Pre-ordering can help spread costs
Q. I'VE recently started a business making jewellery, which I sell at markets and to several small gift stores. I'm running it on a very lean budget, and my problem is budgeting for materials when I am never quite sure how many orders will be coming in, especially around this time of year. I can't afford to buy large amounts in advance if my jewellery doesn't sell fairly quickly. Would you have any advice?
A. IT'S A good question and I think it's a problem that many sole traders face, especially people like you who make their own goods. With Christmas coming, you want to make sure you have enough stock to last the season but not so much that you're swimming in it come January. So here's an idea that I think might help.
Create some sales materials stating that each of your pieces are handcrafted and that it takes X number of days to complete a design. Make sure you highlight that your products are made to measure and bespoke, which will create a sense of exclusivity and maybe even an additional margin.
Let your customers know that they need to order in advance, which will enable you to buy the materials you need based on the orders you receive. You might even want to offer customers an incentive in the form of a small gift or discount for pre-ordering.
If you're selling at markets, the display is very important. I'd suggest putting some of your best-selling items out for viewing, but not everything. If you limit the number of items that you put on show, you should be able to contain the materials you'll have to buy. You can still have a catalogue of good-quality photos that show various styles and colours, but you don't need to have every design on display.
This should help you with your budgeting and enable you to get a better handle on what your customers want, so you can focus your efforts accordingly.
Mark Bouris is executive chairman of Yellow Brick Road, a wealth-management company and small-business adviser. His advice here is intended as guidance only.
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