole.

target

The story is the same at Walmart, where home goods make up a mere 6% of sales while apparel comes in at 13% (more than double). Even health and wellness beats home goods.
walmart

JC Penny’s sales tell the same story.  Home goods make up 21% of sales, almost all the other sales are comprised of clothing and accessories.
jcp

Macy’s sales mix looks the same. Home goods make up only 16% of sales while clothing and accessories make up the rest.
macys

Why is it that retailer after retailer has less success in housewares than any other category?
All of these retailers certainly sell a lot of home decor products and do plenty to market these products in advertising, wedding registries, etc. The issue is consumer shopping habits. Home decor lasts for a long time and people rarely need to restock. People are in the market for home decor usually after they move or when they have a life changing event like a marriage or a baby. Moves, weddings and babies don’t happen for the average person all the time.

On the other hand, the average person replaces their toiletries, clothing and accessories pretty often. That’s why these are such great products to sell. Once you have a customer who enjoys your brand they’ll keep coming back if you sell products they need to purchase more often.

If that’s not good enough reason to get into selling your art on apparel and accessories, there’s more!
If your customer is buying your art for her home, the number of people who will see that art, comment on it and go seek it out to buy for themselves is a tiny sliver. If your customer is wearing your art out in public she is showing your art to thousands of people every day just by walking around. Your customer basically becomes a walking billboard for your art every place she goes. She’s likely to run into more people who will see your art, notice it, ask her about it and seek it out to buy for themselves.

Do you want to make more money?
If yes, it’s time to look for ways to get your art onto products people consume every day. I know this strategy works because I use it for my own brand. While we do offer our art on prints and in the past we’ve offered a few other home decor items, our t-shirts outsell decor items 100 to 1!  Most of our online sales come from word of mouth. People ask our customers where they got their shirts and our customers send those people our way. Most of our traffic from search engines is people searching for keywords from our designs.

So how do you get your art onto products people want to buy?

  • Consider putting your art on functional items like t-shirts, bags, wallets, belts, pendants, etc. You can customize these products yourself or have them made for you.
  • Look for products with great margins. If you can make something for $2 and sell it for $15 that’s a great margin. If it costs you $5 to make something and you can only sell it for $7 that’s a less attractive margin. Only consider items like this if you think you can do a really substantial amount of volume to make up for the poor margins.
  • Look to other retailers for ideas. Take a stroll through a store like Pier 1, Macy’s, Urban Outfitters, Bed Bath and Beyond, gift shops, etc. Notice what sorts of products they offer that feature graphics — things like candles, t-shirts, soaps, pendants, belts, etc. Take note of what they are retailing these products for and think about whether you could produce a product like it featuring your art.
  • Get creative with sourcing. Sites like Etsy are full of makers, often based in your home country, who might be able to produce bespoke goods for you at a wholesale price if you order in bulk. Also check out sites like epromos.com and other promotional product websites. They have a huge assortment of items you can have customized to feature your art. Check our suppliers that specialize in custom products like Ink It Labs. They create custom laser-cut accessories featuring your submitted art.
  • Consider private label manufacturing on-demand, such as dropshipdtg.com, which allows you to sell your art on t-shirts without any up front costs. Or check out Art of Where which allows you to sell your art on device cases and leggings.
  • If you’re going to have products made featuring your art be sure to request samples, especially a sample featuring your art if possible, so you know you’ll be happy with the finished result.

 

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