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

 

 

Trade Show Season Is Open – Where Will You Go?

 

SABIVO Design Top Drawer 2014

Trade show season is now pen and with so many tightly squeezed in two months there is so much to think about, whether you are an artist or a retailer. So, I decided to do a little round up of the most important ones in the UK and some abroad.

Everybody from the supplier side of retail knows that Christmas is the golden time for retailers (sometimes accounting up to 20% of their business) and January and February is the Christmas time for suppliers. In the greeting card and gift industry the Spring Season is when everybody shows up their sleeves their most exciting everyday designs, i.e. the products they are going to sell throughout the year. In order the suppliers to meet the retailers, ‘trade only’ shows come into place. They would normally be attended by buyers from department stores, multiples, mail-order, online, tourist attractions and independent retail outlets.

First up is Giving and Living, down in Exeter where 500 companies display their products to around 7000 trade buyers.  The show has strong coastal and tourist feel and this year it runs 11-14 January 2015.

Next one is Top Drawer, which sees over 800 leaders in UK and international design, who are all pre-selected for only the best suppliers, the ones combining great design with commercial acumen. As it is located in London, it attracts strong following of trendy, design-led retailers and upmarket galleries and luxury multiples. This year it runs 11-13 January 2015. You have now guessed right that as an exhibitor or visitor, unless you have several employees, you can’t possibly exhibit at both shows mentioned above.

We launched our publishing business at Top Drawer in 2013 and it is said that you never forget the first of everything. It is certainly true, we had an absolutely amazing show!  This was our stand when we just finished setting it up.

SABIVO Design Top Drawer 2013

Wales is also running its own Welsh Trade Gift Fair (Llandudno) from 18-21 January 2015 but at time of writing there are ~40 exhibitors, so my best guess is that it is suitable for the welsh market only and not a massive one.

The Scottish Gift Trade Fair is in Glasgow and this year it runs 18-20 January 2015 and is heavily influenced by all things Scottish, as you can imagine. Over 500 companies exhibit thousands of products  across 3 areas, so if you love to design and make puffins, tartans, shortbread etc. around 5000 trade buyers will hopefully see them.

Undoubtedly the biggest trade show in the UK is Spring Fair, at the NEC in Birmingham and it’ll be in a couple of days running 01-05 February 2015 (the image at the top of the post is our first exhibition at Spring Fair in 2014). It is massive as 3000 exhibitors would be there and the show normally attracts 70,000 retailers (from the UK and abroad), so if you have missed the other shows, this one is definitely not to be missed. The show is famous for having anybody and everybody as there is no pre-selection criteria, which makes it very easy to enter the exhibition arena. We will be returning again and if you are reading this post and planning a visit, we would love you to pencil stand 4J05.  Until then, this is our show profile and we hope you like what you see.

If you would like to venture across the pond good ones are NYNow in New York, Mason & Objet in Paris and Paperworld  in Frankfurt.

Hope this post was helpful for your planning and in the next one I will round up the new ranges we are showing at Spring Fair.

Best wishes,

SSK Signature

Why Go To The Ladder Club? – Part 2

 

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Photo credit: Jim Bullough

It has been more than a week since I attended the Ladder Club for new greeting card publishers. I posted earlier what was all about but if you have not had the chance to read the previous post, you can read it here. The list of the speakers also gives you a good insight of what was covered on Day 2.

The networking dinner was wonderful and I had a chance to meet people I already knew as well as new ones. At dinner I sat next to Lorraine from Rush Design and Henri Davies, former National Trust and WHSmith Buyer and currently a retail consultant. I had interesting conversations with both of them but had a proper giggle with Lorraine. We’ve discovered that we are both self-taught artists and somehow entered the world of greetings with the similar idea of ‘how hard can it be to design a card’ (more on that on another blog post). I was also looking forward meeting Lynn Tait of the Lynn Tait Gallery. She is the heart and soul of the Ladder Club and true inspiration, both personally and professionally. The food was lovely and all in all, a fantastic evening before a full day of talks that were to follow.

