Marketing Plan: Step Two

I figured out WHO to sell to, so now I need to figure out WHERE to sell my craft items.

An internet search points strongly to Etsy as the ideal place to sell hand-made crafts.  Also, eBay, Pinterest, Facebook and Twitter.  Artsy Shark has an article titled, 125+  Places Artists can Sell Online. Not every site will apply to your craft, so look them over to decide which ones will work the best for you.

Most definitely, the best place to sell items online is through your own website. You won't have to pay a middle man for the space you use, although the site will cost money to set up and maintain.  It is always best to buy a website that matches the name of your company because that is where most people will search for you.

 If you choose a free hosting site, you will be plastered with tons of advertising that the host chooses and makes your site look less than professional.  Running a business through freewebs.com or yahoo.com makes you look unprofessional and in turn, may discourage others from buying from you.

Many people are afraid of credit card theft online, so offering the option to pay with Paypal on your site is best.

$$$ Tip:  Remember to track all of your website expenses from hosting, registering the domain name, SEO charges, advertising, cost of building the website, pay-per-click campaigns and any other costs associated with your website.  You can deduct these expenses on your taxes. 

If you are getting a sense that an online business is not going to happen overnight, you are correct. It will only happen with a lot of work and planning.  To be successful, you will have to plan, organize, offer great products, a great product presentation, great customer service, and fast and friendly service.

Marketing Plan: Step One

In working on a business, one of the most important aspects is the marketing plan.  Figuring out your marketing strategy may take a few days or even weeks.

It is easy to ask, "Why do I need a marketing plan?"  The truth is, most consumers are lazy.  They depend on the entrepreneur to tell them what they want to buy and why.

Your marketing plan will include several sections.

The most important FIRST section is to find out who is buying your products.  Even if your product or service has world-wide appeal, you will need to focus on the segment of the population where the majority of what you offer will be sold.

In my case, selling at craft shows will probably not be an ideal market for me because the people going to those expect a bargain.  The market I am searching for is one that appreciates hand-made items and understanding the time it takes to make something.

Craft items are purchased primarily by women--whether it be an items for the home, baby and children's items, or accessories and clothing for themselves.

The next step is to decide WHERE to sell the articles.

Still in the Planning Stages

Update:

Yesterday, I began working on my business plan. It is not nearly finished; just an outline at the moment.  But, creating the outline forced me to think about which direction I am going with my business.

There is still a lot to do to get the business up and running.  I wish I could say this happens quickly, but it doesn't.  That doesn't mean that I am not posting items to sell already because I am.  My Etsy store is open and ready.  

This morning, I up-dated the "about" page and created store "Sections" to make it easier to find items in my store.  

A little research yesterday revealed what is selling on Etsy and accessories for the discerning young woman seems to be the current hot items.  Also, the most successful Etsy sellers have hundreds of items for sale.  These shops weren't created in a day, so I am now learning the art of patience.  I will continually add and update my shop.

Yesterday, I created a business card, using VistaPrint.  I wanted to upload a picture that I took myself of the Chesapeake Bay, so I had to purchase premium business cards, but they are still well worth the price.

$$$ Tip:  Make sure to track EVERY penny you spend on everything.--craft supplies, business cards, a car door decal, website expenses, tissue paper for wrapping the items for shipping.  You'll thank yourself at tax time. 

An easy way to keep track of expenditures relating to your business is to create a spreadsheet on the internet at a site such as Google. All of my files are on Google Drive so I can access them from my PC, my phone or my work computer during my lunch break.  I don't have to worry about sending a file to myself and wondering if the version I am looking at is the current version.

Write down expenditures as they happen.  Don't put it off or you may forget something.  I keep notes on my phone.  Carry a notebook with you if you don't have a Smart Phone.   The most important thing is to not delay.

$$$ Tip.  Get into the habit of keeping all your receipts, even if it is not related to your business

By keeping every receipt, you can double-check to make certain you have recorded every business expense.

Make a Business Plan

Planning is easy for me.  I do it all the time.  I make lists.  I make lists to tell me where my lists are located.  I plan.  I organize.  

The plan I am talking about, today, is a Business Plan for your Craft Business.

Even if all you have is a small Etsy store, you have to plan how you are going to DO your business.  No small business is too small for a business plan. Even if you simply take the time to jot down a few ideas, it will help you to stay focused on your business.  


I found this list here, and I don't believe I can make a better one. 

