Quitting Your Day Job

When people find out I’m self-employed, at least half the time I hear “Oh, that would be so nice! You can just take off whenever you want to!” These are the people who I know don’t understand what it takes to run your own business.

Yes, I can take an hour in the afternoon to take my dog over to see his buddy at a relative’s house so they can play. But that means I’ll be working an hour later that night or an extra hour or more on the weekends.

I work an average of 12 to 13 hours a day, 6 days a week. Yes, I can shuffle my schedule when my disabled family member has a doctor’s appt or something else comes up, but I have to make up those hours sometime. During my busy season, my days often go until 1 or 2 in the morning 7 days a week to make sure I meet deadlines.

So do you still want to put in the work to quit your day job and do your own thing? It’s a lovely dream, and if you’re willing to put in the time, it can be very rewarding. You have to consider many things.

First, you will have to do your pricing to make sure you’re making enough profit to meet your needs. Sit and figure all the expenses your income will need to cover. In my case, I have a spouse who covers the rent, student loans, some utilities, provides the health insurance through his job, and the car payment and insurance. That means my income has to cover the groceries, cell phone bill, other utilites, gas for the cars, medical co-pays, prescriptions and other miscellaneous expenses as well as anything extra we want to do. All of these things need to be considered. You can look for areas to save money, maybe with coupons or cutting back your cable, walk instead of drive if possible, move to a cheaper cell phone plan, etc. If you don’t want to make changes and keep the same standard of living as you have with a regular job, then you’ll need to work that much harder.

If you don’t have another wage earner in the house, you also need to consider health insurance costs now. It used to be many people working solely for themselves just didn’t have insurance, but now you’re required by law to have it or you’ll be hit with a penalty from the government. The good news is most self-employed people will qualify for the larger subsidies from the goverment for it, so that may help, but it’s still going to have some cost to you that you’ll need to consider. What the plans offer will also vary, some won’t cover prescriptions, surgery or emergency room visits, so you’ll need to keep those costs in mind, too.

Unless you’re forced to try to make being self-employed your full time job very quickly (laid off, moved and can’t find a new job, terminated), the option I used and that has worked for other people is to move to part time work at your regular job while you push your self-employment into full swing and build up the business to sustain the business as well as yourself. Very few businesses can hit the ground running full steam. They take time to build up customers and get your name known either through word of mouth or advertising.

Map out your business plan. Make careful decisions of how you want to grow your business and markets to target to do that. Get some professional business cards made. A lot of people get cards and stickers from Moo or Vistaprint because they’re very inexpensive. I ordered my first set of cards from Vistaprint, but honestly, I wasn’t impressed with them. The text was hard to read, the cards weren’t printed straight and the overall quality wasn’t what I wanted to represent my business. I order mine from an Alphagraphics shop in my area. 500 cards costs me $39 and I’m much happier with the quality. You want to represent yourself as a professional and someone who’s “here to stay” in your market. You want people to see you as a legitimate business and not one who’s going to take their money and disappear. You want to earn their trust. You want them to see your card and think “this person cares enough about their business to be professional”.

I know a lot of people also use the inkjet printable cards, and they may work for some people, but in my opinion they just look tacky and cheap. A local radio station used to use those for their salesmen. Everytime I saw one, it just left me with the impression that they didn’t think their salesmen were going to be around long enough to warrant buying them an actual box of “real” cards.

A little bit of effort and expense can make a huge difference in how you’re seen by your customers. You want to build their trust, earn their respect, and offer a quality product with good service backing it. Given time and careful steps to build your business, you can make being self-employed a successful venture. The rewards can be great: building self-respect, being home with family (even if you are working), being available for emergencies, flexible schedule, and doing something you love and believe in. Would I quit my business to go back to work for someone else at a regular 8-5 job? Not unless something happened that I had absolutely no choice in the matter.

Keep things realistic, build your business plan, map out your growth and how you want to achieve it, and make sure you’ve got all your pricing and expenses figured out. You can build a successful business in most any venture if you’re willing to put the time into it. Money needs to be re-invested back into your business, you need to advertise (I’ll cover this in a future blog), you need to invest a certain amount up front to project the right image, but it doesn’t need to be thousands of dollars. I started my business with some patterns I’d designed and about $100. You can build your business into a success, too, and maybe one day even be able to quit your day job.

