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Thursday, 28 May 2015

How to make more money from selling handmade products (part 2)

I'm by no means an expert, but I love sharing what I've been learning on my journey of running a small handmade business. Recently I've been thinking a lot about how to make more profit and earn a little bit more money. You can catch up on part 1 here where I explored the impact of increasing the retail price of handmade products.

Part Two - Use higher quality materials

Depending on what products you make, it's likely that a large part of the cost of the finished item will be the time it took you to make. It might only have cost you a couple of pounds to buy the paper/wool/beads, but if it took you a while to make up the finished item (and you want to pay yourself a decent wage) it probably costs much more for your time.

For example, you might buy £5 of colourful beads and then spend 2 hours stitching them together into a beautiful necklace. If you want to pay yourself £10 an hour you've spent four times as much on your wages compared to the cost of the beads.

You could try speeding up the making process, looking for ways to be more efficient, but at the end of the day handmade items are made by hand and this will always take time.

To make more money from selling your handmade items you might have thought about spending less money on materials, but have you ever considered spending more? You can sell the same product at a much higher price point if you use more expensive, luxury materials, yet it takes the same amount of time to make.

Back to that beaded necklace example. What if you were to make a very similar necklace that still takes 2 hours to make, but this time you use more expensive beads. Perhaps you might add some swarovski crystals, or sterling silver elements. Let's say you spend four times as much on the beads, so that they now cost £20, but the necklace is worth a lot more so you could double the retail price.

Obviously this is over-simplified, but spending more money on the materials could actually help you to earn a better wage for the time you spend making.

It's a bit counter-intuitive, but imagine you wanted to buy a knitted blanket. How much would you be prepared to pay for a lovely handmade blanket made from cheap yarn? And how much would you pay for a similar blanket knitted from pure wool? Knitted blankets might take hours to knit. Made from cheap yarn it's just not that special, but made from pure wool it can reach a very high price point. Using higher quality materials may make it easier to charge a decent wage for your labour time.

Next week I'll finish the series by considering how you might make more money by paying other people to do things you could have done yourself, so make sure you pop back for part three.

Tuesday, 26 May 2015

Cards I've made

As well as crafting for my job it's also my hobby (how lucky am I?!) and I love making cards for us to send. I like the chance to be properly creative without having to worry about making designs that are suitable for the shop (i.e. profitable, easy to replicate etc.). So I thought I'd show you a few of the cards I've made recently. Some of these ended up going into the greetings card subscription packages because I loved them so much, and some are just one offs that I'll send to friends and family.

Thursday, 21 May 2015

How to make more money from selling handmade products (part 1)

From time to time I like to share what I've learnt from setting up and running my little handmade business. I'm not an expert, but I might be able to help others who are a few steps behind me on the journey. Even if you aren't trying to sell handmade items, I hope you'll find it interesting to see what is involved behind the scenes - sadly I can't just sit here being creative all day long!

One of the things I've been thinking a lot about over the last year or so is how to make more money from what I do. I'd love to get to the point where I'm paid a decent wage for all the hours I put into my business. So I thought I'd share some of my thoughts over a mini series of 3 posts.

My starting point is a small business selling handmade products that has got established and found products that people want to pay good money for. But it's just not making sufficient profit. How can you start to make more money by selling your handmade products?

Part One - Increase your prices

The most valuable lesson I learnt about pricing was this:

I used to worry about putting my prices up because it may mean that less people would buy my work. And this bothered me. I didn't want less sales, I was trying to make more sales. Then I read the above, - and I wish I had noted which amazingly insightful person shared this valuable lesson so I could thank them. It's possible to make less sales but more money.

Lets think about an example. Say I sold hats for £8 each and sold 20 a month, then doubled the price to £16 but only sold 10 hats a month as less customers wanted to buy my expensive hats.

So my profit is higher, my costs are less AND I've only had to spend time making 10 hats rather than 20!

Therefore, put your prices up and don't worry about losing a few customers. You don't have to double your prices, the general rules will work even with a smaller price increase. If you sell your handmade products at a higher price, even if you get a few less customers, you could easily still make more money overall. Obviously there will be a point at which no-one wants to pay out such a high price tag and you lose all your customers, so it may take a little experimenting.

Justify the price increase

To help sell your products at a higher price point you might need to justify the price increase. Here are three ideas:

1. Sell your expertise.
If you have been running your business for a while and you  have made a lot of your products you are no longer an amateur just starting out, you are a skilled craftsman. Make sure your about page and product descriptions really sell this.

2. Smarten up your branding.
If you want to sell at professional prices you need to look professional. My sales really started taking off when I refreshed my branding a couple of years ago. I started to look like a proper shop.

3. Make sure your packaging reflects the quality of your product.
It might be ok to ship a cheap item in a recycled envelope, but if your customer has paid a lot of money they may be a little disappointed (unless recycled packaging is part of your brand). Think carefully about how you present your item to the customer. Does it need a packet, tag or belly wrap? Will you gift wrap it? What sort of packaging will it be shipped in? Make sure everything is consistent and well branded and your (now a little bit expensive) product will feel worth the money.

Parts two and three are now available:
Part two - make more money by using higher quality materials
Part three - remember that your time is money

Monday, 18 May 2015

New in the shop: Handmade notecards

Every month I like to make sure I add something new to my shop. This month, there's two new packets of notecards.

I've been designing some new cards for my greetings card subscription. Once a month I send out packages of three cards, with some designs taken from the shop, some new designs that aren't yet available elsewhere and some cards designed exclusively for subscribers. These two notecards were made for subscriptions, but I liked them so much that I thought I'd offer them in my shop too.

First there is a pretty set of cards made with washi tape and die cut butterflies. They would be perfect as thank you cards, or for sending a little note to say hi.

And these map notecards are made from real vintage maps. I have so many little pieces of map left over from making journals (like this one) and I've been saving them all because they are just too nice to waste any. So this is the perfect use for all my little scraps! These notecards feature 9 circles cut from a wide range of different maps and atlases all over 50 years old, so each card is unique.

Both sets of notecards come as a pack of four, presented in a kraft brown folder. They'd make a lovely gift for anyone who likes stationery. Pop over to my shop now for more details.

Thursday, 7 May 2015

Handmade favourites - gifts for chocoholics

Mmmm, chocolate! After putting together this handmade favourites collection I now totally need to eat some chocolate. If you're looking for a gift for anyone who loves chocolate as much as I do, these are my top picks. Eight of the best handmade gifts for chocoholics, all made in the UK.

Chocolate fish and chips by The Sweet Gift Company
Hot chocolate gift pack by Henley Chocolates
Gluten free fudge brownie bites from Lynda Jane Cakes
Chocolate marshmallows by Mello Mallo

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