When the US economy tanked, some leatherworkers compensated for the loss of jobs or reduced hours by stepping up their leather sideline business. A few even jumped in with both feet and made it (so far!) A respected wholesale supplier explained to me that when the economy wasn't so hot, leather and related supply sales usually went up. I saw evidence of that with the increased interest in sewing machines. Ten years ago when we had a shop, a machine to take us to the next level would have cost us maybe $5K, and that was out of reach. The quality of the machines has gone up and the prices have come down. Even a one man shop has a sewing machine in reach. Now, thanks to the Internet and UPS, leatherworkers have a broader customer base. People have commented that the LW Directory has brought them business from all over the world.
Today I heard that a well respected house of leather may liquidate its inventory and sell its customer list. He listed the reasons why it just wasn't worth his time and energy to keep beating a dead horse. Last week I talked to another player in the big-lot leather sales, and he isn't going out of business, but demand for product from manufacturers has sharply reduced, and he isn't making any money. A leather retailer (not wholesale jobber) told me that cut leather was selling better than sides because hobby people didn't want to spend that much money, because the price of leather has gone up. He estimated that he's only getting a 15% margin on uncut leather, and that, my friends, is low. He's making his money on the other craft items in the store and sales are actually up- foot traffic and Internet. He speculated that maybe people had more time because they were under-employed or jobless, or that they were trying to save money by making their own gifts. His experience sounds similar to what another retailer described to me, only the second retailer has much more volume in sales. He commented that customer service and being able to adapt more quickly to customer requests was an advantage he had over the one company that gets the bulk of the hobby/one-man-shop/ and smaller sales. But even he carries some of the big guy's products.
So what's the future? Are we on an upswing, slide down, normal pattern- what's going on? What do you see ahead for the suppliers and makers? We know our prices are too low, but some are making it and some aren't. What can we be doing better as an industry to put the concept of value back in the consumers' minds? How can we improve our businesses to keep up with the changing times? I know these are rather broad questions, but I'd like to hear what you think about leather and the economy, the businesses that are associated with our success (or failure) and ideas to survive the next storm. What worked for you to weather this one? What didn't?
Johanna