Selling Your Needlework

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Last updated on August 20th, 2014 at 11:00 pm

Selling your Needlework and Cross Stitch Patterns – Part Two

This is the second page of a two-page article by Yarn Tree, which offers suggestions on selling your original needlework designs or needlework related products. Please note that Yarn Tree does NOT purchase unpublished needlework designs.

Click here to return to Selling Your Needlework Patterns – Page One

Make up a business plan: A business plan is simply an outline of what you plan to do, and how you plan to make money doing it.

Unless you are going to get a bank loan, it does not need to be fancy. (If you are going to get a bank loan, make it real fancy. Bankers really like that type of thing.) There are a lot of books written on business plans, so go to the library. The most important thing is to estimate your expenses and find your breakeven point. That is, how many units do you have to sell to break even? How many stores do you have to sell to get to this breakeven point? How are you going to reach that many stores? Use a computer spreadsheet like Excel or 1-2-3 if you have it.

A suggestion: For many of the materials that go into your product the price you pay will depend on the quantity that you buy (the more you buy, the cheaper it is). I would suggest pricing your product based on your expected volume, but for your first purchase buy the minimum that you can buy, even though you will pay more.

How Many Needlework Stores Are There? This is a common question, especially if you go to a bank for a loan. Unfortunately there is not an easy answer. The problem is defining what a needlework store is. There are large and small stores that sell only needlework; there are other stores that needlework is just a part of their business. For example, a craft or fabric store that has a section of needlework. There are some businesses that are seasonal only. You will find some very successful needlework stores that operate out of the owner’s home. Plus mail order and web businesses. In all, I would guess that there are about 20,000 to 25,000 business that sell some needlework. You can buy a mailing list of stores with a yellow pages listing, but this is only a part of the total market.

Advertising and Selling to Stores The needle stores are very receptive to new designs and new designers. The typical needlework store is a small independently owned business. Needlework stores are always looking for something “new.” Having new products that their customers have not seen elsewhere is one of the ways a needlework store is able to complete with a mass merchant. Chain stores and mass merchants generally will not be as interested in new designers. These stores are not as interested because the prefer to do larger orders (rather than a lot of small orders). Also, they tend to prefer designs from well known designers.

While needlework stores are eager to buy from new designers, doing so does present problems for them (and as a result, problems to you). The cost to the store for freight, processing the purchase order, receiving the order, and paying the bill is proportionally greater for a small order than for a large order. As a designer starting out you will be faced with the problem that you do not yet have a enough designs or products in your line to make if worth while for some stores to want to place an order. For this reason it is harder to sell a single design than it is to sell several designs. One idea is to take a box of your first design and drive around to stores in your area. Even if you don’t make much money doing this, it is a great learning experience.

You can try to sell your designs to stores by direct mail: This is little expensive but it may be successful for you. If you mail over 200 pieces, check with your local post office about ‘bulk rate’ mailing (officially called Standard A Mail). You will a mailing list. This can be purchased from a mailing list broker. This list will be a list of stores that have a yellow page listing. Another option is to purchase a CD ROM disk of business names (also from yellow page listings). Check the fine print before you buy to make sure you are permitted to use the names for a mailing. A low cost way to see if direct mail will work is to put together a list of about 100 stores from the yellow pages of phones books (many libraries have phone books from major cities). Mail a simple mailing first class and see if you get any results.

From my experience, a simple black and white mailing is almost as effective as a costly full color mailing when selling wholesale. You can probably do a very simple mailing to 100 stores for about $50. Don’t be too disappointed if you only get 2 or 3 phone calls from a mailing of 100 pieces. It is worth trying, but direct mail is hard to make a profit on. Even a successful direct mail campaign will generally lose money initially; any profits will usually be in the reorders.

Trade shows are a way to talk to a lot of stores in only a few days. Shows can be expensive. Your expenses will vary, but figure a minimum of $1,000 to be at a 3 day show.

Trade magazine advertising is the cheapest way to reach a lot of stores. Trade magazines are magazines that are mailed only to businesses that are in the “trade.” They are not available to the retail consumer. There are trade magazines for shoe stores, book stores, etc. The Needlework Retailer is the best place to advertise to reach needlework stores. (I should point out that Yarn Tree publishes the Needlework Retailer, so I may be just a little biased.) While running an ad in a trade magazine is not cheap, on the basis of cost per store reached, trade magazine advertising is very inexpensive. For example, while a black and white mailing may cost about $.50 per store reached, a 1/4 page full color ad in the Needlework Retailer costs less than $.05 per store reached.

Consumer magazine advertising (magazines like you would find at a news stand) can be effective but I would suggest waiting on this. First, it can be VERY expensive. To be used to its best advantage, stores must to aware of you and your products. That way when a consumer goes into a store and asks about your product, the store owner will already know about your company and know how to reach you. Store owners don’t spend a lot of time reading all the consumer magazines, so chances are that you will not reach many stores through consumer magazines.

You may have heard about “work of mouth” advertising. These means relying on a customer telling a friend, who tells their friend, and so on. In my opinion, in wholesale sales this is wishful thinking. First, there are just not that many needlework stores in any given town so there is not that much interaction between store owners. Also, imagine that you are a store owner and have found this fantastic new product line from this new designer and it is selling great. Are you going to go out and tell your competitor?

Selling To Distributors: Distributors are businesses that buy products and design booklets at a discount from a number of manufacturers to sell to retail stores. Yarn Tree is a distributor. Most, but certainly not all, designers and manufacturers sell their products through distributors. Whether you go through distributors is entirely up to you. If you do go through a distributor, you can continue to sell directly to stores; a distributor is just another way to reach stores. The major advantage to you is that because there so many stores out there, chances are good that most of a distributor’s sales will go to stores that you are not able to sell to. Also, do not feel that you can only sell through a single distributor; you are free to do as you wish.Pin

My Advice On Starting A Business: I have been proven wrong so many times that I hesitate to give advice anymore. That said, here is my free advice.1) Don’t pay too much attention to any one person’s advice. Talk to as many people as you can, but remember that it is your decision.

If you ever hear anyone say, “Now is a good time to start a business” email me. I have never heard anyone say this. You will have a lot of people tell you that now is a bad time to start a business. Smile and ignore them.

If your banker agrees 100% with what you are doing, re-think what you are doing. I say this only half jokingly. It is very hard to make a profit doing what is expected. After all, that is what everyone else is doing. You are probably better off doing something just a little out of the ordinary.

Budget for your first product idea to fail. Never risk all your money in the first product. Start a notebook with new ideas to fall back on. Say you come out with a set of kits with designs of dogs and it doesn’t sell like you hoped. Maybe all it would take is to sell the designs as a chart pack. Or maybe you should do a second set of kits with cats (a store owner would have told you that dog owners tend to want designs that are the same dog breed as their pet; cat owners will buy a cat design even if it doesn’t look anything like their cat).

Worry more about making a good quality product and less about price.

Take a good photo. It doesn’t matter how good the product or design is; if you have a bad picture it isn’t going to sell. I think this is the single biggest mistake people make.

Price your product so you make a profit. A common error is to underestimate the cost of labor. Include a cost for labor even if you plan on doing the work yourself to start with.

As soon as you get a product that starts making some money, start getting the next product started.

Keep your expenses low. There are two types of expenses in a business–those that your customers see and those that are unseen. Spend money where it is seen and cut back on the hidden costs. For example, be willing to pay a little extra to have a nicer product packaging, but buy used office equipment to get started.

Do what you enjoy doing. You will be more successful selling what you love.