Plan B Is Always Plan A

I know people always love the stories behind the names (well, I do), so I will try to give you a glimpse of how it all started.

For me, greeting cards were meant to get something out of my system. With enough retail experience to know that lacking design credentials and technical knowledge would give very limited legs to my venture I set plan A to go to the Ladder Club (I mentioned this Club back in one of my posts), so I would get design help, then do a trade show and put it all to bed. That plan massively failed as I’ve later learnt that the Ladder Club doesn’t actually help with design critique and was fully booked up when I did my query. So, I did that first trade show (Top Drawer) anyway, which surprisingly turned out brilliant. I had to quickly come up with plan B, which I am still working on. My husband keeps me sane and helps a lot with admin, IT and at trade shows. He passes expert opinion on new designs, so when he doesn’t like something I know it’ll sell well. 

Nowadays, I learn a lot about design from You Tube videos, reading online magazines like Moyo, from fellow publishers in the greeting card industry, the Ladder Club and spend reasonable time on visual platforms like Instagram and Pinterest

My designs style has changed over the years and this year I am hitting the spot with what is closer to me. I have some contemporary birds with metallic, which proves to be very popular with buyers.

I keep the best bits from my previous life as a Business Mentor at The Prince’s Trust and occasionally have meetings/invited talks with entrepreneurs at the Peter Jones Enterprise Academy at Leicester College. I say/fool to myself that all this keeps me young.

Last but not least, cheers to plan B. It often turns out to be plan A.

Hope this inspires you to go on and make your plan B a very successful one.

Best Wishes,

 

Is Card Publishing a Serious Business?!

I often get asked of what is needed to start a greeting card business and in fact whether it is a serious business at all. It is a shame that often people assume that greeting card business is simply a hobby and hardly earns any cash. I think it all depends on what is your product and how you run your business.

It is true that many new greeting card businesses (in fact many start ups) begin on the kitchen table. The sheer abundance of craft materials in the hobby market alongside the fantastic quality of digital print available nowadays makes a greeting card a very easy product to make and bring to market. This, alongside the fact that retailers like cards as a relatively low risk product (because consumers often buy a gift accompanied by a card) makes the greeting card market an extremely saturated and fiercely competitive market. The card designs are trend-driven and usually the life-cycle for a card is 6 to 12 months, unless you hit the right button then your bestselling design may sell for years.

So, if you are serious about turning your card hobby into business then this is another matter. To decide what type of card business is right for you, you would have to consider your skills, experience, the amount of capital you have and your personal preference.

Generally, card publishers publish two types of cards, printed cards and handmade cards. All card designs based on stamping, assembling, individually hand-painting etc. will be very difficult to product in large quantities for the trade and are considered suitable for personal use or hobby.

Printed cards are produced in large numbers and command lower trade and retail prices. They face fierce competition from cheaper printed cards in the Far East and tend to sell better in card shops than gift shops. Printed cards could be artists reproductions, collages or handmade designs and then photographed shots, photos of landscapes, flower arrangements, toys displays etc. They could also be commissions you have done for a private client who has let you use their work or elements of it for commercial use.

You could print the cards digitally to start with and once you have proven record of sales you can go and do litho printing (the difference between these two printing techniques will be highlighted in another blog post). I often hear stories of publishers just starting out doing large litho printing runs only to discover that they may never shift the cards. Tip: if you are starting out, make sure you have proven track record of selling your cards to the trade, not to your closest friends and family. It is very tempting to do litho print, where the cost per card costs a fraction of the cost for digitally printed card. However, the litho print runs tend to be in the thousands (usually a minimum of 1000 per design) and as such a litho print run is more expensive than a digital print run. Remember if you fail to sell those cards it is only a false economy and at the end of the day the cards may cost you more than having been printed digitally. You need to have large enough database of stockists who re-order regularly to make this venture viable. It would be good if your printer lets you experiment with different boards as the design can look quite different on different boards, which will also set your card aside and above the cheaper ones flooding the market in discount cards shops.

good-times-cars-handmade-sabivo-design-sm

Handmade cards are more special than printed cards as they offer a different shopping experience – something done by hand will always be more special and valued than something mass produced. They also tell the recipient that somebody had carefully chosen a special card for them. Hand-finished cards face the same concerns about printed cards but they have the added embellishments like jewels, bows, dried flowers, embroidery bits and any other trinket you could think of. Handmade cards are more trend driven than printed cards and often the add-ons can be the decisive factor of their uniqueness. When you make handmade cards, make sure you make them in batches or enlist the help of family and friends when making or outsource the embellishment process if you could afford it. It is tempting to buy cheap embellishments as they are widely available from craft shops. However, as the handmade cards command higher retail price (£3 to £6 per card depending on the size) and consumers nowadays are very savvy make sure you choose good quality embellishments. The board you choose is also very important and often textured, pearlescent or lightly tinted boards are used for hand-crafted cards as they not only are better quality, they often give a more luxurious feel to the cards.

fly-birds-handmade-sabivo-design-sf

There is a common misunderstanding of what is a handmade card. I have heard publishers claim their cards are handmade just because they assemble and pack them by hand or they have drawn them by hand. I would have to say that handmade card will qualify as a handmade when components to the design are added by hand. Any other packaging process does not make them handmade. They are simply hand-wrapped, hand-packed etc. as are many other products in business. The drawn designs would then have to be called hand-drawn, hand-illustrated, hand-painted etc.

