Setting up a profitable leather business

[UKRay]

Like many people on this forum, I'd like to take my 'three to five day a week' leather obsession (I still have a part-time job) and immerse myself in it fully.

Common sense and experience says that this is a risky move and there a lot of things that can go wrong, but I'm keen to explore the potential of moving back into leatherwork full time.

Here on the forum we have people from all walks of life, some professional leatherworkers, others like me that work all the hours there are and call it part-time, those who see leather as a profitable hobby and those who just do it for fun. Between us we have a wealth of knowledge that could help to ensure a healthy start for any new leather operation.

Essentially, I'd like to know the best way to set up a profitable leather business. How would you do it? What are the risk factors and what are the problem areas? What about premises - what are the deciding factors when it comes to choosing a location? Is retail the best way to go or is manufacturing a better option? How about custom work and repairs - do they really pay?

All contributions and ideas welcome - especially from anyone who has been there and got the tee-shirt!

I'm looking forward to hearing your thoughts.

Ray

[8thsinner]

If you check out the other relevent threads right now you will see one recommendation was to do repairs on saddles.

I know your name from in here but can't remember what you can and can't do, and I don't have the connection strength to look around for it.

Heres one path, there will be other replies adding to this and distracting from it.

But first off,

Make a list of everything you can make.

Get pictures of as good a quality as you can manage of everything you have made.

If that range expands over more than one discipline your in better shape than some.

Make a list of all the tools you have, will need, and can do without or make until needed.

Work out what you will need to have in stock and what you think will do your market stall???

If you can get a good ranged portfolio and can cover your costs, it will be greatly beneficial.

Get a website, build it yourself if possible, if you can keep that upto date yourself it will help costs a lot, deisngers are very expensive.

I just took in ten orders for note books for christmas and my paper source just went bust. Now I am stuck in a complete rut, Deposits have been given already...Now I need to spend three times the money just on getting something barely parfor what I had cheaper and better. Tip ALWAYS keep multiple sources you can rely on and have tested material from.

Go round all your local shops which sell anything leather with a portfolio show them what you have and ask to leave flyers, cards or samples if you can afford it.

Repairs are loss leaders, Ie something you will not make money on but wil get your work known, if it's good word of mouth will be your Very Very best sales tactic. Also cheaper or easier to do simple product ranges will get little money in and name out.

Get yourself enrolled on a business start up course.

Go into your local dole office and ask for details there...

Don't go head strong into it and quit your job. But start acting now like you have already, work everything towards business, make thurough notes on all costs and time sheets etc, theres a good download in download section for this. Don't undersell your work, It's a business saying, you can always reduce costs but increasing them is suicidal. Not to mention unprofessional.

Include light heat and other utility bills into costs. If you can prove to the tax office that your living quarters has been converted solely for business use they can save you big money on that, so factor it it, also this will be covered later if and when you need more space. The start up company can provide cheaper than regular office space for some things.

Accounts books, reicpts books, diarys etc all need to be covered, every business transaction must have head and footered details of your company for legal purposes, so printers, and ink also need to be covered, plus any stationary you use.

Don't be afraid to ask friends and family to help out, you might feel like your pressuring them but if can help drum sales it will help a lot as they can also be favourable character references. It's called networking and it's very important to develop the skills. Everyone has a friend who has a friend who can fix pipes or electrics, it's how the world works, but a personal recommendation is always better than finding a card in a shop desk.

If you can sort all this and can write youself a business plan covering all the relevent details if things work and or don't work and can stick to the plan in it and make enough to live on for three years you should make it.

Remember it's not all fun and games, it's a lot of very hard and stressfull work and if you fail you may be bankrupted, if that happens your credit history virtually dies.

TAXES, you have an account friend in training right? If you can't do it fully, you need someone you can trust who can.

Check the other threads around and corelate all wisdom into a spread sheet of actions and things to do and get organised and do it.

And good luck with it.

I hope the ramblings of a not quite yet successfull businessman helps even the tiniest little bit.

[TwinOaks]

I'm a long way from making the move, but helping out with a friend's business I've observed an important lesson:  not only have the right tool for the job, have the right person.  8th sinner touched on a really important one in his post- an accountant.  Even if you're bartering for services, it's better to have people with specialized skill sets to handle certain jobs.  They will be more proficient at the job, and quite possibly more competent.  If your knack is leather, then spending time doing taxes uses "leather time".  I'd be willing to bet that like many folks you're fairly competent at many skills, but can you perform a task as well AND as quickly as a pro in that field?  Perfect example:  I'm an electrician, and this weekend I built a porch.  It's stable, (mostly) square, and the posts are (mostly)plumb.  It only took me 8 hours.  A neighbor who's a carpenter politely pointed out a few errors, and asked why I spent so much time on a three hour job.By having the right people doing the right job, your time is spent where it should be- on leather.

[CitizenKate]

Ray, that's a pretty broad topic. There are so many different scenarios, each with their own considerations. Are you thinking more of selling on-line, from your own web site or from canned online venues such as Etsy or Artfire, from craft fairs, retail store-front, or consignment? What are the markets you want to target?

