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Archive for April, 2011

This conversation with Shannon Foster of Woollybottoms launches our series of interviews with owners of successful handcrafting businesses. Woollybottoms specializes in upcycled wool items for children, with a particular focus on clothing that can double as covers for cloth diapers. I’ve watched Shannon’s business grow by leaps and bounds over the past few years, and I’m thoroughly impressed by her work ethic, level-headed decision making, and savvy marketing.

How did you get started with Woollybottoms?

I unintentionally got started with Woollybottoms back in 2004. I had worked as an insurance agent for several years, and had decided while pregnant with baby #2 I would be leaving the workforce and staying at home to care for my baby boy and four-year-old daughter. With the loss of my income, I wanted to cut corners where ever I could, and that included using cloth diapers on my little boy.

After he was born, it so happened that he could not wear ANY disposable diapers as he would break out in rashes no matter what brand we tried. Cloth was going to be part of our life whether we liked it or not. It turned out we liked it…. a LOT actually. There are so many options out there… diapers lined with bamboo velour, diapers that snapped, and adorable prints just to name a few.

After researching diapers, I researched different covers and learned about wool. Wool just made sense. It is breathable (a must in hot and humid Arkansas weather), easy to care for, water resistant, and a natural fiber. In order to keep costs down for us, I set out to make my own from recycled wool I had on hand at the house. I enjoyed making them so much that I started to sell some extra pairs on eBay for fun.

What was the turning point where you decided to pursue Woollybottoms as a business instead of a hobby?

As I was selling on eBay, I began to get several requests for custom orders.  People were bidding what I thought was crazy amounts for my diaper covers. I started the bidding out at $7, thinking if I just got that much apiece I would be happy. I was shocked when many pieces were going well over $30 each.  I decided after a few months that it was time to start thinking seriously about going from hobby to developing this idea.

I had a lot of learning to do about setting up a website and managing orders. I started off working out of the home. I had converted our dining room into a woolly headquarters. Sweaters were everywhere. I had a tower of wool stacked up on an entire wall, closets were bursting with fabric, and it was just crazy.

The next step was to move everything out of the house so I could keep work and home life separate. I bought a small building and had it located in the back yard and then hired someone to come and work to help sew. Once again, we outgrew this space and re-located everything to a larger building about 10 miles away and hired a second person to help sew.


What’s your top business goal for 2011?

My goal is to continue this trend of steady growth. I don’t want to jump too fast, but I also don’t want to be too conservative. I want to pursue getting our products out there to as many people as possible so we have focused on a little more marketing to natural parenting stores. This has proven to be very effective and we are growing exponentially by word of mouth alone. It has been a struggle to “mass produce” our items since each piece is made from recycled wool and is therefore unique but we are settling into a method that allows us to meet the demand of our retailers.

What do you wish someone had told you when you first started your business?

There have been several bumps along the way and I have learned (and am still learning) what works and what doesn’t work. I have found that handling a product from start to finish is imperative. It allows me to see what is going on and ensure that EVERY product is the absolute top quality. No one will love your business as much as you do.

However, with that said, knowing when you need help and being able to delegate duties to others is a must in a growing business.  A single person can only do so much and will often become overwhelmed and burn out quickly. If I had it to do again, I would have hired local help sooner. I also wish I would have invested in industrial machines sooner. The time they save you in speed alone pays for themselves in no time.

What’s your biggest business challenge?

My biggest business challenge I touched on a bit earlier. I work with recycled wool and that poses many issues. Recycled wool can vary so vastly between one sweater to another so I have had to learn to treat pieces of wool differently. Some sweaters are good for skirties, others are good for longies, etc. So, I can’t just hand over a box of sweaters to someone and tell them to give me 50 soakers. I have tried many different ways to try to bump up production and I’m constantly re-working my methods to better organize my time and production.

While I could easily have hundreds of soakers mass produced and knitted from new wool, this is not the vision of my company and would undermine everything our business is built on. Keeping our business local and using recycled materials is what our business is built on and what our customers expect. It is a challenge especially as our business grows, but a challenge I enjoy.


What are your best marketing tips?

We do no online advertising. Our customers are wonderful and most of our business has grown strictly by word of mouth on diapering boards. Our Facebook page has been a wonderful tool to keep our business in front of people. We try to post there several times a week on Facebook about new items. We also have a newsletter for customers who wish to have an email to be notified when new items stock. We usually stock new items about twice a week, which is a wonderful way to keep the site fresh and shoppers have something new to look at every time.