 

“This is too expensive, can I pay this instead?”

Whether you sell vintage or handmade, at some point, you’re going to hear this.  People are always looking for a bargain, and some feel they have to barter with every purchase they make, especially if you sell somewhere like Etsy or eBay.  I’ve heard some sellers on eBay who use the “best offer” option in their listings have people want to pay no more than half the item’s value.  Etsy sellers also frequently get “convos” from people wanting to pay less.

 

Whether you agree to do it is entirely up to you, but you need to keep in mind your costs and time on your items.  I had one person who wanted one of my items so badly, when I wouldn’t budge on the overall price, she started asking me “If I got it without this on it how much would it be?” then kept subtracting different parts or suggesting cheaper materials trying to get the price down.  When taking it down to the very basic, core garment still wasn’t in the price range she wanted, she tried getting me to drop it down further anyway on my labor.  I finally had to tell her no, she had her prices, if she chose not to order, then I’m sorry we couldn’t do business, but I couldn’t afford to sell my items at a loss.

 

I don’t think some people realize making changes to an item to fit a price range is going to change it to the point that it’s not the same garment.  That wool coat made from a cotton or linen blend is not going to have the same look at all.  Taking away accessories might work for some, but isn’t going to live up to the expectations of people who are in love with the whole item.  It kind of reminds me of a neighbor I had once who loved my chocolate chip cookies so she asked for my recipe.  I gave it to her, and the following week I heard “I tried to make your cookies, but they didn’t turn out the same at all and mine weren’t very good.”  I told her I’d help her make a batch, but asked her to show me what she’d done in her batch.  I then heard things like “I didn’t have any shortening, so I used vegetable oil instead”, “I know your recipe says 2 teaspoons of vanilla, but I just love the smell of vanilla, so I used 6”, and “I didn’t have 4 eggs, so I just put 2 in.”  Needless to say while she tried to follow the core recipe, she’d made enough changes to the ingredients that she ended up with an entirely different product by the end.

 

Hobbyist sellers have more leeway with their pricing.  Many of them support their hobby with their full time job or have help from their spouse.  They don’t have to be as concerned with watching where every cent goes, so they can (and many do) sell things at a loss.  I’m sure many will think they’re making money or breaking even, and I’m sure some are, but from pricing I’ve seen and what I know things cost even at wholesale for supplies, there are a number who aren’t.  As a for-profit business, you can’t compete with that, plain and simple.  Where you stand out above the hobbyist is that most will stop selling within a couple of years as they move on to other hobbies or things that take their time or situations will change where they can’t support their hobby losing money anymore.  You can make sure your items are better quality, provide better service, and make sure you’re showing up in better positions in the searches.

 

You can choose how you deal with the people who try to pick things down to the absolute cheapest.  If you offer coupons or discount promotions for your items, you can let them know what the current promotion might be and when it expires.  You can also suggest alternatives that might be to their liking and price range that they might not have seen in your store.  Suggest a layaway plan.  I had a customer on limited income who badly wanted an item that usually sells for about $240.  She made payments on it for six months to be able to buy it.  We stayed in regular contact, and she’d let me know when she had been paid and how much she could pay that week and I’d invoice her through Paypal for the amount.  I kept a note in the invoices with the payment amount and what the outstanding balance would be after that payment so she had an accurate record of her payments and could plan future payments.

 

If you choose something like the layaway option with a customer, make sure you cover your materials first with a non-refundable deposit.  I either have the materials on hand or purchase them within 24 hours of when the order is placed, so if someone decides to disappear or want to cancel a sale, I don’t want to be out those expenses.  I make it very clear in all of my custom orders like this that the first payments up to $X amount are non-refundable as it’s used to cover materials.  I’ve never had anyone complain and so far everyone’s understood the policy.  (Knock on wood)

 

If you’ve done your pricing breakdowns, you know what items you have some give on and which ones you don’t.  You also have to determine what your time is worth.  If you really want to sell something, you may be comfortable dropping your labor rate down some to accommodate the customer’s request.  If something is very technical or requires a high amount of skill or precision to make, then you’re completely justified keeping your labor rates where you have them.  Always keep in mind that you’re running a business, and as a business, you’re there to cover your expenses and make money, whether it’s extra money you’re saving up to do something like take your family to DisneyLand, or just to pay your rent and buy food every month.  If you’re in business to create profit, then giving away your materials and time are going to lead to another failed business in the statistics reports.

