It’s been awhile since my last #scbusiness post and, as a slight change of pace, my next instalment is over on the Big Cartel blog. Learn some tips on what to consider when naming your new project and find out about the origin story of the name Scout & Catalogue – here.
Once upon a time before we had personal computers or had heard about the internet there was a tool in place to help brands sell their products. It was called ‘The Trade Show’. In a time before online shopping and social media these shows were a big F-ing deal. This was one of the ONLY ways for a brand to make an impact on retail buyers which was all the more vital when your only sales channel was through brick and mortar stores. Still to this day trade shows are organized every 6 months and the product shown is for the upcoming season (ie. September 2016 show is for Spring/Summer 17 product). In the past orders were placed at the show and then delivered 6 months later which meant brands only had to have samples ready and could order their production run based on actual sales (this still happens today but with more pressure to also produce goods for immediate delivery). Retailers could feel confident that they were seeing the best brands all in one place at one time because there were few other ways for brands to make a name for themselves. Design reps – people paid to represent brands and book sales – made connections with stores and buyers and played a pivotal role in the fashion ecosystem. Because trade shows were THE vital sales conduit they were able to charge brands a large amount to show at them – as they should have being such an important cog in the retail machine.
And then came the internet.
I know it has been over 20 years of the internet being common place but I still feel like, even today, age old systems in MANY industries are scrambling to adapt to the massive changes it brought. In this case it has delivered the question, ‘Are trade shows worth it?’
My short answer is – I don’t know.
In my previous life as a Creative Director for a fashion retailer I used to walk the shows every 6 months. I hated them. They were large and overwhelming and instead of inspiring me they left me feeling like fashion was raping the world of it’s resources in order to provide us with bootcut denim sprinkled liberally with Swarovski crystals (it was the mid-2000s). Even a decade ago online shopping was barely a thing and so the trade shows were still offering their traditional market service – bringing retailers and brands together in a way that was difficult otherwise. Before online stores photographed product completely for their listings, before blogs recommended brands that inspired them, before social media brought us behind the scenes of every facet of business you really only got to see and learn about a brand through trade shows. So despite my distaste for the scale of the shows I did still recognize that it was necessary to be there and that I was learning about product in a way that was not possible in another context.
By the time online shopping really gained steam and the internet landscape started to shift and become more interactive (remember when websites were completely static like pages from a magazine that were only updated once or twice a year??) I had left my full-time position, moved to Mexico and was starting to sell online myself with S&C. As you all know my brand began as a blog and so, in this new interactive internet age, I was able to generate sales from the comfort of my own home and without the fees involved with travel and shows. Awesome. Then because I had a devoted blog following and an online shop I was contacted by interested retailers that were willing to buy wholesale from me without seeing me at shows at all. Also awesome. ‘Who needs shows?’, I thought brazenly. And I didn’t attend any for a few more seasons.
But then….things changed. Again.
Most of my blog readership now had a bunch of my product and in order to get to my next level of business growth I would need to create more interest and widen my brand awareness. I looked into a bunch of things – PR support, showrooms, event collabs – and finally settled on doing a show. The cost for me was high but I felt like, from my experience walking the shows in the past, there was sure to be a return that would more than compensate for the show fee, travel expenses and my time out of the studio. And so I headed to New York and spent three days on the other side of the trade show circuit – as a brand. I left feeling mixed about the experience and I continue to feel mixed moving forward. When asked if I would recommend doing a trade show I usually ramble a list of pros and cons about the system which I will lay out below in no particular order:
- Since there is now so many ways for a brand to gain exposure and for retailers to buy great product trade shows these days tend to be much smaller than in times past. I really like this because it feels like you are a part of an amazing boutique for three days. There is more likelihood of buyers actually seeing your product when they don’t have to cross a football sized convention centre to find you. This is especially useful if you are hoping to expand your sales network by impressing new buyers as they walk by, dazzling them with your trend relevant product and perfect price point.
- If you don’t live in a retail centre this is a chance to book meetings with wholesale accounts that you already work with (it’s great to meet your buyers in person) or to book meetings with clients that have expressed interest but are a bit gun shy around placing orders before seeing your work.
- This can be a great tool for brand positioning – always make sure to book yourself into a trade show that represents other brands you admire. Buyers will see your work in the same light as the brands you are showing with. In some cases buyers want to see that you have shown at a trade show for several seasons so they can trust that you are a solvent company that will still be in business for years to come and are worth developing a relationship with.
- These days shows compete for relevance with their own marketing footprint and there is a chance they will promote you through their media channels which can be great exposure.