• Define your business goals and objectives
• Will help you to identify your target audience
• Enable you to identify the best business model for your business
• Assist with cash flow forecasting
• Enables you to better understand the business sector of your business
• Identify the skills needed to manage and operate your business
• Identify the technology needed to manage and grow your business
• Gain valuable information about your competitors
• Develop your marketing plan
• Identify and develop your branding strategy

At this stage of the game, you don't need a full blown formal business plan--the kind that is required if you are approaching investors or looking for a bank loan.  What you do need is a list of ideas.  Be honest about what you can actually accomplish by yourself in your one-woman enterprise, but don't sell yourself short, either.  

Remember, a business plan can always be adjusted as circumstances change.  Any plan you make is not chiseled in stone and is as close as a delete button.  Be flexible.

If you start out making expensive Barbie Dresses, don't forget your objective is to make money, so include a few "bread and butter" items that can be produced quickly and sold quickly.  You can change from making Victorian pot holders to socks at any time. 

Barbie's Elegant Gown: Step One Complete

It didn't take as long as I thought to complete the ruffled skirt for the lavender ensemble.  So far, everything is going according to plan... or pattern as it were.  The partly completed skirt can be seen here.

The skirt actually fits!  I followed the pattern precisely and this is the result.  As you can see from the previous blog entry, the skirt was first crocheted and then the ruffles were added on top of the basic design.

I made a modification in the actual construction of the lacy ruffles, but the design did not suffer for it.

Most of the materials I ordered for this project have arrived and just their cost alone, was $64.00.  I was thinking as I was adding the cost of all the pieces up, that I could make a dress for myself for less money.

Another FACTOR I had not bargained for is I don't know if I will want to sell the ensemble once it is completed. I had a brother who created beautiful cat sculptures from chunks of rock--Jade, obsidian, marble--and he always priced them high enough that if they sold, the pain of separation would be far less.  I make have to keep that philosophy in mind when I put the ensemble up for sale.

In the mean time, I will simply enjoy the creative process.

Progress on the Barbie Ball Gown

Progress on the Barbie Ball Gown

This is a picture of the skirt, so far.  I will have it completed by the weekend.  (Work totally interferes with crochet.)

I only work so I can afford to buy crochet necessities. :)  

The ruffles will continue all the way to the bottom of the skirt.
Last night I added a white bead to act as a button at the top of the skirt in the back.

Count the Cost

I have been thinking a lot about pricing craft items and what is involved in the whole process.

The cost of doing business has to include rent and electricity if you are working from home.  This can be a bit tricky to figure because if you don't have a craft room, you will need to figure in a percentage of your overall square-footage of your house or your apartment that you use for the projects.  Included is not only the area where you work, but the area where your materials are stored.

In my case, I use about 10% of my apartment for my home business. Therefore, the cost of doing business included 10% of the rent, the utilities and the internet expenses.  If you have a studio, make sure to include the rent and/or utilities payments.

You will also want to consider the cost of tools or equipment you use.  You may only buy a crochet hook once, but it is a business expense to be considered.

If you do any kind of advertising--Pay Per Click campaigns, business cards, decals for your car, internet advertising, flyers, direct mail, newspaper ads--include these in your cost of doing business.

Include any fees, such as eBay and Etsy fees.  PayPal fees.  Does your bank account cost anything?  Do you have a postage machine?

This is an easy formula:

RENT + UTILITIES + INTERNET EXPENSES + TOOLS + ADVERTISING + FEES = COST OF DOING BUSINESS

Now that you know how much you have to make every month just to cover expenses, figure out how many items you have to make to reach that goal.  If you sell only one item for $2.50 and your cost of doing business is $150 a month, that means you have to sell 60 items at $2.50 to cover your basic cost of doing business.  If the cost of materials for each item is $1.00, then you have to sell 100 items to reach your cost of doing business... and that is to just break even.  If you want a profit, you will need to sell 200 items to make a mere $250.00.  That means, you will have to sell about 9 items a day to make a profit.

Don't let these figures discourage you from plunging forward.  It takes time to build up a business enough to support yourself.

This blog entry is to get you to begin thinking about how to price items without way under-pricing.

People say, "I am only doing this to have a little fun.  I am not looking to make any money."

That is a reasonable statement, but allow me to give you an example of the impact this has on the market.

I made a ruffled scarf for selling and the yarn cost me $6.49 per skein (The cheapest price I could find online).  It took one skein of yarn to make the item.  The shipping for 4 skeins of the same yarn was $3.70. Dividing that by 4, the shipping for one skein was $.92, bringing the cost of goods to $7.41.  I started looking online to see what others were selling the same item for and I found that some people were selling it for as little as $5.99, shipping included.

Obviously, that is someone who is "just having fun" and "not interested in making money."