Our focus for 2011 is to get Woollybottoms into even more parenting stores. I like to take a few stores a week and personally contact them either by email or direct mail with some information about our products. This method has proved to be very successful with many stores following through with an order.

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There are a ton of applications, products and what-nots that are designed to make business easier. It’s overwhelming to consider them all, the various platforms, and the ins and outs of what they all do before shelling out the cost of the program or the monthly fee that many charge. That’s the inspiration behind this, the first in a series of many, product review. Why not hear from those who use it first? This is a place to get the good, bad and ugly truth about things before you buy.

Let’s start with Endicia. I should begin by saying that I’m a bit frugal. I don’t like to spend money on things to get a little bit of value, or a little bit of gained efficiency. If I’m going to spend my hard earned money on something for my business it needs to work well, be a solid value and I need to gain significant efficiency as a result. The ROI must be outstanding, otherwise, it’s just as easy to do it myself the old fashioned way.

For me, Endicia was something I considered for about a year before taking the plunge. Paypal shipping is slow, requires several clicks to do anything and it’s cumbersome if you are printing a lot of packages on a regular basis. I found it to be tedious and the fact that Multi-ship constantly crashes on me means that I end up printing labels individually and that’s time consuming. But, Endicia is $9.95/month and that’s just for the base plan. If you are on a mac or want more features you are looking at $15.95 up to $34.95/mo. That’s a lot just to print a shipping label. The price was too high for me to jump in without a darn good reason, but paypal shipping finally did me in.

The great news is that Endicia does more for me than just ship packages. It’s an honest to goodness time saver and makes everything about shipping easy. Let’s start with the actual shipping. Just copy and paste the address from the paypal details page, enter the weight, type of package and hit print. It’s made easy with drop down menus and all the options are on the same screen so there is no back and forth. Insurance, customs forms, and all other package details can be found right on the main shipping screen. That in itself is a time saver.

There is a detailed, easy to use and update shipping log. Ever get an email from a customer asking about a package? I always hated going into Paypal to search for their email and pull up the correct item, get the tracking number, then to go USPS.com to track. It’s a mess. With Endicia, you just pull up your shipping log (which is a button right on the main shipping window) and you get a shipping log for any time period you want. With one click you can check delivery on as many packages as you like, or just one, your choice. It’s easy to see at a glance what has delivered and what hasn’t and just one click gives you the shipping details if you need them.

It syncs with your address book so if you have repeat customers, you just type their name into an address field on the main shipping window (are you getting that the main shipping window has everything you need yet?) and it auto fills their address, as well as their email if you have it loaded. And if you have their email loaded, you can have a customized email sent to them automatically with all the shipping info they need and a personalized thank you message.

If you ship internationally, it’s definitely a must have. You can print custom forms directly from Endicia and it has all international shipping options including First Class, unlike Paypal which only has Priority. No more going to the post office. Print everything from home, request a carrier pick-up on USPS.com and leave your packages for your carrier to take. Not going to the post office might be the best thing about this app.

There are obviously numerous things I love about Endicia (did I mention that insurance is cheaper?), but if you get only one thing from this review, let it be this—Endicia will significantly decrease the amount of time you spend shipping packages. And we all know, there is nothing more precious than time.

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Why is it that starting a business is an easier decision than pricing? Generally, work at home artisans start their businesses because they either love what they do or what they do is very popular. Either way, the decision to take what might have been a passion or hobby to the next level is often not very hard. How to price those handmade bits of goodness can sometimes be paralyzing though. There are many, many great articles out there that outline pricing calculations and formulas. I’m not here to redo the work that’s already been done and that you have already most likely read. (Although I’ll link you to several later just in case you haven’t.) I’m here to talk about the nuances to pricing, some common pitfalls and mistakes work at home artisans make, and how the consumer factors into pricing decisions.

Pricing doesn’t have to be hard, but there are some things you have to take into account to ensure that you are priced correctly in the market. Let’s take a look at some common first-timer mistakes made in pricing. Many who are new to the business side of their craft think it’s good to start off priced low for entry into the market. Some feel that if they price low they can generate large amounts of sales quickly. Both of those thoughts are true, but they are also full of potential problems.

Entry level pricing should never be the bottom of the market, if so it can be challenging to raise prices to where they should be to compete. When starting out it is wiser to price accurately and then if you are new to your craft, lower prices a small margin to account for learning, or market the correct price, noting a “grand opening”, or similar, discount.