So, here we are. If you are thinking about a card publishing venture choose what are you going to do wisely and remember you could always switch and fine tune when you go along. The importance is to start.

Best of luck!

SSK Signature

 

 

5 Myths About Starting In Business

Marcus Says NEW SABIVO Design 2014

You’ve done your homework and in theory you ticked all boxes along the way. You came up with a ground-breaking product or service, trashed your bank saving or persuaded family and friends to part with some cash or cleverly got a bank loan, either way, you made your product reality. Then you did a brilliant marketing job with adverts launches and shouted pretty much left, right and centre about it. You applied to lots of business and industry-relevant awards etc. In other terms, you just launched your business. Hurrah! You thought the money will start pouring. But they don’t. Huh…You are thinking ‘What has just happened?!’. You thought just because you came up with this great product, everybody is going to love it, but they don’t. You thought because it was your dream, everybody would buy into your passion and enthusiasm. But they don’t. So, what really happened?!

Chances are that you have fallen into the trap of glorified business start up stories. In this blog post, I have decided to demystify the most common 5 and there are many more.

  1. ‘I am my own boss’ – Well, you are not, I hate to break it to you.  You are most likely to be very flexible with your own time and to have escaped the 9-5 rat race or 12h working day. You might have said goodbye to 100 miles daily commute (like me) but you are likely to have entered a different bossy world. You probably got rid of 1 boss, but now you have 10 or more, all at once. The one where your customers are your top bosses and alongside you’ll get your suppliers, logistics companies, trade show organisers etc., all of whom will dictate your day-to-day routine.  Because it is them who will send you orders, deliver your orders on time, agree on discount when you purchase consumables or book your precious trade show stand and so on, you get me now.
  2. ‘Everybody is my client’ – Wrong! We are all different, we have different hobbies and interests, we live our lives differently, decorate our houses differently, we watch different TV programmes, read different books and magazines etc., and so is your ideal client. You have to spend the time to figure out who is he/she and in order to do so you have to do a simple exercise. It’s pretty similar to when you were back to school and dreamt about your ideal boyfriend/girlfriend. The difference is that now this is your ideal customer. Write a simple list of questions: what age is he/she?; how does he/she look like?; likes/dislikes; what does he/she earn?; job preferences; where does he/she shop? does he/she have disposable income?/holiday destinations etc. etc. Once you have answered those questions, you can start actively searching for your customer and then sell what you have in the bag.
  3. ‘They will come’ – Once you have found your perfect client you may think ‘I have my product or service, they are coming and I can roll for some years now’ – Wrong again. This is just the beginning, your first step. You may fly for one or two years, but inevitably the things will stall. Why?! Because the marketplace has this insane need to look for the next big thing, to offer the most exciting new product or service to its customers. This need is almost overwhelming for any newbie in business. So, you can’t rely on what you have. You have to evolve constantly and you have to market your product or service, every single day as even the ones who come may not come back.
  4. ‘The first 2-3 years are the hardest’ – Whatever your time frame to success was – just triple it! While it is true that once you go beyond the two years things would improve and might take off. Unfortunately, they may not take off big time. You may have been really confident of doing something different but the path to world domination may not be quick or may never happen. It is true that some rare gems exist and some innovative products fly even in mature industries. There are some relatively young industries like technology, for example where the overnight success is possible but majority of start-ups simply take a slow and long path to establish themselves on the market place. The reality is, it is probably much longer and slower than you ever imagined! Throw in the mix a global economic crisis and your theoretical assumptions may have hit a very rocky road along the way.
  5. ‘Doing it for the love of it’ – You have to get real really quickly. You are likely to spend about 30% of your time (if you’re lucky) doing what you wanted to do in the first place: designing, writing, baking, making or generally the stuff you love and which gave you the idea in the first place.  The rest of the time you will be wearing so many hats, that are impossible to list in a short sentence. You will be doing admin, selling, marketing, following trends, competitors, book keeping, accounting, chasing payment and answering loads and loads of emails! Get real – the fun stuff always comes second I hate to tell you…unless you have rich parents financing your ‘love’…but then we would call that a hobby, not a business.

So, these are the 5 common misconceptions about starting your own business. It is good to know what to expect and be prepared as then it is less likely that reality will brutally crash your dreams. Hope this read helps you.

Take a deep breath. It is a rollercoaster ride, but is wonderful.

Best wishes,

SSK Signature

Do You Sell Your Product At The Right Price – Part 2

In my previous post I wrote about setting up the right wholesale price in the ‘bottom-up’ approach. If you have missed reading it you can catch up here.

In this blog post I will guide you through the ‘top-down’ approach, which in a way is a cross checking your calculations and probably makes you face the real retail world.

