Friday, October 12, 2007

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.”


Blogger Richard said...

Selling is a problem for me. Some people seem to hav eno qualms about asking for me - I am more timid.

I think it is a sad reflection that in order to survive, we need to always be thinking about earning money and not following our passions (or, at least, interests).

Of course, being retured, you have many options not available to most.

7:54 PM  
Blogger Richard said...

Sorry, that should be "retired" not "retured"

7:54 PM  
Blogger Barbara said...

Richard -- Truthfully I love craft projects. I don't really care if I turn a profit. I just don't want to end up losing money!

8:46 PM  
Blogger Kristin said...

I will definitely stop by your table. Maybe not in November (I won't be here) but definitely in December. How exciting!

Both my mom and stepmom have done crafts "professionally," a fact that admire and cannot replicate for the life of me.

9:41 AM  
Blogger steve said...

Shila (xmrsbulletholes)did quilts for about a year. She didn't really make any money, but she made some pretty cool quilts.
I have one and I tell everybody I made it.

Napkins seem like a pretty good choice to start a venture.

10:43 PM  
Blogger avocadoinparadise said...

I think your proposed prices here are reasonable, especially with ring. Just be sure to give a break to people like me who want/need to barter a bit! :)

Also, you might want to look into getting a table now/ASAP. I know they're superbusy over the holidays. A friend of mine tried to get a table there last fall during the holidays & they couldn't fit him in till January. I think it may have been later than this when he contacted them, but just saying...

Good luck! Mention when you'll be set up there & your virtual friends can come look!

1:03 PM  
Blogger Mother of Invention said...

I think that's a fair price for 4 sets. If you don't sell them all, you can always give some away as gifts for whenever. I think if you found Hannukah fabric, that'd be in demand as it's not that common.

3:05 PM  
Blogger Barbara said...

Avocado -- I will definitely let you know when we manage to stake out a table. Thanks for the info about doing it early. Hope we're not too late.

I'm sure I'll be happy to bargain and will probably sell at a big discount to friends!

I'm also willing to take orders from anyone who has a design in mind!

MOI -- I had already thought of just turning anything I don't sell into gifts. People like homemade things.

11:43 PM  

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