I thoroughly enjoyed the seminar day, which was packed with valuable information, although drawing from my previous experience in fashion retail and buying, there were not many surprises to what I have heard. But I still found it good to compare similarities and differences. My thoughts are, if you have never been in business and all your life have designed or created lovely designs and products, the seminars will be eye-openers.  I wholeheartedly recommend attending the first and the second day. As a bonus, you can also join the Ladder Club Facebook Group Page. There are some wonderful discussions going on and you can ask even more questions or what was not clear on the day even after the seminars.

So, best of luck with your future venture in greeting card publishing. Hope to see you soon at some of the trade shows and if you go to the Ladder Club, do not forget to pop a little badge on your website and tell everybody that you have attended one of the very special clubs in the world.

The Ladder Club Logo1

Best wishes,

SSK Signature

 

What is the Ladder Club For Greeting Card Publishers? – Part 1

Ladder Club Logo

Every year, new greeting card publishers head for pilgrimage down to Westcliffe on Sea. You may think that is a strange time of the year to be enjoying the seaside, but the salty air and pretty coastal views are just a bonus. We, including me, all go for one reason, to attend the annual Ladder Club seminar. If you are after greeting card publishing and do not know where to start, this is the event to attend, preferably before you start the ball rolling.

The seminar is a crush course that runs over two days and is organised by Lynn Tait of the Lynn Tait Gallery. The first day, Getting on the Ladder, is for those who consider such business venture. This year is on 4th November 2014. There is a networking dinner the night before and is valuable as the attendees will get to meet each other and the speakers before the seminars.

The second day, Climbing the Ladder, is for those who have already embarked on some kind of business venture: have attended the first day of the seminar (usually advisable the year before), exhibited at least at one trade show, have turned at least £3000 etc. This year the second day on Wednesday 5th November 2014 with networking dinner the night beofe.

The schedule for the second day is super tight and there will be speakers as follows: Sharon Little – Chief Executive of the Greeting Card Association, Jakki Brown – Editorial Director and Co-Owner of Max Publishing, Progressive Greetings magazine, Claire Williams and Karen Wilson – Co-Founders of Paper Salad, Miles Robinson – Co-Owner of House of Cards, litho printing Simon King of The Sherwood Press, digital printing Bob Short of The Imaging Centre, envelopes Julie Brightley from Enveco, paper board Mark Jessett of GF Smith, Jeremy Corner – Managing Director of Blue Eyed Sun, Chris Houfe – Sales Director of GBCC and Waterwells, Henri Davies – Buyer of the National Trust and consultant.

The cost for each seminar is only £48, including lunch and refreshments. The seminar dates are usually announced in Progressive Greetings magazine, word of mouth, once you join the Greeting Card Association or you can register your interest by contacting Trudi or Pauline on 01702 480180 or email waiteandtaitbakery@hotmail.com. Places are booked quickly; I have missed the Ladder Club for 2 years, so it is strongly advisable to book as soon as you are certain it would be of interest to you. I hear not everybody continues with their originally chosen path and I think it is a great idea to get answered tons of business questions, learn publishing specifics or obtain invaluable industry knowledge for a very small cost price.

So, this is part one of the Ladder Club post and I shall update wih my views on how the seminar has actually been. It may be November and a bit chilly outside but I have packed my sunglasses and I am heading down south to the sea. I can hear the waves now…

SSK Signature

Should I Blog Or Not?

Hand drawn computer

Welcome to my new Blog. My name is Sabina and I, together with my husband Ivo, run SABIVO Design. We publish beautiful handmade greeting cards and trust us, it’s not just us saying it.

I did have a blog before and I was guilty of the common crime ‘blog to promote your own work’. I was exploring my creative side and thought to document it via a blog, but I got bored of myself pretty quickly. I blogged without purpose and I blogged because everybody was saying I should blog. However, I don’t follow orders very well, so I intentionally stopped blogging for some time. Surprisingly to me, people were following my posts and none of them were my friends, so forget the sympathy vote here. Apparently, I had something to say and it was interesting for people…I remembered that but I also had to see what the point of it was as my primary cause for blogging was not to make a blog that would generate revenue. It was mainly to raise my voice or share my own opinion and hopefully find likeminded people to have a good discussion and banter.