- Hanging with like-minded people – every time I’ve done a show I have met great entrepreneurs who understand what I am up against and are awesome business resources. I also found my factory at one of these shows by just chatting to another vendor about my manufacturing issues which has changed my brand and personal life 1000x for the better. Outside of booking actual sales there is the opportunity to make unplanned connections that set you up for a healthier and happier business.
But also :
- Show costs are expensive. These days orders are RARELY placed at the show itself so after you chat with a prospective buyer you don’t really know if they are going to place an order. When trade shows were the only sales channel between brands and buyers the buyer needed to close the deal at the show but these days, when they can find you and other brands in many different ways, the pressure is off. For some reason shows still charge like they are the only way for people to connect and they are not. When you add travel expenses to cities like New York it becomes questionable as to if your financial return will actually be worth it.
- If you have a solid brand presence online I am unsure that your work in a booth is going to make that much more of an impact to potential clients. You could also just email them to introduce your work or even send your ideal retailers samples instead of paying thousands on a show.
- Traffic is way down – the last show I did there were essentially tumbleweeds rolling down the aisles because – not to beat a dead horse – there are tons of ways for brands and buyers to connect and so the volume of buyers present has dropped dramatically from the shows I attended a decade ago.
- If you are paying a showroom to represent you it can get costly quick and you need to have the extra expense padded into your per unit price. I currently don’t which is an oversight of my pricing strategy more than a con related to a tradeshow. As a side note – if you hire a design rep make sure to hire them with a sales commission term so they have incentive to sell you work and not just party.
And there it is. I just don’t know. I think there are tons of reasons to do shows and as many reasons not to. Like everything – each brand has it’s own unique sales mix and I’m sure for some companies shows are a pivotal business practice. For me it is a little ‘neither here, nor there’ and while they definitely offer value I am unsure if they are worth the large cost associated with them.
I’d love to hear about your experiences with shows – comment below if you love or hate them and which ones you had the best success with….
As much as social media wants us to believe differently running a small business can be isolating. Or at least it has been so often that way for me. Over the last six years, for better or for worse, Scout & Catalogue has mostly been a one-person show. When it is going well there is nothing more exhilarating but when it is, for whatever reason, stalled out it can feel like the loneliest work place in the world. If you have read my #SCbusiness series before you will know that I flat out do not recommend running a business by yourself. Ever. If I were to start this again I would have found a partner to work with and then over time brought on more lovely people to round out the team. Not only does it help to have complimentary skill sets contribute to a project but it also helps to have multiple energy levels push something forward. We are all human and a human being is not a machine. We have highs and lows from year to year, month to month, day to day. When you are the only energy point pushing a project forward it will ebb and flow with your moods and that makes it difficult to run something with stability.
Over the time I have helmed my company solo I have celebrated wins and endured losses. More recently I started to look at when these business successes and failures seemed to occur and almost always they directly related to my personal energy level/emotional well being. If I was excited about Scout & Catalogue you guys were excited. If I was indifferent so were my sales. The benefit of a team working on a project is that, while everyone will naturally vacillate energy levels it is very unlikely that EVERYONE on the team will be up or down at the exact same time. With at least one person always in a positive place your company should be able to maintain a steady energy level and move forward at a stable pace.
So, three cheers to the people that are working in teams but what about the rest of us? Today I wanted to talk briefly about my struggle to maintain emotional health while running a solo project. So many of us these days work as freelancers or from home or on self directed projects and I think there is a real need to talk about ways to help keep our inner worlds healthy so we can preform our jobs to the best of our ability. With my personal energy levels directly corresponding with my sales return this is a topic that is near and dear to my heart and my pocket book. I definitely want to preface this conversation by saying I am not, in any way, an emotional health expert – all of my thoughts on this matter below are from my own experiences and we all have our own vantage point on the world. Everything I discuss in this post is from my own unique perspective.
Very early in my days working from a home studio I noticed that my emotions tended to vacillate a lot more than I remembered when I was in an office environment. My theory is that we are communal creatures and day upon day of being alone is difficult. Office environments are far from perfect but they are a way to build community into our daily life and in that regard I think they are quite valuable. When I began working from home, I struggled to maintain emotional balance but often pushed my issues aside to get through the work I had piling up around me. I decided to work harder instead of listening to what my intuition was trying to tell me. It will come as no surprise to you that working myself to the bone was not the answer. In 2014 I finally made the call to head to therapy and guys, it was AWESOME. Through the work I did that year with my therapist I started to figure out ways to support myself so that I felt less alone, less isolated and less in small business purgatory. Namely, I realized that whether I worked for someone else or myself I needed to get community back into my daily life. Below is a list of things I’ve implemented or am trying to implement as a person running a passion projects on their own. In no particular order :
- Find a shared workspace. Working on a solo project is far less isolating if you are sitting next to 20 other entrepreneurs who are also facing the same challenges you are. Chat it out. Collab it out. Get your network hustle on. Shared workspaces change lives…or at least have changed mine.