Feedback and Why It’s Important

When you shop online, do you check feedback?  Most people do.  I’ve had customers tell me they were nervous about ordering something custom made online, but my feedback from other customers convinced them to trust me and go for it.  When I buy something online, I check reviews on the product, check feedback on a seller, and even sometimes check feedback on a buyer.

 

Negative feedback doesn’t mean I won’t buy from a seller, but it depends on what it is.  If they have 100 feedback praising their service or product, then one person griping about how horrible it all was, I just figure it was sour grapes or a bad customer.  Now if I see all positive feedback for a while and then all of a sudden they’re getting dinged with neutrals and negatives every few days, that tells me either they’re burned out and don’t care anymore or having other issues so I move on elsewhere.

 

That being said, and I’m betting most people also look at feedback, so why have only 1/3 of my customers left me feedback?  I receive emails telling me they received their item and love it and everything’s great and the color is perfect, etc. but no feedback shows up in my profile.

 

You rely on the feedback from others to help you decide if you want to trust a seller.  Shouldn’t you take a few minutes once you receive your item and help other customers with the same?  I give feedback on all of my customers, thanking them for their business and noting if they were especially great to work with.  I know several sellers who won’t leave feedback until it’s left for them.

 

When a problem arises with your product, if the seller works with you to resolve it quickly, you should let others know that the seller is responsive and on top of things, as well as stands behind their items and service.  Say you order a new handback and the handle breaks off the second day you use it.  You email the seller and explain the problem.  A good seller will either send you a replacement, or if it was a one of a kind item ask you to return it so they can repair it for you free of charge.  If returning it isn’t practical, some may offer a full or partial refund.  Don’t be offended if they ask for pics of the damage to assess what happened.  We have to deal with a lot of beggars and scammers, so we also have to protect our businesses.  This isn’t a reflection on you, but simply us being responsible business owners.  Most stores wouldn’t let you return an item just by saying it was damaged, they have to inspect it to verify the damage themselves.  You should definitely leave feedback for the seller, explaining the problem and how they worked with you.  eBay only allows short feedback to be left, so you’re limited there, but other sites like Amazon and Etsy allow pretty much unlimited feedback.

 

If the seller went the extra mile to help you resolve the problem, then they should receive positive feedback for that.  If they ignored your emails and did nothing to help you, then they should receive neutral or negative feedback for that.  Be honest, be objective, and keep in mind that you’re helping other buyers with your feedback.

Lost Sales – and Why I Don’t Feel Bad About it

In the last week, I’ve lost three sales.  The total of the sales comes to just over $200.  Sure, the sales would have been nice, but as a business owner I need to keep certain things in mind.  Now here’s an outline of each one and why I don’t feel bad about losing them.

 

Sale #1 – Can I get this by a specific date?

My usual  lead time on custom made items is usually about 2 weeks.  This gives me a little wiggle room for things like migraines, unexpected doctor’s appointments for a disabled member of my family, or shuffling orders to accommodate someone needing something by a specific date.  Normally, it’s not a problem to squeeze someone’s order in, however there are time when my “open slots” are all taken and I simply cannot do it.  I had someone contact me about receiving an item within 8 days of their first contact.  I had no open slots until about 4 days before she needed it.  I replied back that the only way to guarantee delivery by the date was for her to pay for Express Mail shipping.  She opted not to do that, thank you very much, maybe next time, etc.

 

Sale lost.