Let’s assume your cards would sell in the gift shops at the retail price of £2.99. In my last blog post we arrived at the calculation of £1.50 wholesale price of your cards, which you propose to the retailer, so he/she can sell them at £2.99. It now means that you will have to sell an awful a lot of cards to make a viable business.

Additionally, it also means that if you register for VAT you have to ‘lower’ your wholesale price to £1.25 in order to be competitive. If you ask why ‘lower’, it is because if you increase your original £1.50 wholesale price by 20% (at current VAT), it will become £1.80 (£1.50*1.20=£1.80) and the cards retail price is no longer £2.99 but is £4.32 (£1.80*2.4=£4.32), which the retailer will possibly round up to £4.49, in order to sell. This also means that now your cards are in a different price bracket and the competitors you are competing with are completely different. Additionally, as a rule of thumb, the higher the price (trade or retail), the slower the sales rate although your margins would be higher.

Despite the fact that you could never dictate the RRP to a retailer (generally, once they have paid for the goods it is their property and they can do whatever they like with them) it is advisable to know where your product sits in the market place. So, if you were generally happy with your £1.50 wholesale price, it means that those £0.25 have to be absorbed somewhere or you have to sell more product at the market place.

You can safely apply the usual mark up of 2.4 to check your prices but make sure you know it for your industry or the specific stores you are trying to sell to as it can vary a lot.  For example, at some expensive places like London or for some department stores it can be 3.2. The mark up can also go up to X5 for some trendy fashion labels, which are trend setters, so make sure you understand everything in advance.

Hope this post was useful to cross-check your trade prices.

In the next blog post I will look at some wonderful PR opportunities for card and gift shops.

Do You Sell Your Product At The Right Price? – Part 1

I often get asked how a product and service is priced, because of my professional background in fashion retail and buying. So, in this post I am going to cover some basics, which you can apply when you price goods to sell, whether wholesale or retail.

Please note, all figures used are for figurative purposes only and are not reflection of what is out on the market. This post serves the only purpose to be your basic guidance where you do not know where to start from.

In service-based businesses charges are based on delivered  result per hour. Let say, you are a greeting card design consultant and your area of expertise is to consult the trends of the season, colour ways, new product releases etc. You would normally charge £30.00 per hour as you know this is the norm. However, to bring more business you offer a package, where the consumer is charged for 10 hours delivery but you give them 1 hour extra.  You can offer a certain consultancy cost per hour and a more value-for-money option if the client subscribes or uses your service on a regular basis.  If you are in the creative industry, you can start with fairly good example of charges per hour at the Artists Association and People Per Hour  and continue to shop around the web.

However, getting the price right of a product is slightly different than a service and it is really important as it is where your profit lies. As my business is within the greeting card industry, my examples will be for cards, but I’ll throw some some fashion retail knowledge too.

When you price for wholesale you can do ‘bottom up’ or vice versa and in this post we will cover the 1st part and in part 2 we will cover ‘top down’ pricing.

Let’s assume you are a supplier and embellish handmade cards and you can make a batch of 10 per hour to sell to shops. We take the handmade cards as an example as by nature they are time consuming to make, although materials are relatively cheap.  Let say it will cost you £4.00 to make the cards, your hour is worth £10 and you put overheads (rent & rates, water, travel, electricity, insurance) of 10p per card, just to simplify things.  You wholesale price will be:

Materials + Time + Overheads = Wholesale Price

£4.00 + £10.00 + £1.00 = £15.00

To obtain the price per card you divide the total by 10 and your wholesale price is £1.50. You have to be able to sell the cards for more than £1.50 as you can see that we have not added any profit in the equation.

You can also make a much more complex calculation and this time you assume you make 1000 cards per month, all different designs but taking roughly the same time to produce. Again, please, note, the numbers are just for visualisation purposes and they do not intend to reflect a precise calculation. You can further change them to reflect your situation, i.e. charge more per hour, have more or less profit, add VAT @20% etc. but the principle will be just as outlined below:

What makes your product Monthly Expenses
Production per month 1,000
Labour: 100 hours @ £6 £600
National Insurance + Public Liability Insurance £10.00
Materials: envelopes, cello bags, embellishment etc. £300
Sundries: stationery, postage etc. £20.00
Travel Expenses £20.00
Overheads: electricity, heating, phone etc. £50
Marketing: rent at fairs, brochures, business cards etc. £100
Total Wholesale Cost £1,100
Profit @20% £1,320
Wholesale Price Per Card  £1.32

So, if you go to a craft fair and sell your cards at the retail price of £2.99 you are making a good profit. On the other hand if you sell the same cards at £1.50 to a retailer, so they can sell them at £2.99 you will have to sell an awful a lot of cards to make a viable business.

Hope these examples were useful. If there is something not clear, just let me know, happy to answer any queries.

In the next blog post I will cover the approach of working out your wholesale cost when you know the retail price and also how retailers achieve their retail price. You might be a bit surprised what you will find out.

Best wishes,

SSK Signature