- Feel the feels. We spend a lot of energy avoiding feeling negative emotion. Sometimes simply stopping and acknowledging that you feel crappy gives you a sense of relief and possibly even renewed energy to tackle the day. No one feels happy all the time so striving to do so is an impossible goal. Instead remember to enjoy the good times but also to be kind to yourself during the (inevitable) rougher times.
- Stop fighting the ebb and flow of life. We KNOW we will have good days and bad. Stockpile social media posts, new products to launch, collabs to announce for when you are NOT inspired. It is easy to generate content when you are feeling it but so difficult when all you are doing is hating everything and fantasizing about moving to Bali to live a simpler life. Guess what? You will feel just as much happiness and pain in Bali as you do right now so why not give yourself a rainy day media pile to pull from whenever you just CAN NOT anymore. I managed to do this for a brief moment this past Feb/March and the relief I felt being able to pull from a cache of creative when I was feeling anti-Scout & Catalogue was such a gift.
- Exercise. For years people were telling me about the power of endorphins and I would look at them cynically from the vantage point of my couch. Now I am going to tell you about the power of endorphins. A couple of years ago I started exercising on a regular schedule and my base level of happiness is consistantly higher. As an extra bonus my body looks and feels better but it was the change to my inner world that really caught my attention. Added bonus – when I eat healthier I feel better. Making and eating food that is good for you is an act of self-care. But also, sometimes self-care is eating a pint of artisan ice cream in one sitting. No judgement!
- Business groups. Find a group of people that are running similar types of projects to you and get a support group going. Everyone feels alone. Everyone faces the same challenges. Everyone feels better after chatting it out and making connections.
- Working intentionally. This was a big one for me. It is very hard to stop working when you are running a small business. There is constantly something that needs to be attended to and for years I felt like every day I did some sort of business task whether it was my ‘day off’ or not. It got to a place where burn out was almost a daily occurrence for me. Earlier this year I started what I call ‘working intentionally’. I bought a big calendar and I now assign work to each workday. When I finish the task for that day then my workday is over. It has made a massive difference to my emotional well-being and lowered my burn out rate. It gives me incentive to finish my work in a timely manner and it makes the time I have away from my business feel guilt free and relaxing.
- Treat Yo Self. Sometimes you can have every intention in the world to get through your task at hand but you just can not seem to make it happen. Listen to yourself and cut yourself some slack. You work for yourself and what you lose in financial stability you gain in time management. I am HORRIBLE at this and constantly sit at my desk getting nothing done but feeling obligated because I penciled it into my big calendar. But again, we are human and not machines. Sometimes whatever is going on for us does not fit into the schedule. Be good to yourself and allow for unexpected time away from the daily grind. Almost always you will return refreshed and with the energy to do the task at hand way faster thanks to the break you gave yourself.
- Find and cultivate hobbies outside of your job. It will feel like you don’t have the time for this but you do. Do it.
- Reach out. If you are feeling down and it is day three of doing work from home in your sweatpants without a shower and it just feels like life is a mundane and tasteless struggle – call someone. Or leave the house and strike up a conversation with your local postal worker, barista, uber driver etc. Life is better outside. Even if it’s just a 30 minute break. Or one dinner out with a friend a week. Anything to remind you that post shower and dressed in a cute outfit even the greyest days have a silver lining.
- And lastly, if after building in all of this feel good for living your best life while self employed stuff you book a massive client/order and you throw all your balanced living intentions out the window in a fit of getting-shit-done and you end up feeling crappy and then you spend extra time berating yourself for treating yourself poorly when you know better and how could you find yourself AGAIN in total burnout?!?!?!?!?!?!?!?!? Just chill. And take a deep breath and cut yourself some more slack and remind yourself that self care, as with everything in life, is just about baby steps in the right direction. And sometimes you have to take a few steps back on your journey forwards.
