Happy New Year!
It is a new year with lots of new questions in my mailbox. I want to start out the new year covering a few basic things that a few very new store owners and store owner wanna-be's have been asking me. But before I get to that, I want to do a little reminder. I want to remind those of you who may be reading this that I am writing this for those new store owners who really are new at this! Sometimes, when we get a little seasoned, it is easy to forget what we didn't know going into the business, and it is easy to forget how we learned the hard way (or at least I learned the hard way). And sometimes we forget that what may seem like "common sense" isn't really that common if you never owned a store or never been around retail.
So, this blog, especially this posting, is not in anyway meant to insult anyone's intelligence - ever. I am just as honest as I can be and I answer the questions to the best of my knowledge in a way that I had wished so badly someone would have done for me so many years ago when I first started out. And finally, before I begin, I just want to put in my disclaimer that I am not a professional....I have no doubt that there are much better, smarter, faster, easier ways of doing things than what I am suggesting or have learned over the years - but I can only share with you what I know and what I have learned the hard way. :-)
So, having gotten all that out of the way, let's talk some shop and have a little fun and hopefully someone out there will walk away a little enlightened and maybe with a few less knocks to their head than I got. This post is also for those who have very little, if any start-up money. Sometimes our passions speak louder than our bank accounts and we just want to get going. I don't recommend this. I started out that way, and all because I was dumb doesn't mean you have to be dumb. But if you insist on following in my dummy footsteps, then maybe I can get you to tap dance around some of my dumb mistakes! :-)
Get some coffee (or wine if it is late...or what the heck, it is 6pm somewhere in the world), I feel gabby tonight and the questions have been piling up for a while.
This post is about basic questions about the cost of inventory and getting it into your store and trying to sell it at a good profit and make a living when other stores (Pottery Barn, Pier One...Target....) can sell so much cheaper. The first question I got from a lovely person who really got frustrated when started to add the numbers up on wanting to sell a cute chair:
Elizabeth, how am I suppose to be able to sell an upholstered chair I found at flea-market for $50, and get it upholstered, buy the fabric, pay the labor to have it recovered, get it painted and then raise the cost to make a profit and then expect it to actually sell when Pottery Barn has chairs that are just as good at half the price?
His example was basically that after the cost of the chair, fabric, labor, paint and so on would be about $250 and to sell it at $500 would be really high for his market for this little vanity chair. He sent a photo and I agree, it would be an expensive little chair ...BUT...now here is the BIG BUT...(not my big butt, but still a but....)
BUT: Here are some considerations to think about before I go on to some facts. We small, unique business owners will never be able to compete with Pottery Barn and so on. Our job is super hard because we have to be AHEAD of the trends. We don't follow the trends, we create them. We practically force them down our customers' throats, convincing them that our stuff is the stuff that should be in their homes because they can't find it anywhere else. Once we educate our customers on that concept and drill into their heads over and over again, then selling a little $500 chair isn't as scary or as unthinkable as one may have first thought. But this takes time, effort, and a lot of hunting - more on hunting in a moment.
Now, for a side note: Have you been in Restoration Hardware Lately? I rarely go shopping. That usually surprises people, but I really don't like to shop. I will go flea-marketing, but in my spare time, you will hardly ever find me just "shopping." In fact, I really can't stand it because after owning a store for so long and after buying for clients for so long, the last thing I want to do in my free time is to stand in line with more stuff in my hands. So, I hadn't been in Restoration Hardware in about two or three years. A friend took me recently because he wanted me to see what was what...meaning, they now have burlap and linen chairs, "vintage"mannequins, burlap and linen pillows, industrial and wooden tables, shutters, corbels, galvanized "junk" and all sorts of things that look like they could have came out of my store 7 years ago!!!! This look was no where to be found in the Midwest 7 years ago, much less a store full of it in Restoration Hardware in the Midwest. See below:
Needless to say, I was dumbfounded. Seven years ago, I had to "educate" and show my customers (by that I mean decorate the hell out of my store) how all this burlap, linen, old and new stuff, and chandeliers would all work together. If you don't believe me, just look at the photo below. This is a picture of my Chicago space in early 2005.