So, if I were looking for a HAND-MADE RUFFLED SCARF, would I pay $6.00 or the $25.00 I had mine listed for?  A reasonable person is going to pay $6.00.

From a business point of view, the $6 person made absolutely certain that no legitimate sales person can ever make a dime. I compare them to the trolls who do nothing all day beyond visiting blogs and articles to dis and insult everyone who writes anything on any topic. They think it is "fun to get a response from others," even if the response is totally negative.  Small children acting out to get a moment of attention.  That kind of action doesn't really benefit anyone, including the troll or the $6 person.

In fact, I could almost come out ahead by buying items from that $6 individual and save myself a lot of expense by simply re-selling the items.  However, I could not guarantee the quality of the piece or that it had NEVER been used, or that it was REALLY from a smoke-free environment.  To ensure absolute quality, I will still make the items and sell them at the higher price and offer a guarantee that the items is definitely hand-made, definitely never worn, definitely from a smoke-free environment from all brand new materials and not from something else that was ripped apart.

Two Dresses for Barbie

This past weekend was spent working at my regular job.  I did have time to work on an intricate crocheted dress that will fit Barbie. I love Barbies and have been a collector for years.  Making crocheted clothes for them is a new adventure for me.  Once I have a couple under my belt, I intend to design my own Victorian clothing for the dolls.

Out of necessity, there may be a couple of changes to each pattern, but it should be very similar when it is completed.  I will keep everyone posted on the progress of the dress.  Right now, I have just started the white under-skirt.  It is a couple of days from completion.

I also began another project which begins with stringing some 377 beads on the crochet thread... and that is just for the skirt.



The finished product of dress #2 will be different from the dress depicted in that I didn't have enough red beads for the project.  So, I strung red, yellow, orange and white beads on the thread so that I can begin the skirt.  I will start that one as soon as the white under skirt of dress #1 is completed.  I have plans to use my red ribbon and also my red and white satin roses.  I may purchase some yellow and orange roses for the project.  I have a couple of parasol forms, so I will have to wing it to make my parasol.

The only danger in working on two projects at one time is that it is all too easy to get bored with one or the other.  I have found that taking too long on a project makes me loose interest.  However, the items are small enough that they work up pretty quickly.

The Price is Right

Today, I started listing items for sale at my Etsy Store. During the process of of investigating the postage I should charge for my items, I discovered that people do strange things to pricing in their online stores.  

To determine how much something will cost to ship, I looked on the USPS (US Postal Service) website to find out what a reasonable amount to charge for shipping and handling.  I took into consideration the materials for packaging the items, plus the actual postage.  This is not rocket-science.  To see if my calculations were close, I searched other stores on Etsy.  The postage was all over the place as was the

price for items similar to mine.

Listings seemed to fall into one of two categories.  The people who way under-priced their items--presumably just so they would sell quickly--and people who way over-priced items.  I did see a few that were right on target.

Probably no one ever stopped to explain HOW to price items to some people. I have included a good method, although, not the only method for pricing craft items. 

A good way to price crafts is simple:  Calculate the cost of the items and multiply by 3.  It you used a single ball of crochet thread and it cost you $1.69 for the ball, then the items should be priced at approximately $5.00.  If there was shipping involved when you purchased the ball of crochet thread, add the shipping and any applicable sales tax.  If you purchased more than one item in the same shipment with your ball of crochet thread, be certain to use only a percentage of the shipping and/or tax cost when you calculate how much to charge per item.

Example:  If you bought 10 balls of crochet cotton and the shipping totaled $6.58, then divide $6.58 by 10.  Your answer will be .658, so I normally round it up a penny to .66 for each ball of crochet cotton.  In Virginia, sales tax is .05%, so add $.08 cents to your cost.

Cost of thread:      $1.69
Shipping               $0.66
Sales tax               $0.08

Actual Cost          $2.43

Multiply $2.43 by 3. A reasonable charge for the item would them be:  $7.29.  Rounding up or down a few pennies is all right, depending on the complexity of the item.

$$$ Tip:  You will NEVER get paid a per-hour charge for the item you are working on.  If your crochet cotton item took you 7 hours to make, you cannot reasonably add even a minimum wage charge to the item and expect someone will buy it.  Seven hours of work at $7.15 an hour will make your piece cost $50.00 before you ever add on the cost of the item.  

Pricing too low is detrimental to the entire industry. How can a person make any money if they sell their items for LESS THAN COST?  Yes, they may sell something quickly, but they are not making any profit.  In fact, they are losing money on every transaction and worse, they are diluting the industry.  I saw some items listed on Etsy that were being sold for less than the actual cost of shipping, alone.