I’m curious what you guys do to help create supportive structure in this increasingly structure-less work world? Comment below with your tips – I am always interested in what helps make the daily grind a little more lovely…
My first professional job was as a junior graphic designer in a large branding design firm. This was a long time ago -around the time everyone was first getting email accounts and digital cameras were still too low res to truly be used in common practice. It was like working in the dark ages guys only I am still relatively young and the world has changed so f-ing much over the last twenty or so years it is astounding. But I digress. What I am trying to say is that I used to be in charge of building design language for companies before the idea of brands/branding/curating lifestyles/Kardashians had hit the mainstream. Back then, when I was young and naïve, I would draw up concepts that were driven almost solely from my idea of what looked good, often with very little thought of what these designs might have to do with the company whose identity I was in charge of capturing. I would go into meetings with the sales pitch of, ‘It’s a triangle! I looooove triangles!’ and would very regularly fail to sell my ideas to the client.
These days the idea of ‘telling your story’ is common knowledge but it took me a very long time to realize that as a branding specialist my job was to define, shape and communicate the voice of said brand. Everything changed for me the day I realized that I could view a brand as a person – as someone that is outside of myself whose moods, habits and interests were independent of my own. Really my job was to listen very carefully to who this ‘person’ wanted to be and give voice to it. Now I could go into meetings and say, ‘It’s a triangle! I looooove triangles! This shape connotes energy and ambition which are key principles of your (for example) rock climbing brand.’
One time, in a university creative writing class, I was instructed to choose a character from one of my short stories and put her into various life circumstances. How would she be while in Paris? Riding a skateboard? At a job interview? The exercise was a way of getting to know your fictional character better so that you could write a truer, more fully formed person into your story. You may never need to put them on a skateboard for the sake of their character arc but it’s good to know what they might do with it given the chance. I like to apply this same exercise to brands.
For every brand I am in charge of I take a moment and think:
How old are they?
Where do they live?
How did they grow up?
What are their interests?
What does their home look like?
Who are their friends?
What do they look for in a partner?
What other brands do they love?
Where do they eat out?
If given a skateboard what would they do with it? Just kidding. Sort of. (If Scout & Catalogue were on a skateboard she would kill it because both she and skateboarding were born and raised on the west coast and I have a feeling she is a secret tomboy at heart.)
And onwards. I like to get to know the brand as deeply as I can.
To be clear – you NEVER need to tell anyone else all these aspects of your brands character but they will help you get closer to your company’s secret sauce. If you know that your brand would pay more to shop local labels in boutiques then you can confidently incorporate ethical manufacturing into your operations. If you know that your brand is in their thirties and they have kids then maybe you will focus your attention on building the best online store possible because you know that mother’s don’t have time to shop and would love, instead, to receive amazing goods on their doorstop. If you know that your brand likes to party then you will know to buy more sequined inventory than waxed canvas goods.
This technique has been VERY crucial for me with Scout & Catalogue which started as a self directed, personal project where the brand and myself were very nearly indistinguishable. S&C has, over time, morphed into a company with a character unique unto itself. The more I can understand S&C outside of my own likes and dislikes the better business and brand decisions I can make for it’s success and growth along the way.
I keep this odd exercise in a document I can review and add to as time goes on. I think brands change and grow and much as we do and it’s important to keep this a living piece of brand management that is not too precious or carved into stone. It is a vaguely ridiculous act – to invent a ‘person’ out of thin air and then be it’s voice to the world – and I think it’s important to not take it too seriously while you are attempting to figure out what your company might do when taking dance lessons in Brazil…
I just had a very challenging 2015 with Scout & Catalogue. A perfect storm of things happened in my business and personal life that put S&C at risk of going under and it has only been through very slow and careful planning that I am still in business today. Life is all about learning and that is never truer than when you are running a small business.
One of the things that came to light in this time was my pricing strategy. Or really, lack thereof. But before I get deep into thoughts on pricing – I have two quick things to mention at this time :
- It is exceptionally hard to price your own work – I have the (very common) tendency of not being able to see the true value in my own creative vision. If you are similar I suggest you invite a few friends over, open a bottle of wine, and get them to tell you how much they would pay for your pieces retail. I’m telling you – the numbers will astound you.
- I am a very firm believer that we should all follow our passions. That being said our consumer market has created perceived values on different segments of the retail world. This means that your ability to mark-up your goods will be different depending on what you are trying to sell. It is astounding to me how little people are willing to pay for quality produce and how much they are willing to pay for lipstick. So, the lesson here is – 100% follow your passion – whatever that is. BUT if you are someone that is passionate about SEVERAL segments of the retail market do a bit of research and choose to create your business around an area that is valued highly by the consumer market.