My point is, the bigger stores that have the money, resources, and ability to bring in cheaper goods that appeal to the mass market will always, always be there. Our main goal isn't to sell to the mass market...our main job is to find our niche market. We don't have enough time or money to sell to the mass market in the first place anyway. We need to find those people who are tired of Pottery Barn, Target, Pier One, and Restoration Hardware. Yes, our customers will shop those stores, but our customers don't rely on those stores for ideas, or use those stores as their main source for accessories, gifts, or even make them their first stop when they want something new....they go to YOU first! Why? Because you have found that small market of people who appreciate something unique and are willing to pay for it. Now Restoration Hardware has done a fab job putting it all together (seven years later) and how great it would have been had they paid me big bucks to be on their staff of product development or merchandising....but oh well, maybe living the high life isn't in the cards for me. But the point is, what they are doing now, I did 7 years ago and sooner or later, people will tire of it and look for something new. Hence my slightly revamped blog you are looking at right now. As soon as I saw that Restoration Hardware is now using "my girls" (mannequins) I felt the strong desire to change my header on this blog. I will always love my girls, but when a big box store starts to "take" something that I feel is "mine" then it is time to change it up a bit. That is how I ran my store. Right or wrong, smart or stupid, that is how I did it. Now, the mass market is much slower to tire....but those who shop in our kind of stores don't want what everyone else is doing (no matter how cool Restoration Hardware dolls it all up), they want something different and that is why they go to you! :-)
But I can hear you screaming: But, Elizabeth, that takes time, and I have to pay rent right now and how am I suppose to sell my unique, "pricy stuff" until I can get those people in my store on a regular basis? And how can I afford all this unique crap in my store if I don't have people in here in the first place to buy it right away so I will have money to go out and buy more unique crap so they will keep coming back? Very good question that I asked myself so many times and had no blogger to answer back, so I will try....
Okay, before I move on, let me sum up what I covered in short sentences:
Basically, store owners want (and need) really unique, very cool stuff in their store to be competitive.
But that custom stuff can be costly (especially custom furniture)! If it is costly to us, then it will be costly to the customer.
If the uneducated, new customer won't buy it, now what?
The store owner must educate the customer why their stuff is better and show it off in a really unique way!
The store owner must reach out to that market of people who are willing to pay more for cool stuff.
But that takes time, so how do you pay your bills in the mean time?
Well, that is where a number of things come into play such a few things as gift items, services, and smart hunting which I address below:
Very well chosen small GIFT items can really save the day.
But you must be selective. If you can find the right gift item selection, display it well, package it well, have great price points, your customers will keep coming back. Candles, cards, jewelry, infant clothing, scarves, soaps, lotions, candy, and so on. BUT....take time and find things that are unique or uncommon in your area. Make sure your items fit your store. Test your items yourself. Offer different items at different seasons. Offer gift wrapping, or gift certificates. Small items can be a pain to keep up with, but they can save the day. Check with local artists - they are starving - to get noticed and in a store. Customers also love the idea of supporting artists. Artists usually will let you have things on consignment.
SERVICES. To tell you the honest truth, to this day, I really have no idea how these tiny boutiques stay in business that don't offer some kind of service. I have done the math many times, and it doesn't add up. Many, many times I have driven by small little stores that are closed up tight at 5pm sharp, lights out and no one working and I would just scratch my head wondering what they are doing right and what I was doing wrong. Again, they probably did the smart thing, had a good bank loan, or money in the bank, or a good start with inventory (or a rich husband?). I had none of the above. I worked long, long hours (actually way too long) hours with design services in conjunction with my store. I painted cabinets, furniture, consulted, designed bedding, furniture, and did show homes. These services helped the store during slow months. Many stores offer crafting classes, guest speaker lunches, teas (if they have a nice room in the back), consulting on getting the home ready for sale, you name it. You would be surprised what stores offer. Just go on line and look up boutiques and see what they offer to get ideas.
