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Though the demand for hand-crafted goods has increased, raw materials manufacturers and retailers still often give the craft producer a difficult time. To help make a better profit , craft producers need to buy raw materials at wholesale cost. (The more minimal packaging of volume necessities is also desirable - a gallon of paint, for instance, as opposed to many two-ounce bottles, or 30-yard put-ups of ribbons or laces, vs. small packages of lace). Suppliers, both retail and wholesale often feel the craft producer is not a serious businessperson, and/or that they are competing for the same consumers' dollars. Craft producers have a reputation as part-time hobbyists who either give away their output as gifts, make them for themselves, or, if they actually sell the finished goods, sell such a small amount that it doesn't qualify as a business. Traditionally, retail stores have been reluctant to offer discounts to craft producers, and manufacturers have made it difficult for crafters to buy directly. Since an average craft business profit margin is in the 20-30% range, the cost of raw materials can mean the difference between success and failure of the enterprise.
A March 1993 article in Craft & Needlework Age magazine, a trade publication for craft store owners, devoted six pages to the tensions between the retail supplier and craft makers. The article offered several suggestions to the retailers for getting the crafter's business without antagonizing her. Retailers were urged to offer sliding scale discounts to the pros, based on their dollar volume of purchases, increasing as the purchases increased.
Manufacturers sometimes present a host of new hurdles for craft producers. They usually require large minimum orders (especially initial orders), proof of ordering from another manufacturer of a minimum dollar amount within a previous time frame, letterheads and payroll checks. Ironically, the craft producer must, for all intents and purposes, "audition" to buy from the source! Some suppliers go as far as asking to see the producer's Schedule C from their most recent personal income tax return.
An alternative to this scrutiny is to join a craftsperson buying cooperative . This may or may not work for you. Be sure that others in the co-op are dealing with manufacturers whose products you can use, and that the administration is equitably compensated. Be sure there are provisions made to deal with members who are slow or non-payers. A convenient distribution location might also be important, especially if you order frequently.
In recent years larger chain stores have either bought up the small, independent stores, or merely price warred them out of business. In a sign of a reversal of this direction, merchandise distributors are looking to the independents for more of their business. The March 1993 issue of PCM Magazine quoted the president of Sullivan's, US, an Australia-based crafts and pattern supplier, as preferring the small, independent craft retailers. "Small fish are sweet, and we would rather have 4,000 or 5,000 independent accounts buying from us than one big chain with 2,000 or 3,000 stores." The April 1993 issue of the same magazine expressed firm belief that smaller stores will dominate the craft picture in the near term.
What does this mean to craft producers? It should mean that manufacturers will be more amenable to selling raw materials to you for your business, since they are already dealing with many more small accounts than in the past. Also, retailers will gradually come to realize that you are not a threat to their business. One professional crafter says the store where she originally bought her goods and received a fair discount still gets her business when she is testing new products and requires small amounts of products. She also recommends them to home crafters, or those testing the waters for a business. This kind of loyalty is necessary for the smaller stores who rely heavily on repeat business.
If all else fails...
While buying at wholesale is usually desirable, it is not always possible, especially if the producer is only using a small amount of product. Manufacturers need to sell large volumes at wholesale prices and often don't want to bother with orders below a certain dollar minimum, often $100 or more. In this case, craft producers can control costs simply by watching for sales at local stores.
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We'll enter your name into a draw to win a copy of Sew Up a Storm: All the Way to the Bank. Drawing will be made September 5th, 1999!!
© SewStorm Publishing 1999
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