I did not do this. Six years ago, in Mexico, I very organically started to dye fabric. It brought me joy. I also started to fiddle around with designing jewelry. It also brought me joy. This is of course a generalization, but the perceived value of jewelry is higher than textiles. I have definitely had moments of regret over my decision to work in a medium that is high on labour and low on return – not because this venture hasn’t been fulfilling – but because I was passionate about both and anything that makes turning your passion into a business easier is well worth taking a second look at.
Just to be clear – I do not suggest you start a business you care nothing about just because you can see it has high market value. You are going to be spending almost every waking hour thinking about this project so you really need to love whatever it is you are building a business around. So choose from your heart but also let your head review it before you jump 100% in. This is probably true for every aspect of life and a step I am guilty of ignoring time and time again.
So first things first – figure out your cost of goods (otherwise knows as COG). You have created a product and it took a certain amount of your time ($), your manufacturers time ($), your hard costs in materials ($), the shipping of getting said materials to your manufacturer ($) etc. All of these things add up to what it costs you to produce an item. Work it out. Work it out as clearly and deeply as possible. For the longest time I never put a value on my own labour. That was back when I was doing all of my own manufacturing and I was valuing my goods on the material costs ALONE. When I started to get carpal tunnel from so much manual labour I searched out a small factory to help me produce items for S&C. It was (and continues to be) AMAZING – for my body/my soul/quality of my product – but it was (and continues to be) SO challenging from a profit perspective. All of a sudden I was paying someone for the time I used to put into each item – a cost I had previously factored at zero dollars. I had built S&C on a false economy and sh*t got real very fast when I had to factor in the true cost of labour – items in my line doubled and in some cases tripled their COG. I learned the hard way that knowing the true cost of every item in your line is pivotal to creating a stable business resulting in profit.
So next thing – you now know your true COG. Congratulations! Next you need to look at your competitive landscape in your retail sector. So many things come together to give a brand it’s worth so it’s pretty hard to talk about pricing strategy without also talking about the brand strategy/marketing strategy/all other strategies required to get your business rolling. For example – the high end bag market. There is no doubt that high end bags are made with quality materials and craftsmanship but there is zero chance that a leather bag is ACTUALLY worth $3000. Instead when you buy a $3000 bag you are purchasing, most notably, the BRAND ITSELF and what the marketers of said brand have convinced you that their brand stands for. A brand strategy is necessary to have before you write your pricing strategy (and really before you write any of your strategies – a brand strategy is the raison d’etre of any business and you need it first and foremost to use as a guide through all subsequent decisions) so you know where you are trying to land in the market. I consider S&C to be a part of the ‘maker movement’ – quality goods, manufactured ethically and relatively close to home – and so I follow other brands that I consider to be in the same category.
After looking around at what other companies in your market are charging for their goods you will have a feel for what price range your item needs to fall within to stay competitive. Next take your COG and multiply it by, at the very least, 4 (and in all honesty 4 is very modest and most brands are multiplying by much higher numbers. Every industry/product has it’s own ideal price margin. Items that sell at higher volume have the luxury of needing a lower profit margin. For instance, having 5% profit margin on a nail is A-OK because people need/use/buy nails in bulk ALL DAY, EVERY DAY. Having a 5% profit margin on a hand dyed tote bag would be a disaster). This multiplication should accommodate all the other costs involved with running your business outside of the COG and give you a profit margin so you can pay yourself and re-invest in your company. Does this number land within the retail price window that your competitors are sitting in? If you reduce this number by half to sell at wholesale are you still making a profit? If so – success! If not – you may need to revisit some of the decisions you made in the design/materials or manufacturing of your product. Again – this is not a universal truth (in pricing strategies there are no universal truths) and maybe you have the magic touch of being able to sell a product well over the existing market price because your brand management/strategy or product is on fire and demand is through the roof.
So that is how you might look at it item-by-item BUT – and here is the next layer – a brand is not (usually) a single item. It is a whole story and you will most likely have multiple products with which tell that story. So now that you know your COG by item and you calculated what you SHOULD charge for each piece it is your chance to shape the pricing strategy of your brand as a whole. Every brand should have a few core items that they are known for, that sell well for them and that have a decent to great profit margin. In retail – core items are most often a classic item (the perfect t-shirt) or investment piece (that great black leather bag you will use for years). Core items usually appeal to a very broad market (which means many people will be interested in purchasing them) and because they are staples their design will not have to change much (if at all) over a series of seasons which means you get the most bang for your development cost buck. It is common for retail brands to make most of their money from just 2 or 3 products and have everything else they sell be loss-leaders – a term for an item that is exciting enough to grab a customer’s attention but may not have a very big profit margin (or no profit margin at all) in order to guide them towards buying a company’s core item(s). Knowing what you should charge item-by-item doesn’t always mean that that is what you end up charging for said item. In some cases you will charge more than you need and other times less – making sure that when all is said and done your brand’s pricing puzzle will still net out profitable at the end of the day. It is a truly creative process and in this post I have only just lightly touched on things you will want to consider to get you to the right balance for your company.
