Becoming Profit Motivated

When my friend suggested that we sell things at a table at Eastern Market before the holidays, I found myself getting excited about this idea of going into business. But I have come to the rude awakening that I don’t have a clue about how to make money in the business world. I was always a salaried employee, who never needed to think about inventory or pricing or production rates.

I have occasionally done sewing projects for money – like the wardrobe of 10 Barbie outfits for $10, including a bridal dress. It takes about 10 cents of material to make a Barbie outfit and I had loads of scraps, so it was essentially pure profit. Of course, that’s not taking into consideration the 10 hours of work that went into making those minuscule clothes.

This time around I’m focusing on “napkins for all occasions.” I will have Thanksgiving and Christmas napkins, maybe even some Hanukkah napkins if I can find any appropriate fabric. I will also have general purpose napkins that you could use all year.

And what is my current inventory of napkins to sell? Exactly zero. So yesterday I started shopping for fabric and the other supplies I will need. Being in a fabric store is right up there with shopping for hardware. I love the elderly sales ladies who want to know what you are making and who have the best ideas for the perfect fabric.

But I must say I have expensive taste. I automatically gravitate to the Hoffman and the Moda prints, which are definitely the nicest ones, but also the most costly. I suddenly realized that the fabric alone for the Thanksgiving napkins would come out to $2.50 per napkin. That doesn’t include any labor cost. And what if no one bought them – I would be losing all sunk costs. I guess the bright side would be that I would have 8 Thanksgiving napkins for my own use!

To make them more appealing, I decided they needed to be sold with napkin rings. The first ones I saw at World Market were $2.99 each. That was definitely too high. I finally found a nice black wire ring at Pier One for $1. I found decorative ribbon at a 70% reduction at a craft store which will dress up those little black napkin rings appropriately for the right occasion.

There’s still the question of what to charge. I noted the napkins in World Market ranged from $1.99 to $10. They were nothing special. So I think I could do $10 a napkin (with ring) or $35 for 4 napkins (with rings). Does that seem reasonable?

I have no excuse for not getting to work. I’m sure I will learn some tricks about mass producing napkins. My worries vacillate between being able to amass enough inventory for the first sales day and thinking about what I would do if no one bought anything.

I find this whole notion of profit so interesting. The trick seems to be that of balancing quality with a reasonable cost. I’m sure I will have a new-found respect for people in retail after this little venture.

Meanwhile think about stopping by our table at Eastern Market during November and December to check out my napkins and my friend’s fantastic photos. There’s no charge for “just looking.”