DIY Business Tips: The Best Way to Make More Money on Every Sale
Expanding your handmade business can involve some real growing pains at times. When you are selling to retail shops, indie craft fairs, and maintaining an e-commerce site, you may find that not only is your time stretched thin but so is your bank account. Maintaining your bottom line while turning a profit can make or break a creative small business.
The key to keeping your production costs as low as possible lies in finding the best value for the raw materials you use to create your handmade goods. Many times, this means buying in bulk to cut pennies—even, in some cases, dollars—off the production cost of your finished products.
It can be expensive to buy in bulk. A line of credit or an investor can help fund a big expenditure. Or you can dedicate incoming cash to your first bulk purchase. You can start small by using holiday proceeds to purchase in larger quantities. Or “treat yourself” with the revenue from a wholesale account to pay for a bulk order. Would a loan be better? Do your research—companies like Square and PayPal now offer capital opportunities based off of annual sales revenue.
Next, you’ll need to find the wholesale suppliers. If you make soap, for example, searching online for the phrase “wholesale sodium hydroxide” can open up a portal of websites that can cater to your soap-making needs.
Be prepared to do the time and compare apples to apples—and don’t be afraid to use customer support along the way. It’s someone’s job to handle and answer all your questions. They want to help you and land a new account. If possible, check out the facility in person. Don’t be shy when asking for free samples, either. In many situations, you can test out the product, which can save you from bulk buying regrets.
Materials matter to your buyers so be sure to ask lots of questions about the products and their production. If you have a screen printing shop, knowing how the shirts are sourced can play an important role in your descriptions.
Once you’ve chosen a distributor and established a relationship, don’t be afraid to come back and ask for a greater discount. Or try inquiring about opening up an account on credit, which will allow you to buy products but pay down the road. In many cases, these discounts and savings are offered when you’ve built a relationship with your supplier.
By compiling all your newfound data in a spreadsheet, you can keep track of all the numbers, websites and contacts you make while researching online. If you’re in a crunch because one of your accounts has a product out of stock, you’ll want that backup company on standby. Be sure to specify minimums for each supplier on the spreadsheet. Make it a rule to go back and double-check that the prices you initially agreed to pay haven’t gone up without you noticing.
Also, always keep an eye out for new suppliers. Joining a trade group, like Craft Industry Alliance, or attending an industry convention, like CHA’s Creativation, can be a great way to open up new supplier relationships. Membership trade organizations grow by working these suppliers and, in some cases, they offer special discounts for members.
Lastly, you’ll need to prepare to receive all of this bulk material. If you’re working from home, can you accept pallets of felt or drums of coconut oil? Regardless of whether you are in a home residence or a production space, make sure you can find a place to properly house all of these newly acquired materials.
It can be overwhelming to buy in bulk, but the savings ensure you earn more money on every transaction and have the dollar bills you need to continue to grow your business.
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