If you price low to generate sales, and plan to price low long-term, remember that low-priced options often signify lower quality in the consumer mind. Most work at home artisans are proud of their craft and put a lot of time and energy into their products. If you are proud of your product, why would you price it so low that the consumer isn’t proud as well? It’s never a good idea to be priced too low for that reason alone. Not to mention it devalues the market as a whole. Now, you may not mind that you are under pricing your competition, thinking that you will get increased sales since you are less expensive and that will compensate for the lower price. While that’s true for the short term, it’s not a viable long-term strategy. Lower pricing sets an expectation in the market that you are cheaper, note the use of the word “cheaper” rather than “less expensive”, and cheap is not what you want to be. Having a true sale, one that is marketed as such and runs for a short period of time, can be a great way to move product and boost sales, but it’s just that, a sale, not a long term pricing strategy.

This is an excellent article outlining the hard core facts about how low prices can undervalue your time as well.

So that still begs the question, how does one price correctly? Probably everyone knows the general rule of thumb is to take all the material costs for an item (don’t forget all the little things like printer ink, packaging materials, business cards, etc), double that and you have a solid base for wholesale pricing. Double that price and you should have a good base for retail pricing. But what if your business doesn’t do wholesale, or you have a very labor-intensive product? What if your competition is under-, or over-priced compared to you? That’s where pricing gets scary.

Now that you have a good base for pricing, you need to look at your market. That includes a long hard look at your competition. Now, by long hard look I mean look at the price of every competitor, not looking at every thing being done by only the core competition. You must look outside your micro-market. If you sell wool interlock longies, you need to look at the price of other interlock longie makers for sure (that’s your micro-market), but you should also look at knit longies, fleece longies, the cost of another diaper cover and a pair of pants, etc (the entire competition). Look not just at your core competition, but the alternatives to your product as well. After all, if your customer doesn’t buy your longies, they will still be buying something to put on their babies legs. Finding out alternatives to your product can be helpful, as it will give you a better picture of the thought processes of your consumer.

And last but not least, don’t forget to price to ensure you make a fair wage. The term “fair wage” is wide and varying, based on the cost of living at your location, the labor involved in making your product and your current financial need. Look at all the factors and don’t sell yourself short. Don’t forget that products priced too low often devalue the market and the product itself. A quality product should be priced as such.

Yes, pricing can be scary. It’s a lot to consider. The material costs, the prices of rest of the market and a fair wage for your time and effort all play a role in determining an accurate price for your product. The best advice, take them all into account equally and make sure the pride and care that you put into your products is also put into the business side of your company.

Just getting started? Check out these great pricing articles:

http://marketingteacher.com/lesson-store/lesson-pricing.html

http://www.fluentself.com/blog/biggification/the-art-and-science-of-pricing/

http://www.netmba.com/marketing/pricing/

http://www.ohboydenterprises.com/HowToPriceHandmadeGoods.html

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As a work at home business owner, you have a lot of financial responsibilities–vendors and suppliers to pay, invoices to track, sales to project. It can be easy to overlook one very important financial item: paying yourself.

Even for a sole proprietor, it’s important to pay yourself a salary. In essence, it means knowing what you want to make from your work. As Kristi Ashley, the owner of Tickety Bu, explains, “You must pay yourself a salary. Must. You don’t always have to take it, but on paper you should show your salary and then the loss if you can’t actually pay yourself what is your full salary. It’s important to have that down and work your biz around that reality.”

What does that mean, exactly? Figure out what you want or need to make each month to cover your bills, to save up for a special vacation, to replenish your supplies–whatever you want your business to do, from a financial standpoint. That’s your sales goal. Now work backwards from that: evaluate your sales, perhaps on a weekly basis. Are you on track? What’s selling and what isn’t? What’s your most profitable product line? Are your prices set correctly? Where should you be concentrating your efforts?

Paying yourself a salary can be as simple as withdrawing a set amount of money from your business account once or twice a month, just like a regular paycheck.

Not able to pay yourself in a given month? Maybe it’s a slow month because you’ve been building up inventory for the holiday season or a craft show. It’s important to be honest with yourself about why you’re not meeting your sales goals and if it’s truly a temporary situation with sound business reasons, or if you need to reassess your business model, your prices, your marketing, or some other fundamental issue.

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