During the time I was not blogging I started my own publishing business (together with my better half, of course) and was building my own brand…dare I say so…Having arrived at the self-employed point through professional cross-roads of science, fashion retail management and fashion buying (we can get into details of this eclectic mix at another blog post) there where so many practical things I knew about business and also so many I did not know. Typically to all start-ups, I joined several organizations, attended business courses, gazillions of networking events and generally embraced the learning curve that all new businesses go through. The sole purpose was to ‘get out there’ and also having never been self-employed, to learn ‘best practice’ advice from the wise people in the big business world. As the time went by, most of the advice did not make basic business sense, not because it was wrong, but because most of the business advisors I was seeing have never run their own business or if they did it has closed down and they were not happy about it (had it closed down and they were happy about it is a different matter). The advice was passed to me with the best intentions but it was backed by scholastic graphs, theoretical assumptions or based on old-school sales techniques. It was not based on current business/economical climate, therefore it’s implications were not viable. Most importantly, it was outdated, it has not moved with time. I may not have degree in business but I do have bags of ‘real-life’ experience in retail and buying. I have spent considerable time on the shop floor and in the Head Office for both luxury and value retailer. I have also worked in academia and science and my professional path spans 17 years that I have worked for private, public and government organisations and in three countries. This puts me in a comfortable position with product development, costing, negotiation, merchandising, logistics, marketing, selling, promotions, customer service etc. I have also written research projects, scientific papers, spoken to international audiences, tutored students and won several educational and research awards. Having said that, I urge you to not take my words in this blog for granted, I am not an expert. Question me, doubt me and if you disagree with something, just let me know. But I do think I have commercial head and general business sense. The latter being the only message I was not getting well when I started – common business sense.

It is time to point out that among all business people I have met there were/are people who were/are like gold mines. They are knowledgeable, professional and happy to share their experiences in order to help. I have either stumbled upon them by chance or have actively searched for them and reached out. My advice to you (and I generally refrain from giving advice) if you happen to come across a ‘gold mine’, keep it and treasure it. Like all gold mines, it is rare, so make sure you recognise it once you face it, keep it and cherish the gift of knowledge that it passes on.

I have also ventured into mentoring activities through various organizations, so I do help with business advice. I do help even total strangers who get in touch with me through LinkedIn (when they see that I am a Mentor) and fire up their questions. People often ask me whether I have a blog to share my ideas, some step by step tutorials etc., which puts me back into the ‘should I blog or not?’ dilemma.

As the years went by it did make sense that I start my own blog especially as all blog and SEO gurus were singing the same song – how a blog can help a website visibility. However, the reason I found most exciting is actually the fact that I can share some ideas and potentially ‘talk’ to audience that I generally don’t have despite the whole social media hype (you can find SABIVO Design in most social media handles as ‘sabivodesign’, I am usually behind it). The reason is because our business operates as a trade supplier rather than retail outlet, although we have a small selection of greeting cards for our retail customers on www.sabivo.co.uk. We supply quality shops, department stores and boutiques throughout the UK and in mainland Europe. Often communication is just business related and I feel that I sometimes lose the human touch. I feel that a blog will be a fantastic way to reach to people with common interests and start discussions that you as a reader will be excited about, would love to read and/or participate.

This blog is aimed mainly at artists, not just because I am part of a creative industry. Along the way I have found that artists are actually the breed of people that generally lack business sense and even when offered business help their hearts just start beating in despair (sorry guys, no offence, but you know what I mean). This blog will hopefully de-mystify some aspects of staring and running a creative business. It can also be used by retailers as I have a soft spot for retail and love taking photos of visual merchandising and display. So, there will be hints and tips that owners of small independent shops without prior retail experience can use. I will blog a mix of common business sense, real-life examples from our first years in trading, interesting/useful knowledge, experience, some general stories or ideas I would like to share. I hope that you can use them to excite you, inspire you, help to accomplish things otherwise you couldn’t with your regular career or typical start-up. If this changes your life even in a smallest way, then I will be pleased immensely and my job will be done.

With very best wishes,

Sabina