 

Here’s why I don’t feel bad for it.  I have a responsibility to my customers, but I also have a responsibility to myself.  I had 5 orders already in the process of being made or about to start being made that I simply could not reschedule.  Those customers all placed their orders in plenty of time to receive their items by the time they needed it.  Now yes, I probably could have squeezed in this one other order, but only at personal cost to myself.  I’d have had to extend my workdays from their usual 12 hours to 16 hours.  That’s on top of the time I need to give to my family and other personal responsibilities.  Was one sale worth that to me?  No, it’s not.  The personal cost to myself wasn’t worth the stress and exhaustion.

Lost Sale #3 – But the child size almost fits me, can I order that instead?

 

Yes, I skipped to number three here, and that’s because #2 is fairly important, so I wanted to cover it last.

 

This time, someone couldn’t afford the item I sell in an adult’s size, but could afford the child size, even though they needed an adult size.  They wanted to purchase the child size and still have me make the adult size because it was “close”.

 

This one was a flat out no, sorry, that won’t work.  My children’s sizes are priced so low I basically make less than $5/hour on them profit.  Add to that the material needed for the adult size, and I’d be making waitress wages but without the chance for a tip.  The child size for this item takes about 2 1/2 yards of material.  The adult size about 3 1/2 yards, along with the extra time to work on more material.  The child size takes me about 4 hours to make, and the adult size about 5 hours.

 

I love my customers, but again, this is my full time job, and my business, so I have to keep my head above water.  How would you like it if your boss came to you and asked you to do more work, but instead of your usual pay for it, he was only going to pay you half what he usually does?  Yeah, I don’t know of anyone who’d go for it either.

 

Lost Sale #2 – Can You Lie on the Customs Form?

 

Online sellers get asked this all the time.  It’s usually some variation of “I want to buy this, but only if you mark the customs form as ‘Gift’, okay?”  In this case, it was “I’m ready to purchase this immediately, but only if you mark the customs form as ‘Gift’ and put the value as $XX or less.”

 

This is never, never, never a good idea.  There are serious repercussions for both the seller and buyer if this is discovered.  For the seller, it’s a felony charge that can result in a huge fine and even jail time, especially if they discover you’ve been doing it on multiple transactions.  For the buyer, it can result in a fine of $250 USD as well as the full amount of customs fees that would have been due.  It can also involve having all packages to them opened for inspection and the customs inspectors assigning what they feel is the true value of the items then charging the customers those fees. 

 

It also invalidates all insurance you may purchase for the shipment.  So you list a $400 necklace as “fashion accessory” or “costume jewelry” and give it a value of $20.  The item arrives damaged.  No problem, you think, I purchased insurance on it.  Nope, sorry, they’re going to look at that customs form, say “We don’t care what the insurance amount was, you claimed the value was only $20, so here’s your $20, have a good day.”

 

Most buyers don’t think about the repercussions on the seller, let alone on themselves for things like lying on customs forms.  Yes, some countries charge very high customs fees and have very low thresholds where those kick in.  As a seller, you have no control over that, and should take every step necessary to make sure your buyers are aware they are solely responsible for those fees.

 

In the end, if you’re running a business, you need to keep your business in mind for every single sale.  Know what the risks are to yourself and your bottom line.  Is a felony on your record and having to pay a large fine worth marking something as a gift?  Are you willing to eat the loss if something is lost or stolen and you need to file an insurance claim with the post office?  Are you willing to give up personal time from what’s already very limited time just for one more little sale that’s only going to make you enough money to eat lunch off the dollar menu?

 

A successful business requires careful decisions, a lot of thought, and a hell of a lot of work.  I’m not willing to throw away everything I’ve put into my business at the expense of breaking promises to other customers, endangering my very limited personal freedom or losing money on a sale because someone doesn’t want to pay the full price for the item in their size.

 

If this is your business, you make your own decisions for it.  But keep in mind what it’s going to cost you in the end.

Pricing for Profit

There are usually two kinds of sellers in the handmade market:  those who do it as a hobby, and those who do it as their job, either full or part time.

 

The hobbyists usually support their habit with their other regular income, so they aren’t as concerned about profit as someone who does it as supplemental or their full time income.  For myself, it’s my full time job, so I have to be aware of where every penny comes from and goes to.

