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How are these sellers actually making money?


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13 hours ago, bfroberts said:

I wonder.  Maybe they are just selling to support their hobby???  I don't know, but they aren't doing themselves (or the rest of us) any favors.  

I wonder how many have become actual businesses with insurance, licensing, taxes, etc to pay. 
 

and some use it for “exposure”. I would not want to start a new shop there today.

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2 hours ago, TallTayl said:

I wonder how many have become actual businesses with insurance, licensing, taxes, etc to pay. 
 

and some use it for “exposure”. I would not want to start a new shop there today.

 

 

Agree with your first point.  For your second point, where does one start a new shop nowadays?  Grass roots local selling? 

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Just now, Paintguru said:

 

 

Agree with your first point.  For your second point, where does one start a new shop nowadays?  Grass roots local selling? 

That’s a really good question! Anyone can make a candle or soap or whatever. Convincing someone to buy it is a completely other story. These are emotional purchases. 

People buy a piece of the artist.
 

The answer  becomes easier once you identify your target market.  Someone could very easily start a successful Etsy shop, all they need to do is appeal to their target market. Stand out from the crowd.
 

With so many social media platforms available you have a virtual new world to use.  I have seen successful startup make up companies partner with other start ups that relate to or complement their product to really boost both of their signals.  partnering with others for tag backs and shares works faster than spending a small fortune on advertising to total strangers. The one story in particular sold like $50 mascara. They held a pop up shop in a remote area in Utah. Nobody thought  anyone would show up, but the lines were hundreds of people long waiting for hours because they saw this company on a friends social media channel. Network!

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I'm excited about this thread, there's some good ideas and questions here. Just so happens I have been thinking about partnering with a local artist here in my area to do future arts & crafts shows and link to each others sites, looks like some of the Christmas ones will still happen where I'm at. I have been attending free webinars for small business through my chamber of commerce. I noticed a local lady on the webinar that sells bath & body products, doesn't look like she sells candles and wax melts, so I'm thinking about contacting her to see if she would share a booth with me. Never know, she could be thinking the same thing. If anything comes of it I'll let you all know.

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  • 4 weeks later...

I just did a cost analysis of everything that goes into making a candle. I do this every year to make sure my profit margins are where they need to be. Obviously the cost of the raw material, but also shipping, labor, taxes, electricity, rent, insurance, equipment, website hosting, advertising, etc.

 

Just looking a raw materials, COGs have increased on average 15% (this is FO, wax, vessels and wicks--and includes shipping). Now, I buy in bulk to take advantage of volume discounts. And when I see a new candle maker on the scene slinging their boxed tumblers for $12-15, I KNOW they'll be out of business in less than a year. There's no way they're making money, especially considering they're not buying in volume. The biggest variable that these newbies fail to consider is the cost of time. Time value of money is a very real concept, and from my calculations adds about $.60 to each candle coming off the line (This is based on a set volume per week being produced. If volume decreases, then this number goes up, and vice versa).

 

On how to establish yourself in this brave new world: influencer marketing ranks up there pretty high. SEO is next. Social media engagement is important, but requires a lot of manual time input. Etsy is cheap, but it doesn't offer the tools to properly market yourself OR allow you to stand out from the literally thousands of other candle makers on their site. My strategy has been joining as many wholesale sites as possible (like Faire). It's reduced margins, I'm also not out there hustling to get my product into shops (or paying something else to), so the cost actually comes out the same.

 

On sharing booths -- don't do it. Not worth the hassle. Bite the bullet and do it yourself, unless you're sharing a retail space with other local makers. If that's the case, make sure you're the only candle maker in the group. And if possible, make sure there aren't any jewelry makers... Jewelry always sells better than anything else. So if you partner up with jewelry, expect to take a loss.

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  • 2 weeks later...

Volume, Volume Volume.  Add if they love local to a decent distributor and can avoid shipping.

 

But neither is probably true.  Most are thinking..  Oh Look I made $4 on that sale.  For me to keep up I also have to pay people to help, and my electric bill has increased.  Fortunately I still work out of my basement so my overhead is still low otherwise I would probably have to increase prices about 20-25% 

 

$4 seems better than nothing and your like look at that.  When you have to produce 100 candles and it takes you 2+ weeks and you figured out how to make 1 at a time, $400 is not really worth the time.  

 

From the moment I started this business I always look at efficiencies and ways to streamline the process.  Including last month changing the flow of my basement from when materials come in to where the go out as a finished product.  Much more streamlined and efficient now.  I can see the time I am saving already, and it is not even super busy time.

 

I see these people on Etsy that have low prices and only 20-30 sales.  They do not last long.  I will be one of a few people in my niche market selling right up to the few days before xmas as most of the others sell out and/or just turn off their stores cause it is not worth it. 

 

Surprisingly my sales continue right through Valentines day.  I usually do not get to truly rest till about March.  I am geared up, shelves are hopefully stocked enough and ready for the season to begin.  I am suspecting it will be a crazy season with many people home ordering online and not wanting to fight the covid crowds.

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