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Retail Business Tips for All

Posted by Cat How, February 28, 2018

Shops and designer-makers should work in symbiotic harmony, where both parties are getting something good from the relationship. Both the designer and the shop owner should feel that they are benefitting positively from the partnership — the worst is someone on either side feeling they are being short changed.

As a designer-maker selling your work on to shops, always make sure you are happy with what is offered to you. Make concessions if you feel it is worth it, but be wary of entering into exploitative arrangements like working for free. You don’t want to come out of an arrangement out of pocket.

Sale or return can be worthwhile if you have excess stock and you can afford to have your work in a shop as it could potentially garner you more exposure; but make sure you have good records and a written contract with the shop beforehand which makes them liable for any damage done to your work. I had a horrible experience when I lent my hand-made jewellery to a shop on sale-or-return and they damaged pieces on a fashion show they didn’t ask my permission for, and then left many of them out in the shop window which subsequently got damaged by the sun. Despite having a written contract with them, I only managed to get £5 out of them despite them ruining over £70 worth of stock. So my advice would be to make sure you cover yourself wherever possible.

Some shops might want to try out a few pieces on sale-or-return to start off with, and then proceed to buying wholesale later on once they have figured out what sells to their customers. Bear in mind that your commission for sale-or-return — say 60% to you and 40% to the shop at first — will probably change to a less favourable one for you, say a 2.4 mark up — see previous blog post. This takes into account the fact that the shop is taking a risk and buying things from you outright they might or might not go on to sell later on. You will have the cash and be footloose and fancy free, but they might find that they end up with dead stock they might have to discount instead of simply return back to you.

Most shops which are VAT registered will buy products from a designer-maker outright at a 2.4 mark up. Briefly, this is taking your given wholesale price (say £10), doubling it to get their mark of of £10 also (to get £20) and then adding 20% VAT on top of this to get a retail price £24. For a retailer to get the same cut as you can seem a little extreme. However, there are lots of hidden costs a retailer has to factor in which eat into their £10 fee.

  • Firstly there are the overheads of running a shop, studio or warehouse. These will include heating and electricity; phone and internet fees; rent and business rates which are calculated per square foot and so this factors in the space needed to hold stock; as well as staff costs. With staff, you not only have to factor in pay but other things that make their working day a little more pleasurable — tea, coffee, milk and sugar and (in our case) LOTS of biscuits as well as things like cleaning products and toilet roll. It ain’t all glam!
  • Your products will also have to be wrapped and packaged — and, if the shop is selling your work online — then also sent by post. Packaging will include boxes, bubble wrap, tissue paper, ribbon, stickers and postage fees. At our old design shop Howkapow we included little details in with every order — a hand-written note, packing slip and gift card all wrapped up in our branded tissue paper and stickers. This all costs money, and many other retailers asked us why we’d spend cash on these seemingly pointless and expensive extras, but we never stopped doing it because we thought it made our designers’ products look that little bit more lovely!
  • We also bought in branded jewellery boxes with our logo embossed on the front, which we used to send out all our designers’ jewellery. This again is an extra cost, but it makes the package a lot more special for a customer and helps to present a designers’ work in the best possible light which we believe is paramount.
  • On top of all this is the brain power involved in working out the logistics of sending out all our stock — Rog (my husband and business partner) has near-on weekly meetings with courier companies and Royal Mail to try to get the best possible rates and services and to keep on top of new systems for processing orders.
  • Another outlay — especially for online shops — is actually paying for traffic to get to our website so that we can sell all our designers’ work. This could be through Google ads (which all have to be designed in-house) as well as Facebook advertising and paying our monthly subscription fees for our newsletters.
  • We also believed very strongly in press and marketing and had a dedicated PR person in every day to handle all our press enquiries and help to promote our products to local, national and international press. They had to write press releases, come up with campaigns and manage our press list as well as product loans and photo shoots. This also costs money, and all our designers get press for their work paid for by us simply for having their products on our shop.

So it all adds up. The best thing to do as a designer-maker is to be selective over who and where you want to sell your work and not just go for anyone. Scope out a shops’ social media — have they got a large following and will this mean that your work will get more exposure? — and do they feel like good and decent people who will want to promote your work for you as much as you feel you deserve.

(Image Credit: Anna Kovecses)

Cat How is a Creative Director and Co-Founder of Pollen Place — a unique workspace and event space based in central Bristol designed to nurture creativity and help people and their businesses grow. She is also Creative Director of branding and graphic design agency, Polleni. Cat studied at the University of Bristol and Central Saint Martins College of Art & Design. She has worked as a journalist and graphic designer for newspapers such as MetroThe Guardian and The Observer. Most recently, she was creative director of the e-commerce design business, Howkapow, she founded and ran with her husband Rog How. Howkapow was sold in February 2017. In that time Cat and Rog were running it, Howkapow was given accolades such as the “Best Online Shop for Stylish Homewares” (The Guardian); one of the “Top Ten Online Design Shops” (The Sunday Times) and their pop-up “The Best Shop To Visit In Bristol” (The Guardian).

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