This tells me people are not calculating their costs and have NO IDEA what they have invested in their items.

The name of the game is not SELL, SELL, SELL, but rather MAKE A PROFIT.

Organization

Keeping your online craft store organized is very important.  A craft store can get disorganized very quickly if forethought and planning does not come into play.

The easiest method for organizing your store is to decide what you are planning to sell and then organize those items into categories.  No special equipment is required--just a piece of paper or an Excel Spreadsheet.

My store will include:

• Face scrubbies
• Bath puff
• Wash Clothes
• Ruffled Scarves
• Crocheted Scarves
• Doll clothes
• Burgundy purse (already made)
• Turquoise purse (already made)
• Blue purse with vintage handles (already made)
• Variegated Pink/Brow/White purse (already made)
• Vintage Potholder--appliqued (already made)
• Vintage Potholder--blue flower (already made)
• Victorian Potholder
• Victorian dish clothes

The categories for these items will be:

Spa Collection to include:
     Face Scrubbie
     Wash cloth
     Bath puff
Wearable Art
    Ruffled Scarf
    Crochet Scarf
Barbie Clothes
    1880s Ball Gown
Handbags and totes
     Purses
Kitchen Collection
     Pot holders
     Dish cloths

While it is not possible to organize by groups or categories on eBay, Etsy does allow for this feature.  If  using eBay, each item can be listed under one of eBay's categories at the time the item is posted and each item can be posted in a different category.  If the item is listed in more than one category, there is an extra charge.  The idea is to keep the overhead costs as low as possible.  Spending extra money to list the item in multiple categories or to "bold" the listing is normally not necessary. 

Etsy allows items to be listed under different shop sections, which makes it easier for people to search the items listed.  There is a charge each month:: $0.20 for a basic listing.  

$$$ Tip:  Make certain to keep track of all charges and fees.  These fees are tax deductible. 

By categorizing each item, this enables customers to find what they are looking for more quickly.  If someone is looking for potholders, they don't want to sift through picture after picture of purses. 

Yarn Head

I think about yarn all the time. Does it show?

Today, I had to go to LabCorp, which always screws up the rest of my day.  The vampire there sucked 4 tubes of blood from me, I was fasting, and then started feeling woozy from blood loss.

Needless to say, my morning started off badly and the day hasn't improved, except, during lunch while I was surfing, I found a very cute image.

Day 1: Starting my Craft Business

The key to starting any business is doing research.  This applies to a craft business.

I have begun to make a series of lists.  A list of things I need to list, if you will. 

• What do I want to sell?
• Who will buy the products?
• Do I want to specialize?
• How much does each item cost?
• How much is shipping?
• How much time to I have to spend on this project?
• What inventory do I have on hand?
• What do I need to buy?
• Where will I sell the items?
• How will I promote myself?
• What are my goals?

I am a consummate list maker, so this part is easy for me. Gathering all of this information is necessary for  creating a business plan.  Every successful business owner has created a business plan at some point.

Today, I simply have a ton of information rolling around in my brain and very little on paper.  What I do have is this:

What do I want to sell?  Hand-made crocheted items and original patterns, mostly with a vintage or Victorian look.  The reason for this is because I love lace and lacy items.  I love crochet thread items.  I love trims on pillow cases, napkins, curtains, doilies, doll dresses, lacy cuffs, lacy collars, lacy gloves... well, you get the idea.

The first piece of advice I can give anyone who wants to follow in my slow and plodding footsteps is to KEEP VERY CAREFUL RECORDS OF EVERYTHING.  This information will be important to your business plan and also to the IRS at tax time. 

Also, subscribe to any newsletters that pertain to your craft.  For instance, I have just recently subscribed to Creative Income from FaveCrafts.com .  Not only should you subscribe to the newsletters, make sure you read them as they may contain something that will give you that jolt of encouragement you need right at that moment. 

Step By Step

It is official. I have decided to start a crafting business online.

To begin, I wrote down what I love to do the most and two things topped the list: Crochet and write, in no particular order.

Then, to put these talents to work, a plan was needed. (I am great at creating plans. I can practically paper my apartment in lists) Of course, I have to open a craft store on Etsy, start a Facebook page, open a store on Ravelry, Pinterest, and eBay. Writing How-to articles will help. Publishing original crochet patterns and/or selling them is a real start.

With any new business, a person will only get out of what they put in to it.

This blog will chronicle every step of the process and hopefully, encourage others to follow the same steps to  an online business and financial success.