I just got some of my art-related merchandise into a local store! That’s pretty exciting.
But. When I crunched the numbers, I realized I’ll be making – on average – a lot less of a profit than I’d thought once the store takes their 50% commission. Like…maybe twenty cents per magnet, depending. Which is still a profit, but damn. 😦
Before you write me off as a naive idiot, let me explain.
I get my magnets and greeting cards from vistaprint.ca. Vistaprint constantly has some kind of sale or deal going on, such that nobody ever has to pay full price. So my actual costs fluctuate (twenty cents’ profit per magnet is my worst-case scenario).
When I started selling my very first batch of magnets, I set the price at the very highest amount I thought people would pay (and they do pay it!). At the time I wasn’t selling them at any place that takes a commission, but I did calculate what my profits would be if someone lopped 50% off them, and it was still decent.
When I got my first batch of greeting cards, I aimed to undercut Hallmark etc.: I set the price at $3/each. Pretty decent profit margin there, at least in the commission-free places I was selling.
But in the intervening year or so, Vistaprint’s deals have been going subtly downhill and I didn’t notice (I hadn’t been selling anywhere that took a commission off, so the entire profit was mine, and still substantial enough). Plus sometimes I’d run out of something unexpectedly and didn’t have the luxury of picking and choosing my deals – I’d go with whatever was on offer and pay extra for faster shipping. Which is what I did with my most recent batch of merchandise, and that’s how the numbers came out so badly yesterday when I worked out the amounts. Previous batches of magnets cost me less and I guess I’d be making closer to forty cents on each one.
Also, back when I wasn’t actually selling anything on a commission basis so it wasn’t that important to me to get exact figures, I was sloppily thinking “here’s my profit, and if I were selling this at a commissioned store I’d make half of that.” But no. It’s not “profit minus 50%.” It’s “the entire retail price of the item minus 50% minus whatever my costs were,” which is a smaller number.
I actually told the owner of the store my concerns re: my greeting card profit. When I told her I charge $3 each, she said “Customers here will drop $5 on a card without batting an eye.” And she said she didn’t mind charging more for my cards than I charge at the market. So that’s taken care of. I wish I’d realized people would go as high as $5 each…my god I would’ve made so much money by now!
So this is what I’m gonna do from here on out:
1) I’m gonna visit my booth at the market way more often and take better inventory. That way I’ll be less likely to get caught short and need to order more stuff on an emergency basis; I can sit back and wait for vistaprint to offer a really good deal.
2) I’m gonna bump the price of my cards up to $4 each (I don’t think I could get away with going as high as $5…maybe I could’ve started at that price but a $2 price bump would not go over well!) and I’ll offset this increase slightly by also offering a bulk deal of 6/$20.
Incidentally, I also used my newfound understanding of my profit margins to better calculate how I’m faring at the market. Most months lately I’m bringing in more money than I’m paying in booth rent, so I figured the booth was either paying for itself or pretty close to it. Ummmm not so much. I’d need to average about another $100/month in sales for the booth to be self-sufficient.
Yeah. $100 more each month just to get to the point where I’m no longer losing money.
This is getting depressing as fuck.
I’ve been neglecting my booth for a long time, though. If I start putting more into it – restock more often, change things up, add new stuff – I should start getting more out of it. I believe that additional $100/month is within my reach, if I work at it. And god knows I have plenty of time on my hands to work at it.