And finally HUNTING. I told I would get back to it! While you are building your unique customer base, you need to develop excellent hunting skills. That takes time, but it will be worth it. I wish I had a dime for every time someone asked me, "Where do you find your great stuff?" I would always answer with a smile, "The Great Stuff Store." If you aren't really traveling and digging, and hunting to find your goodies, then you aren't going to find anything that some other store down the block can't find either. You must, must, must, get out and hunt. Hunt on Ebay, Craigs list, websites, craft shows, local artists, flea-markets, garage sales, three towns over at the church sale, whatever it takes, go find it. I will say probably one of the most proudest accomplishments about my store was the time, effort, and persistence I took in finding unique items. I think it was more of a challenge for me more than anything. Sort of my own personal sickness really - hahaha. I was sort of in competition with myself to see if I can up it one more notch. There were so, so many things I wish I could have done differently and better with my store and either I didn't have time or money or energy, but I am glad to say I did have unique items.
So back to the original upholstery question. The upholstery thing used to be a big deal to me too - in the beginning. But I got over it really quickly. I think the key was that hunting thing again. I just made sure I found really cool furniture and nothing less. And if the furniture wasn't really, really cool, then I made it cool with my painting, or fabric choice, or how I used the fabric. Now what I am about to say is said with a soft heart and with good intentions, so please take it in the spirit it is intended. Unless you are blessed enough to have a bank account full of cash or a wealthy spouse to back you, and can afford to pay someone to paint the furniture, upholster it, design it, and then expect to double the price and sell it, it will be difficult until you build up a good reputation for having unique stuff. This is the time to learn or teach yourself some skills if you don't have any. This is the time to learn how to paint, or do simple upholstery, or simple repairs on furniture. This is the time to learn how to rewire a lamp. This is the time to learn how glue old vintage frames back together or tighten table legs on small tables. This is the time to learn how to sand off paint correctly and quickly. This is the time to learn how to sew simple pillows. Learning how to do these things quickly, expertly, and NOW, is the way to keep costs down, and not have to rely on outsourcing so many things. I only do a few things, but I do them well: paint, fix minor repairs, select fabrics, design, and hunt. If you can afford to hire professionals to do all the labor, then more power to you! But if you can't, then learning some skills will take you far and save you money.
One more short question I received that sort of relates to this: Pricing the inventory. How much to do you mark it up? Well, that depends.
The industry standard used to be 2.25 for what I call "retail" items (even though it is all retail). By that, I mean, items I ordered out of a catalog. But, what about items you find at garage sales, or flea-markets? There is NO standard! It depends on what is selling in your area, what is popular during that time period, how much you paid for the item, how much you are willing to pay, and how are you using the item. Is the item mainly for display that you will use for years? Or do you want to sell it right away? I once bought a plate in Belgium for $2 and brought it back and sold in one day for $275! (Now that is an extreme example, but true.) The dealer who bought said she was going to sell it for $350. I was very happy with my profit margin and so was she with hers. But then again, I paid $200 for a mannequin that I used in my store for years. BUT, I sold $100's of dollars of jewelry off of her over the years and finally sold her for $225. Not much profit? Well, maybe not, but I look at it like rent....I had her for four years, that is $50 a year and then made $25 plus all the sales I made off of her...and she looked beautiful in the store, so I was very happy. So, you see, it all depends. (I should have sold her to #@*&! Restoration Hardware for $900 hahahahaha)
But my considerations for buying at flea-markets are these:
Can I get at LEAST double the price?
Do I need to repair it?
Do I need to paint it?
If yes, is it worth the time and trouble?
Do I have the time to work on it?
Can I just take it put it right out on the store floor as is?
Is it breakable?
Will it fit in the car now, or do I have to come back?
Are there any parts missing?
Will it really go with my store? (I am very, very picky)
Is it unique?
Am I just filling a space in my store, or do I really like it?
Would I put this piece in my home?
Can I think of at least two customers who would just love it?
Those are just a few of the things that quickly flash in my head in just seconds as I quickly go through a market and that is why I go alone and don't talk to people because I am calculating and thinking constantly. In other words, I am hunting, not socializing. If you are a gabber - and I don't need to convince you that I am - just look at this post! But if you are, try going hunting alone - you might accomplish more without your girlfriends tagging along so you can concentrate.
Trusting yourself and what you sell is so important and a big topic for me. Our American culture has been trained to like what is put in front of us. What we see on TV, in the magazines, on the web, in the books, on HGTV, and in the stores are what we are suppose to like. It is natural, of course, to be influenced by all this, I know I am. But I am still a big believer that there is still something in us that makes us want to be a little different, and yet, we want to be the same.
