Monday, July 29, 2013

A sticker, and a shock! What's behind a 'sale'

Sourfce: Deposit Photos

I don’t often blog personal matters, but recently we got some extra hi-5s, praises and re-posts, all with regards that our SALE items are “well priced”. Some of those items were discounted by about 50%, some were even lower. While any praise is good, and I am grateful for it, what does “well priced” item really mean in the world of handmade?

In the wake of tragedies in Bangladeshi garment factories, consumers were finally exposed to the true costs of their cheap goods, but any backclash can only last for so long in the face of declining median incomes and offshoring jobs, which destroys buying power. Also, the history of well protected offshore mass-production and big box chain retail, created an array of unaware and entitled shoppers, with limited tastes and perception of societal classes.

Many of those shoppers view artisans as “elites”, “superiors” linked to wealth and celebrity status. They often assume that we do this, because we’re indulging our inner grandeur, all have family funds to fall back on, and, therefore, boost the prices of our products as we please. The big misconception is, that for years, shoppers were have been entrenched in the rise of the big box stores, stocking the cheap goods, built in poor countries, for wages of a compiled daily value, lesser than a price of an ice-cream cone (work for $4 a day anyone?).

Most shoppers today had completely lost touch with how much it costs to produce just about anything. They’re unaware of the skill and time required, let alone the true costs of the materials. And yet, many, especially in the older generations, have been enjoying the benefit of unionized wages, pension and health plans, paid vacations and leaves, and other benefits. They’re very aware of what a good wage can buy. They just are unable to connect the value of their own wage, to a work of an artisan.

So, what happens, when items like ours, go on ‘sale” and enter the realm of the perceived “well priced”.

Western made handbags have a very little mark-up to their wholesale.

It takes an average of 4-7 hours to produce one of our regular sized bags. The bags must be pre-planned ahead, sourced for leather, then cut, by hand; and sewn into a shell. They are all fully lined, most feature interior pockets and compartments, exterior details, some hardware, such as magnets, zippers, D-rings, etc. It requires two different sewing machines to produce shell and lining. The machines consume power, the leather consumes storage, and work consumes time. My supplies have their fixed costs too – the leather, the fabric, two types of thread, tools, needles etc, etc - it all adds-up. Sewing leather requires increased accuracy and advanced level. I pay myself $20/ hr for my work, as opposed to $4/day... The purses sold in retail provide us wholesale returns, with that very little mark-up. If we were to “boost” our prices, as some say, our products would be priced out of the reach of an average customer completely, putting both our business, and the business of our retailers, in jeopardy.

The only notable “profits” artisans make, is when they sell directly to customers. It allows us to keep the retail mark-up, which is higher, than the bare wholesale.

So, when we sell you a bag on `sale`, discounted by more than 25%, that puts us at risk: to not cover our costs, to not cover the art show fees, shipping, time put in and other expenses; to not be able to pay our suppliers and employees, to eventually not being able to pay our bills, such as rent, groceries, etc. Our employees, suppliers, helpers are all working for Western wages, just like you do, so the costs of dealing with them are higher, than dealing with poor country offshoring. To make one of our bags, it costs, e.g. $120; as opposed to $18 for anything made in India.

When we sell you an item, discounted by 40% or more – we solely cover our costs involved produce that bag – with nothing going towards rent, business development, employee wages and other bills.

When we sell you an item on `clearance` (65% off or more) - we cover the costs of our materials only, and not paying me for any of the work. The `well priced` item sale has just stripped someone of their earnings...

So, here is the hard truth of being an artisan.... While it is great, that sales are as appreciated as they are, it is important to not feel entitled to them. When you end up buying a sale item, cherish it even more, because someone took a huge gamble for your benefit.

Below are a few most common questions and misconceptions we have encountered in our few short years of selling handmade:

Q: When are you gonna have an end of season or sample sale this year?

A: We do not hold any regular “sales”. Our items our season-less. We make them in small quantities, hardly any left to sell-off.


Q: Why are they so expensive? – oh, they’re leather!

A: Actually, the leather amounts for about a quarter of the price of our bags. It is the labour, which creates the cost. We manufacture everything in house for Canadian wages.


Q: Can I get an X% deal on this?

A: Not sure what you do for a living, but does your employer come and ask if you can take a random X% salary cut this week?


Q: If you lowered your prices, you’d sell more, no?

A: Perhaps. But we would take a loss on each item, which would compound. Remember businesses, sunk by Groupon?


Q: Why are you making $20/hr, when I am making just $15?

A: I do not get paid, really, till the bag sells. You are making a one-time purchase from us, and we will not see you in a while (cos our products are great quality), so need to cover the gaps. Also, we really, only make our money at the Christmas season....


Q: Why do local designers tend to ‘boost’ their prices so much?

A: They hardly ever boost. They’re dealing with local suppliers, show organizers, accountants, drivers, who have families and work for Canadian wages.


Q: Why would I buy this, when I can go to X store and get an X brand for just about the same price?

A: It is your choice. You certainly can – but you’ll be buying a mass produced accessory, that not only is cheaply made and will shortly disintegrate, but you’ll be also running into numerous people wearing that same thing. You will also be contributing to global poverty by supporting big corporations, who will use your money to employ children and eventually, will outsource your job.:)


Q: I’m looking for an X leather bag, with X,Y,Z, etc features, pocket here, there, and there, credit card slots on this side and with lining of X,Y,Z colour for about $150. Can you make that?

A: I could. Only, having in mind all the features you‘ve listed; you’re looking at a price of about $400 or more.


Q: What can an artist do to cut back on their costs to give a ‘better’ price for us, shoppers?

A: We take steps to simplify our design to decrease labour demand, do not over-stock our goods, offer returning customer perks, make QUALITY items, that will outlast anything you own probably, offer custom or bespoke services, shop for deals on supplies ourselves, deal with local suppliers to avoid shipping and duty costs.


Q: If it is hard to make a living as an artisan, why do you do it?

A: Because this is what I am good at, love and chose – for the same reasons people are doctors, drivers, mechanics, nurses, day care operators or stay-at-home parents. I’d make a miserable and ineffective accountant. But you’re here, buying our bag, so I must be doing something right.


Q: Why is it important to support local?

A: Because when you do you’re putting the money back into your country’s economy, do not contribute to globalization and poverty creation and abuse, you support real people, real families; positively contribute to the environment preservation, help preserve culture and richness of your home; help prevent homogenizing and unjust monopolies in business.

Posted by Jolanta

No comments:

Post a Comment