Also – as always – there are many, many business experts out there that know more about this stuff than I do. I would encourage you to head to your local bookstore and grab a business book or two that more thoroughly moves through this and other aspects of business. In writing this post I realized I am not really laying out a linear business building path with the #SCbusiness series but instead writing things as they are occurring to me or coming up for me in my own business. I will continue to jump around (for instance – I am very passionate about brand strategies which come way before a pricing strategy) throughout the series but if you feel like there is anything you would like more clarity on or that I have missed please comment below.
Good luck out there!
One of the (many) things you will want to consider when you are starting out is your sales channel(s). Speaking from the world of fashion accessories I like to think of my sales opportunities as a triangle – one corner represents direct to customer sales via my online shop (or brick + mortar if you have one), another corner represents selling my goods wholesale to retail clients, and the last is for ‘other’ whether that is gift-shows, pop-ups, collaborations with other artisans or media outlets etc. While it is very normal to have one of these corners more developed than the others (for example S&C is dominantly direct to customer sales with a healthy dose of wholesale accounts and only a smattering of ‘other’) it is important for a company to have representation in all three corners in order to mitigate risk and work from a ‘balanced’ triangle. No one wins when all his or her eggs are in one basket.
For the first 3 years of S&C I sold 100% direct to customer from my own website. This is a terrifying business strategy for the obvious reason that not being able to count on any additional streams of income makes any downturn in direct to customer sales a massive issue. And guess what – this totally happened. When I first started my business the world of ‘makers’ was far less crowded. It took very little effort to be noticed online and with hardly any competitors in the market I was able to produce whatever I felt like and have confidence that I would be able to sell it successfully. But, as is the way with capitalism, more and more people started similar businesses and soon my online voice became one among many. In order to stay relevant I had to increase my marketing budget again and again. I was now spending triple or quadruple in marketing costs to get the same return from my online site as I had in years past and I was, for very good reason, nervous about not having any other sales channels. In 2012 I started to work with retail clients – selling goods in higher volume at wholesale prices. I had always turned away from wholesale because it reduced my profit margin substantially but soon I realized that the more diverse sales opportunities I could create for S&C the more likely I would still be in business as retail trends ebbed and flowed around me.
Knowing what magic sales channel ratio works for your business also helps you allocate your business expenses correctly. There are very different product development, marketing and logistical issues/opportunities for each of these categories and most likely, as a small business, you may lack man hours or cash flow or both to do address all three of these opportunities at 100%. You will want to focus where your skill set shines and translates into the most sales. As you plan your particular special sauce of success here are few things (far from a full list) to consider:
Direct to customer / Online and/or Brick + Mortar
+ So much profit margin! Being both the brand and the retailer means you are getting the most $$ out of your product
+ So much hassle!! Don’t forget that selling your own product means that you now have to deal with all of the struggles of marketing, customer service, shipping and distribution, store or studio rent etc. You are definitely earning that padded profit margin
+ But seriously – shipping is the worst. Shipping a box of wholesale goods to retailers pales in comparison to packaging each individual customer order with love and care, taking it to the post office, managing clients expectations as they wait for their item to arrive, dealing with customer service issues, returns, and then doing it all over again……every week. I have the extra boo-hoo of being based in Canada with the majority of my customers in the US – this adds customs hassles to my list of shipping grievances.
+ Marketing – are you or someone you know great at generating brand content for social media channels? Hopefully yes. Do you love creating events to hold in your retail shop or designing the best store windows? Hopefully yes. Do you love wrapping up individual items with love and care, writing notes to thank people for contributing to your small business? Hopefully yes. What about fashion shoots? Into it? In the absence of a brick and mortar shop, interest in your products will be dictated by how you choose to shoot your work. And the list of daily marketing tasks goes on and on…
+ Designing your product on any schedule you choose. If you control the sales channel and are making money doing so – who is to say when you release an item or collection? You do you.
+ Product feedback. It is awesome to have direct access to your buying public – you learn from them and figure out how to serve them better.