Home owners, especially HGTV fans, are sort of like teenagers and I mean that only in an observational way. You know how teenagers so badly want "to be different" and while trying so hard to be different they all end up looking the same in their own group? They feel safe because it is "us against them" and not "me against them." As a group, they are different - from their parents, teachers, and elders. But within their peers, they basically all look the same. Well, it is the same with home owners and HGTV fans (again, I mean this not in a bad way). In a way, we all want to be different, and as a group, we are different from other groups of people. People who shop at Target, Pottery Barn and Pier One are different from those who shop only at Walmart - so those "HGTV teenagers" are different from one group to the next, but within their own group they basically look all the same because they shop at the same stores and buy all the same stuff.
But then you have the true rebels. Those are the teenagers that even the teenagers wonder about and even are in awe of but a little leery. Parents throw their hands up and just live with the fact that they have a kid that is truly different and after a while, the parents learn to appreciate their kid's differences instead of fighting them. The ironic thing is, the kid is so unique, he/she never really understood what the big deal was in the first place. In our world, those "teenagers" are called artists. Or creative spirits. We are the ones that go about our life like it is normal but others can't figure us out and we can't figure out why they need to figure us out in the first place. We are the ones that usually open up shop, go hunt for the cool stuff, put it all together....and then one day, one by one....
.....word gets out and the "HGTV teenagers" from the Pottery Barns, and Targets, and Restoration Hardwares start to trickle over and a whole new world opens up to them! And now your job is to show them how cool your world is, how livable it is, how fun it is, how doable it is, and how your eye, talent, and abilities are worth the extra bucks because you are from an entirely different group with an entirely different set of standards. And believe it or not, people will pay for your lifestyle. YOU just have to really live it yourself. You can't fake it and you can't be a "wanna-be" you must be "I am." Make sense?
I am sure you noticed on the side of all the blogs the little button that says "Followers." I just added mine finally. I know there are many blogs that have 100's of followers and I think that is great. But at the same time, I kind like the fact that I am not in the 100's yet, my other blog is getting close, and this one is no where near close. I kind of like to think that it is the really distinctive people with a particular style or good taste that decide to click that little button on the side of my blog who want to follow what I have to post. In other words, like my store, those who walked through my store's doors and left with something in their hands, in my opinion, had really good taste! :-) Is that a big ego? No, it is confidence in believing that I have good stuff. And I really am being honest when I say that there were things that just didn't sell (not many) and in my head, I really just thought to myself, oh well, someday they will get it.... I am being completely honest here. That is how much I trusted my instincts with my finds and I never let another store, trend, comment, customer, or whatever get me to doubt my inventory. You know what you like. So, now go find other people who like it too. And soon, they will come find you.
Yes, you will get those people that will come in your store and will comment on how they can "get that table" at Target for much cheaper....or how that "slip cover" is much more expensive than the one at Pottery Bar...and that is when you become the teacher and promoter of your lifestyle. You educate, educate, educate. We are not mass producing. We are supporting artists who paint, sew, upholster, craft and who do it well. We aren't paying children $1 a day to do this 1000 times a week. They (the customer) in turn are getting a piece that no other is getting....you will find a way to say your spiel and after a while it won't sound like a spiel because it isn't. It is what you do, you do it well, and either they get it or they won't. You have to have faith that there are enough people out there who also believe in what you do and what you stand for and will pay for it.
BUT....you must show what you are made of. Show them what is missing from those other stores. Show your customers that life is more than about things....it is about what you do with those things, how you live with those things. You can do that....a big store can't. People are craving....and I mean craving for a connection. And you hold the key - you!
So, while it is so discouraging at times, try to remember that you are special and others will see it. Never, never, never let a customer make you feel less than. I was so very fortunate to have 99% of my customers make me feel like I had magical powers or something the way they praised me and it was great. But it always amazed me the power that one, snooty, nasty customer could have over me with her rude comment - if I let her. I learned very quickly not to let it get to me because I quickly realized that she was from an entirely different "group" and it was a group that I had no interest in dealing with nor being a part of in the first place.
I hope this helps you to take a fresh look at your store, your inventory, your pricing, your value and how special you really are. You are doing something so spectacular and sometimes, you just need to hear it and be reminded.
I am very, very proud to be a part of your group.
From my house to your house,