 

There are a variety of places to sell both online and in the real world, and costs will vary greatly for each one, but the principle is the same and can be easily converted between sales venues.  I’m going to use selling on Etsy as an example.

 

For the sake of simplicity, I’m going to use a dress that I sell for $70 in my shop.  This is a custom fit dress where I fit it to the person’s chest, waist and hip measurements, as well as the length.  When I first list this dress, it costs me .20, Etsy’s base listing fee.  When this dress sells, I’m then charged another $2.45 in final value fees.  If the person then pays by direct checkout (Etsy’s payment service) by credit card, I’m charged another $2.64.  So just to sell the item, it’s cost me $5.29.  From that $70, I’m now down to $64.71.

 

Now the material.  This dress takes about 1/2 yard of one material for the contrast colors, a 22″ zipper, elastic in the sleeves (up to almost a yard depending on their arm size) and up to 5 yards of material depending on what size they need it and how long.  I’ve had people want the dress anywhere from just above the knee to long enough to wear with 6″ platforms and have the shoes covered.  Now good quality fabric, in a poly/cotton blend so it’s easily washable and keeps looking good through multiple wearings cannot be bought for $2-3 a yard.  It just doesn’t exist.  If I can get a good deal on it, I pay about $5-6/yard.  We’ll assume this is an average size person who wants it an average overall length, so we’ll figure 4 yards of material.  We’ll even say I lucked out and can get it for $5/yard.  I buy my zippers from a wholesaler, so I do get a good price on those at about .50/each, so with material, zipper, and elastic and a bit of interfacing, I’m at about $26.69 in material costs.

 

So $64.71 minus my material costs leaves me with $38.02.  I pay taxes on my income, about 15%, so that brings me down to about $32.32 in profit.  This dress is fairly simple, it takes about 20 minutes to size and cut out, then about 3 hours to make, so we’ll figure 3 1/2 hours total on construction.  $32.32 divided by 3.5 comes out to $9.23 an hour income for me.

 

There are other expenses as well, advertising for my business (I budget about $40/month for Google Adwords) as well as the money I put back into my business investing in new equipment, investing in supplies, creating new things, etc. 

 

These are all things to consider when you price your items and figure how much income you need to bring in each month.  If you do the math and it comes out to where you’re only making $2/hour on an item, and you know you need to make at least $8/hour, then your price will need to be adjusted.

 

Each selling venue will have their own costs.  Your own website won’t charge you the final value fees or listing fees, but you’ll have hosting costs and advertising will be higher.  Ebay’s fees will differ from Etsy’s, but the basic formulas for figuring out what it costs you to sell there are the same.  Craft fairs and consignment shops will have their own associated fees like booth rentals and percentages the administration may take from any sales.

 

Sometimes part and full time sellers simply can’t compete with the hobbyist seller who doesn’t care about profit and prices their items low enough to just cover fees or material costs.  It’s a fact of selling online.  You can counter it by building up feedback, offering a variety of different items at different price points in your shop (I offer things ranging from $4 all the way up to $340.)  Make sure you offer a quality product so that while you maybe can’t beat them on price, you can beat them on quality and build up a loyal customer base.

Titles, Tag and Keywords on Etsy and Subsequently Google

This post mostly applies to selling on Etsy, however some of it may be useful for other websites as well.

On Etsy, it’s all about your titles, tags and keywords. This is how you get found in searches, and in saturated categories like jewelry and crocheted items, it’s very important. (I don’t sell in either of these categories, but I’m using them as an example because I know the competition in those is huge.)

So let’s say you’re a jewelry designer. You’ve made a gorgeous aventurine bracelet with silver clasp and findings. I’ve seen some listings where the seller has complained they get no views and looking at their listing they’ve used terms like “gorgeous formal bracelet for dinner party”. I don’t know about you, but when I search for a new piece of jewelry, I don’t use terms like “dinner party bracelet” to find it. I might have a new black blouse I’d love a bracelet to wear with it, I like green, so when I go look for a bracelet, I’m going to search under something like “green and silver bracelet 7″ because I want a green and silver bracelet and I want one 7” in length to fit comfortably on my wrist.