Kate

[UKRay]

Thanks for the advice so far, guys. All very useful. I posted the request because I know I'm not the only person looking to get out of their day job and into full time leatherworking. The leap is pretty frightening especially if you are thinking of giving up a well paid job and intend to rely on your own talents and skills to feed your family. It made sense to ask for advice from the most knowledgeable people I know: those who are already doing the job or who have been working hard to make the move.

I'd like to take a look at online sales first:

I'm keen to know if anyone is making Etsy or Artfire work for them? I simply don't understand who they are targeting or how to get the best from them?

How many of those with an on-line shop are actually seeing a reasonable income from it? What are you doing to encourage more on-line business?

How can we use eBay to sell leatherwork more profitably - now before you start telling me that eBay is worthless, I would point out that I currently get at least 20% of my online sales from it. It does work and it does make me money but I wonder if it could work better. I also use it as a place to promote my own on-line shop. I'm using it less and less as my own shop gets busier but wonder if I'm missing a trick here. Who else is using eBay successfully and what are your 'secrets?'.

Ray

[swinewerx]

If you feel confident enough, scour the area that needs leather items and become a subcontractor. It is very nice to have this type of side kick. I now have on real subcontract job I do for a lady's saddle bag making business. At first I had to tool of course,then dye and seal it. Now, I just tool it as needed with her leatherand it is predyed without any sealer on the front flaps. It tools rather well , actually better than plain veg tanned cow skins. Not too long ago there were chopper/motoscooter shops everywhere, I had some cool side jobs then, only the saddle bag place remains and I am pretty sure it will, very top notch stuff there. I am pretty sure that there are country western stores/feed stores that you could try to sell items there too. It never hurts to try, besides if you get shot down by the stores, it won't make your birthday/christmas/holidays/or whatever you like go away. all will be well

[CitizenKate]

I'd like to take a look at online sales first:

I'm keen to know if anyone is making Etsy or Artfire work for them? I simply don't understand who they are targeting or how to get the best from them?

How many of those with an on-line shop are actually seeing a reasonable income from it? What are you doing to encourage more on-line business?

I'm on the same path, and though I've learned a few good secrets along the way, and have had some success, I look forward to reading what those who are "ahead of me" have learned as well.

My online strategy has been to sell my specialty items (game boards) directly from my own web site. Then I use Etsy to sell the "small" stuff I make from the pieces of leather leftover from the game boards. I also plan to expand out into other canned venues, just to increase exposure.

I've gotten a few sales from Etsy, but successfully selling your work on Etsy involves almost constant promotion in order to get your work seen. That includes things like frequently listing new or renewed items in order to stay at the top of the default search results (which favors most recently-listed items), being involved on the forums, and various activities to promote your shop outside of Etsy. I, myself, have been on-and-off a lot there, so I haven't really had much of a chance to really get established, but there are a few leather artists who are very successful there.

I actually think it could be better to sell my work in places that are less established (and less crowded) than Etsy, just because it would be easier to be seen there. It's also easier to be seen in those markets, due to the fact that their search engines don't favor the newest listings, as is done on Etsy. So if someone searches for an item similar to what I offer, my item will show up in their search results based more on relevancy, rather than on how recently it was listed. That's my theory. I'm planning to try it soon, and I'll let you know.

But by far, the most sales have come from my own web site (even as outdated as it currently is - I'm working on that!) Right now, the orders are coming at a pace I can keep up with on a part-time basis, with little or no active promotion of the site in the last few years. If I really want to get swamped with orders, I can do one or two things that have proven fairly effective:

• Run a pay-per-click advertising campaign,

• Offer an auction on Ebay.

Any time I have done either of these two things, my site has gotten a flurry of new traffic, and orders to follow. Running a pay-per-click ad campaign can be a little expensive, and has to be micro-managed, but it is very effective in delivering high-quality traffic to your site. Doing this will also provide a boost to your search engine rankings, since it causes links to your site to appear on thousands of other sites. Well worth the money and time, in my opinion. I've always made back what I've invested within a short time.

Another thing you can do to improve traffic to your site, is to find other sites that have related content (especially if they have a "links" section) and ask the webmasters of those sites to add links to your site on theirs. Not only will those sites start steering traffic to your site, but the search engines will increase your site's ranking based the number of other sites referring to yours. My site gets a lot of traffic from the sites of Chess clubs, for example. Their webmasters were more than happy to add the link, once they saw what I had.

How can we use eBay to sell leatherwork more profitably - now before you start telling me that eBay is worthless, I would point out that I currently get at least 20% of my online sales from it. It does work and it does make me money but I wonder if it could work better. I also use it as a place to promote my own on-line shop. I'm using it less and less as my own shop gets busier but wonder if I'm missing a trick here. Who else is using eBay successfully and what are your 'secrets?'.

I've never used Ebay as my primary venue, but it really does make for good advertising venue, a way to get your work in front of the eyes of a very large, worldwide audience who may not have otherwise wandered onto your site through the search engines. Sometimes I've made money from my auctions, sometimes not. But whenever I run an auction, the traffic and sales on my own site always take a leap.

Okay, enough of my prattling... hope this is useful.

Kat

[particle]

Well crafted, informative, helpful posts with a website in your signature line on websites such as this (see Kat's above post, for example) will also drive people to your site. You'll be surprised how often your own posts will come up in Google search engine results.

[8thsinner]

Another bump for subcontracting...Kind of.

Just stole a local craft shops interest in lace production.