+ So much ease! You only have to make an amazing product – all of the customer service is left to the retailer. Such bliss!
+ 50% (at least) less $$. Sad face. But hopefully you are booking high volume orders where the smaller return per unit is balanced by selling way more product (this is the ideal with wholesale)
+ Brand management – make sure you like the stores that carry you – people will see your stuff in said stores and their brand influences how potential customers think of your brand
+ Sales calendar. Most boutiques (in fashion) still run on a traditional calendar. That means they want to book their seasons 6 months in advance. This means you need to be working on your collections at least a year out. I have never managed to get myself onto the fashion calendar and I have lost out on great wholesale accounts because the buyer had allocated their money 6 months before my collection was ready to view/sell.
+ Factor in the cost of heading to tradeshows, having a showroom, hiring sales reps etc. to your price points
It’s hard to talk specifically about the pros and cons of the ‘other’ corner as this category is so varied. I have found success and failure in various gift shows, pop-ups, collaborations, giveaways, events etc. and I think it is a matter of testing a selection of these options and seeing what gives you the best return.
One last point on my triangle theory – it will shift and change as your company and the market change around you. Your secret sauce recipe from 2011 may not be relevant in 2015. Take some time each year to revisit your sales channel formula so you can better steer your company through the world’s ever-changing retail trends.
There is no doubt that ‘entrepreneur’ has become one of the most covetable job titles in popular culture these days. Shaking off the difficult boss, running a self directed project, the potential of making more money than any 9-5 position could offer – all of these things sound amazing. What is seldom talked about is how often and how much running a small business can suck. The insane hours, the poverty level income (at least at the start), the consistent and terrifying leaps of faith you take as your business finds it’s place in the market, the isolation of working on your own to accomplish your goals. Starting a business is no small endeavor and, not only that, running a business often has nothing to do with the product or service that called you into action in the first place.
One of my favourite questions I have been asked (although by that time I was 3 years deep into S&C so my ship had already sailed) was, ‘Where are you happiest in your business – the creative work or the business work?’ The implication being that if you are deeply passionate about the ‘it’ of your business – you get lost in the craft of cooking, brewing a perfect cup of coffee, designing the most ergonomic chair, or any other product or service that rocks your world and you are currently thinking about developing a business around – you may want to think twice about forging out into the lonely world of entrepreneurship alone. Contrary to popular belief, creative genius alone does not a successful business make. In order to have success in business you need to have passion about BUSINESS. You need to get jazzed about writing business plans, pitching ideas to potential investors/partners, delving into market research, developing systems that allow your company to grow and flourish, promoting the work, closing deals – all those business buzz words – you need to LOVE them. This is a huge generalization, but most creative types are not also skilled with excel spreadsheets or firm handshakes.
Before you dive headfirst into your own venture I would recommend looking deep inside of yourself and honestly asking where your passion lies. I still do this on a regular basis. I am someone that is decently interested in business but my true love is, and always has been, the creative. Almost all of my disappointments with S&C over the past 6 years have come from only having one eye on the business road while the rest of my attention was spent watching the gorgeous ‘creative vision’ sunset out the side window. As someone that took FIVE YEARS to start looking at the balance of skills it takes to run a successful business more closely I would highly recommend setting yourself up properly from the very beginning. Luckily, for everyone out there with talent and drive I have a very simple recommendation for you:
Simple but effective.
Broken down into steps it would look something like this:
1) Dream what your business will become. Think as big as you can. Think 1 year out, 5 years out, 10 years out. Really get into this. What are you selling? How much money do you want in your life? What size of company do you want your business to grow into? Where do you want to live? How many hours a week do you want to work?
2) Look at what you have to offer this company. Where is your passion? What are you better at than anyone else? Be honest. Look at what your weaknesses are. What work do you avoid and put off until tomorrow? Be honest.
3) Find someone who is strong where you are weak to partner with. While you’re at it find a few people to partner with. If you have a great product but no idea how to set up your business framework – there are tons of people out there with business degrees and a passion for start-ups. If business is your thing but you’re stuck without a ‘big idea’ – there are tons of people out there with great vision but no idea how to translate it into reality. If crunching numbers is your passion but the corporate world seems staid and predictable there are tons of people out there with dicey books that need keeping and vastly varying year ends to be organized (seriously though – good small business focused accountants and bookkeepers – where are you? There is a hole in this market that is crying out to be filled). You get the point.
