COGS and COSTS

img_4652-1I was recently presented with the opportunity to sell some of my amigurumi’ s and children’s clothes and blankets at a farmer’s market. Most of the venders at the market were selling produce but there were a few craft vendors so I decided to join them. I would like to tell you about my selling experience and what I learned from selling my wares.

First off, I do not want to start a crafting or sewing business. Crocheting and sewing is my hobby. It’s what I do with my down time to relax. But, with that said, supplies are expensive. Yarn and fabric cost money. So, I decided that I could sell some of my amigurumi’s and children’s clothes to help pay for the supplies to make more.

img_4645I have thought several times before about selling some of the items that I have made, but every time I looked into the cost of doing so, I stopped there. I could set up an online Etsy store, but with the many amigurumi’s already being sold on Etsy, would I ever sell anything? Plus if I did sell something could I charge enough to make enough money to cover the cost of the store and shipping costs along with the cost of supplies to make the items? I could sell my items on eBay, but once again, after paying eBay and PayPal fees plus the cost of supplies would I make any money doing that?

Over the years, I have thought about selling some items at craft fairs, but once again, the cost of the booths stops me. When I asked how much a booth would cost at most craft shows, I was quoted between $75.00 and $125.00. That was too much for me. I did not believe that I would sell enough items to even cover the cost of the booth at those prices, let alone the cost of supplies.

img_5484You will notice that I never include the cost of my labor to make the items in my questions above. I learned long ago if you make around 50 cents an hour for your labor to make your crafts, you are doing quite well. Because of that I didn’t bother trying to include the labor portion of my cost of goods sold into the equations above.

When I talked to the manager of the farmer’s market, she said the cost would be $10.00 for the spot for the season plus 12% of my profits. That did not seem like too much to me, plus rather than laying out money up front, the cost was based on what I sold.

img_4647If I sold only a little, then they only got a little of what I sold. This sounded great, but, of course, there was a catch. I had to have my own tables and a canopy. I did not already have these things, so I would have to purchase them to be able sell at the farmer’s market. Luckily, I found both folding tables and a canopy on sale, but the cost was still about $100.00.

This initial startup cost almost stopped me from selling at the farmer’s market but after some thought, I decided that these were useful purchases, and could be used for other purposes other than for selling at the farmer’s market. Folding tables are always useful and nice to have on hand, and the canopy could be used in the back yard for holidays and family events. Plus, if I sold multiple weeks at the market, that $100.00 cost could be spread out over several weeks of selling.

img_4648Of course purchasing the tables and canopy was only the first step in getting ready to sell at the farmer’s market. Next, I had to figure out my COGS or the Cost Of the Goods I was selling, and then based on that number determine what I wanted to sell each item for. I decided to price my amigurumi’s based on size, complexity, and cost to replace the supplies to make the same amigurumi again. The clothes and blankets were harder to price but eventually, they were priced based on style, embroidery, and size.

Since this is my hobby, I did not calculate the cost of my time to make the amigurumi or the clothes. If I had added the cost of my time into the price, I would have priced myself out of the market and no one could have afforded what I was selling. So, luckily, I was not expecting a wage from my wares.

img_4649Selling at the farmer’s market was not easy or fun for me. I knew that I could not just sit on a chair by my tables of goods and people would walk by and throw money at me. I knew I had to sell my items which meant selling me, the creator.

Why would some one pay good money for what I had made?

I had to show and tell them why they would. I had to tell stories about my item’s creation. I had to express my love and concern that each of my amigurumi have a good home. I had to make small talk and entertain my potential customers and hope that my efforts were not in vain, and that someone would be interested and buy my goods.

img_4650This was very difficult for me. I had purposely over priced my items a little so that I could bargain a little with people, because everyone loves a deal! So, when it came time for people to get out some money to pay me or they seemed to not really be interested in what I was selling, I would offer them a lower price. This ended up not being a good selling practice, and it did cost me some money.

I really struggled with this, especially before I had made the first sell of the day, or when too many people had walked by without showing any interest in my goods. I can’t say that my selling techniques improved much over time, but luckily the husband was with me and he helped to keep me in check as well as to help with the selling of my items, especially on the rare occasion that I had multiple customers at the same time.

img_4651I learned very quickly that my amigurumi’s caught people’s attention and they would stop and look and sometimes buy, but that they had no interest in my handmade children’s clothing and baby blankets. In all the weeks that I sold at the farmer’s market, I only sold one blanket and one child’s shirt (which was sold at a deep discount).

I sold at the farmer’s market for a couple of weeks, and each week I sold a few items, but I decided that it was not for me. First, people did not come to the farmer’s market to buy a teddy bear or a little girl’s dress. They were there to spend their money on fresh tomatoes and peaches. What I was selling was an after thought for them. Next, I had to spend my precious days off selling my items at the market.

It was a full day event since I had to be there early enough to set up the canopy, tables and my goods before the market opened and I had to be there until the market closed. Then I had to carefully pack back up my goods and take down my tables and the canopy and haul it all back to the car. It ended up taking the whole day. The day off that I needed to take care of other things was spent trying to sell a few items. I was a little discouraged by this experience and did not think that I ever wanted to sell my items again.

img_6542

 

But wouldn’t you know it, opportunity knocked again…

I was asked to be the monthly featured artist at an art walk for one of the downtown stores in old town. It was just one evening for a couple of hours so I decided to do it. I arrived at the store an hour before the art walk started, and I set up my tables and displayed my wares on the sidewalk in front of the store. I was not really in the mood to sell to people, but I knew once again that if I wanted anyone to buy my items, I had to hawk my wares.

img_6541This time though, I did not cut any prices quickly and I did not care if I sold anything since there was no cost involved other than my time. At first, no one seemed to be interested in my items and I hadn’t sold a thing. After an hour or so, I commented to the husband that I doubted that I would sell anything this evening.

But shortly after I made my comment things started to change. More people started to arrive at the art walk and more people were interested in my amigurumi’s (Once again though, no one even looked at the children’s clothes and blankets. I did sell one child’s shirt, but this time not at a deep discount.)

img_6539I once again talked to the people who stopped to look and I sold my items, but this time I let them fall in love with my amigurumi’s and pay me my asking price. I did bargain with a few people but I felt better about these sales than I did at the farmer’s market. I believe it was because I had a better and more receptive audience for selling at the art walk. The people who had come to the art walk were interesting in seeing something fun and unique. Plus, I was much more relaxed about selling.

img_6540When the night was done, I had sold more in the couple of hours at the art walk than I had the several weeks at the farmer’s market. I felt better about the experience and I decided that I could sell my wares again but I would be very selective as to where and when.

But, before I can sell anymore amigurumi’s, I have got to get some more made. Between what I sold at the farmer’s market and what I sold at the art walk, my collection of amigurumi’s is now quite small. I would not feel comfortable doing another display of my wares until I get some more amigurumi’s made.

So, with that being said I had better get crocheting! Stay tuned to see what fun things I make next!

Until then, sew and crochet forth and sell on!

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