Friday, August 26, 2011

Making Crafting Profitable - Part 6

Okay we haven't really discussed this, but its important for your bottom line.  When your making your items for sale and you catch the materials on sale which cost do you use when figuring out the cost of materials.  Most of you are going to say the cost you paid.  Not necessarily.  If the materials your using go on sale periodically, say every 3 to 4 months, and you are able to buy in bulk at that time, then okay, use the cost you paid.  But what if they go on sale only once or twice a year.  Then you're better off using the regular retail price.  

Let me give you an example:

Sally and Sue both create a cute scarf set.  Each set takes two skeins of yarn that regular cost $6.00 a skein.  The local yarn store runs a sale at $3.00 per skein, and both stock up on enough yarn to make 20 sets.  They both use the same pricing formula for their of 3.5 times the cost of materials, plus $5.00   Sally prices her scarf sets at $26.00 (3.5 x 6 (sale cost of 2 skeins) + $5.00).   Sue prices her scarf sets at $47.00 (3.5 x 12 (reg cost of 2 skeins) + $5.00).    Both Sally and Sue sell out.  Sue immediately heads toward her local yarn store to purchase enough yarn to make 20 more scarf sets.  Sally  is only able to purchase enough to make 10 scarf sets because the yarn is no longer on sale.  And because it is no longer on sale she has to raise her prices to cover the new costs of materials.  This raise in cost upsets her customers who are expecting to get the scarf sets for the same price as they paid before.   Because they are upset, many go elsewhere to purchase the scarf sets, while complaining about her "unethical practice of raising prices".  

Of course, when you are very successful it will be time to look into buying wholesale. When you reach that point, you can contact the supplier (check the labels of the items you purchase) and see what their minimum purchase is, and what you need to purchase from them.  If you're lucky, you know others who craft similar items and use the same basic raw materials you do, then see about going in together and splitting the cost of an order. If its not feasible to purchase from the supplier or manufacturer, then check with your local distributor.  Some (not all) will be glad to purchase extra for you when they send in their orders, and in many cases give you a discount on the purchase (especially if your order allows them to purchase and the next price break level).  Not all will do this so please check first. 

Does your craft lend itself to recycling.  I have a friend who makes good money making crocheted rugs from old t-shirts.  She gets many of the shirts she uses from friends and relatives.  She also has a deal worked out with a local thrift shop to purchase all the t-shirts they get in that are torn, or have stains that won't come out when washed for a flat rate per pound.  She also hits yard sales, and swap meets to look for t-shirts.  When she tells people what she wants them for, many will bag up those that "were not good enough to sell" and give her a call to come pick them up (she usually arranges the meetings in the parking lot of a local store or library).  She washes and dries all the t-shirts, then cuts them out of strips and attaches the strips together.  She then crochets the strips into rugs that look a lot like the old braided rugs that most homes had years ago. The best part, is that stains are not really noticeable when the strips are crocheted, instead lending character to the rug.

If you use a lot of beads in your work, check at thrift shops, yard sales, estate sales.  Look at the jewelry for sale.  What you want to be on the look out for are bags and boxes of broken jewelry.  My 17 year old niece makes some nice pocket change, taking about old broken beaded necklaces and bracelets and restringing them to make all new designs out of them.

Even broken pottery and porcelain dishes can be used to make beautiful mosaic tiles.

Do you have some ugly sweaters in your closet?  Take them apart at the seams and unwind the yarn to reuse in other projects.

A local Goodwill in our area often has unfinished craft projects that have been donated.  These are usually cheap enough that even if your not going to make the suggested craft, the materials can be used for other crafts that you are going to make.

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