If partnership doesn’t feel like the right avenue for you (I don’t have one) then I highly recommend bringing on consultants. One of my biggest regrets is not building an effective community of people to help me run S&C from the very beginning. I thought I could do it all. Guys – I could not. Not only will your partners or consultants balance out your skill set and give your business a much better chance of success but your process will be all the more enjoyable along the way.
One of the best books I have read on this topic is ‘The E Myth Revisited’ by Michael E. Gerber. It is a cheesy read but it gets straight to the point and I finished it feeling clearer around how I wanted to think about my small business in relation to my skill set.
On a side note : I wanted to say thank you for all the positive feedback about this series! I started to reply to each comment question individually but for some reason the internet ate my responses and all trace of my answers seem to be missing. Maybe one day they will reappear? I have no idea. On top of that – answering each question individually was taking a ton of time so I think how I’ll move forward is to (happily) read all your comments and then work to answer the most asked questions in this blog series.
To make a short story longer – thank you for your comments / I read every one of them / I will use them to guide my content for this series moving forward / the internet remains a mystery.
‘Oh, me? I have my own accessories line. It’s nothing. I started it by accident.’
It’s no secret that Scout & Catalogue began six years ago on the rooftop patio of my small Mexican home. I was taking a break from my life in Canada and had immersed myself in a new culture, language and climate. I began writing this blog to keep friends and family up to date with my life and at the same time started to experiment with textile dyeing and sewing as a personal project. Online shopping was just taking off in 2009 and more and more people began reading my blog and requesting my goods – Scout & Catalogue the brand was born.
But the Scout & Catalogue of today is no accident.
I’ve been thinking a lot lately about my compulsion to answer the, ‘What do you do?’ question in this way. While the birth of my brand came about organically the fact that I am still in business six years later is not by simple luck. Scout & Catalogue is still around today because I work very hard to keep it that way. Shrugging off my brand as ‘just an arts and crafts project’ is a disservice to myself and the company I have built.
Before I started S&C I used to be a Creative Director in the fashion industry. One of my passions in this role was working out how the intuitive and slippery creative spark could succeed in the more rigid and controlled world of business. Bringing creativity and business together is no easy task but, for all the inevitable tensions, I find connecting them very satisfying. I think this is why I like running a small creative business – in my role as Owner and Creative Director I am responsible for both creative and business strategies and perfecting the right balance between craft and commerce is a constantly moving target.
This blog has always been about giving you a behind the scenes look at the creative side of S&C and I thought it might be time to share some of the business aspects of running the brand as well. I had zero experience with what it took to run a business before starting Scout & Catalogue and every day I learn new things (side note : ‘learning new things’ in my experience almost always means ‘I made a mistake that cost me/the business a lot of money but now I know to never do that again’) about what it takes to keep this ship afloat. In regular installments I’d like to explore what it takes to run a small company, things I wish I had known before I started this whole thing, setting yourself up to succeed (spoiler : I almost always take the hardest path possible) and much more. If there are any business topics you are hoping to hear my thoughts on please let me know in the comments section!
I have talked about the ‘triangle’ of sales channels in a previous #SCbusiness post and briefly outlined how important it is to have a range of sales avenues – namely, direct to customer via your own online shop/brick & mortar, wholesaling to other boutiques and then ‘events/other’ – in order to keep your business in stable financial health. Usually, despite aspirations for sales channel balance, a business will largely focus in one area of the sales triangle – creating a certain mastery of what is needed to facilitate business in that area before they move on to another sales platform. As is the case with S&C where for years I have focused on direct-to-customer sales through my online shop and have only been carried in a select group of boutiques. This was a natural solution for me because for the first 4 years of my business I handmade every item myself which made getting volume in manufacturing up to a place I could reasonably wholesale almost impossible. But that is no longer the case! Thanks to the help of my factory volume is no longer and issue and this season will be the first one where I am actively looking for new wholesale accounts. This is where I would love your input : where in your hometown would you love to see S&C being sold? It’s impossible to keep up with all the great boutiques popping up across the US and Canada so I would love to hear your thoughts on where you love to shop. Please send along a store recommendation via the comment section below or DM me on instagram or twitter your city and the names of your favourite shops so I can reach out to them. If a wholesale connection is made thanks to your recommendation I will send you a little something-something as a thank you for connecting us!
I spent the last 10 days in Toronto doing the One of A Kind show and was lucky enough to spend some time at Casa Bonita – a rough stone cottage about an hour out of the city owned by lovely friends who also happen to be window display artists. I could not do this show without them. I just got home today and have a new #SCbusiness post scheduled for *soon* – I promise.