As a seller, you need to think like a buyer when titling your items and coming up with the keywords. Title the bracelet “Green and Silver Aventurine Gemstone Bracelet 7 inch” then in your tags use things like “Green bracelet”, “aventurine bracelet”, “7 inch bracelet”, “7 inch wrist”, “gemstone bracelet”, “green and silver”, and even things like “speckled bracelet” and “speckled gemstone”.

My search of “green and silver bracelet silver 7” turns up 678 items. Browsing the front page, I see several plastic items, some Swarvoski crystal, and some made with buttons and wire wrapping, none of which are my style. So then I remember, hey, I like aventurine, it’s a nice light green with some dark green flecks in it, not bright or obnoxious, but a pretty color. So I think I want an aventurine bracelet. So now I search under “green aventurine bracelet 7” and that drops my search results down to 43 items. There are a few in there with gold, which really isn’t a metal I wear, so I skip those, but here about half way down the page I see an aventurine and aquamarine bracelet that I really like. I’ve found my bracelet, and this seller gets a sale!

Etsy’s searches are also picked up by Google, so people typing in search terms in Google can find your listings there. This is why having a good title and tags is so important here. Here’s a screenshot of my Etsy shop’s stats so far this month.

April24_stats

As you can see, most of my traffic comes from Etsy searches, with second place going to people who are just going straight to my shop from a saved link or typing in the address manually.  Next is where my items show up in Google Product Listing Ads (which Etsy pays for) and the rest either from my FB page, Pinterest pins or searches people are doing on search engines.

 

So think like a buyer, and make your titles, tags and keywords help you!

So This is It – The Beginning

I sell online. I sell online in a variety of places: eBay, Etsy, my own website and soon Amazon. Now what do I sell? I make custom clothing and other items. I’ve been sewing since childhood, altering patterns and making custom items since high school, and now do this as my full time job. I’ve made entire wardrobes for family and friends. I’ve spent time doing alterations for different businesses. I’ve been doing this online thing in varying degrees of part time and full time for about 15 years now, so I’d like to think I’ve learned something along the way.

Hopefully I can share useful information that will help others either improve their business or get the nerve to take the jump and start up their own for the first time. Either way, I’ll share what I’ve learned, gripe about things that frustrate me, share successes and hopefully remain as much in love with what I’m doing as I am now.

Because I’m not using this blog for self-promotion, I won’t be posting links to my website, Etsy shop, eBay or anything else. If you want to know who I am, just drop me a note and I’ll email you back. I want to promote the idea of doing business online, having varying amounts of success with it, and things that online sellers have to deal with on a day by day basis. Some of my experiences may be different from yours, if so, then please share in the comments. But please keep it positive, no blaming whatever political party you don’t like, no calling names, no snarky attitudes, etc. etc. etc.

I’ve been back doing this full time for about a year and a half now after doing it part time for several years. I was stuck in a job I hated, working for people I couldn’t stand and with no where to go in a small company that promoted their family over anyone else. The economy sucks, jobs are hard to come by, and between living expenses and student loan payments, my husband and I need both of our incomes. I needed to get out of that job before the stress put me in the hospital, but I also couldn’t just up and quit and place a huge financial burden on my husband. So I talked to him about gearing up my sewing business to full time again and doing that instead. He agreed, and I started gearing up to build business.

eBay was out of the question for me at first, it wasn’t cost effective. I’ve found most people on eBay want cheap, and my items and pricing I needed couldn’t compete with the foreign resellers on there. The other sellers with similar items may pay their employees .50/hour, but I needed more than that to survive and pay bills. My husband started working on building my website, while I looked into Etsy. Etsy turned out to be a very good fit for me because I make everything I sell myself.

Some categories on Etsy are saturated: jewelry and crocheted/knit items are two big ones. If you want to sell in these categories, you’re going to need to put A LOT of effort into promoting your business. Actually, all Etsy shops are that way. You can’t just post a few things and sit back and wait for the sales. All I had to start with were some old pictures of items I’d made over the years but could make again and a few new things I had materials on hand to make. It was a small start, but it was a start.

That’s it for this post, next post: Titles and tags on Etsy and how to get yourself found in search.