Leatherwork And The Economy

[Johanna]

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

[JLSleather]

I do find people are making their own gifts. Translation: not ordering them from me. I really don't know what you DO about it, but people really are concerned more about price than value. At a recent fair, my wife was directly across from a couple girls selling fabric handbags. 4 to 1 they went to look "over there", and of those 'over here" sometimes left upon hearing the price. Granted, couple of them girls WANTED a fabric bag, but most interested in just buying something without putting out much money. This guy I know sells walleye fishing tackle. Nobody buying the $50 tackle box, but a few bought $50 worth of smaller items (long as the bag was full for the $$).

I see crafters (not all of us) who in my opinion have reacted to "tighter" customers by reducing quality, and thus reducing costs. Less quality for the same price. On the other end, I see this with suppliers as well. I don't currently own a decent sewing awl. I ordered one from 3 different suppliers (at more $$ than a good one should cost) and got 3 "bad" tools -- two dull and one was actually dented. I'm driving this weekend to the Tandy (which is closest for me) and I'm gonna wanna TEST an awl. THis is pathetic and should be unnecessary, but if they aren't willing to do it, or the awl won' t cut effortlessly, then I'm not buying it.

While it may be more information than necessary for this forum, I'm DOWN about $3800 for 2010. Not cause for panic, but I'm always aware of where I'm at. I'm "making it" because my sweetie has a good job And I aim at the humorous side of it, but that's the truth of it. The lady who got the Mothers' Day handbag I posted was thrilled, and I'm sure I could have charged more than I did (her daughter paid). But, I don't "scrimp" or "cut corners" that shouldn't be cut, and I don't charge more "because I can". Somewhere in there it becomes a matter of personal integrity -- which you either have or you don't. This, perhaps, is all anyone can "DO" about it ... "police" yourself. If every one of us (crafters) rigidly adhered to superior quality and reasonable price, there would still be those shopping at the discount mall.

[abn]

Jo,

Last night I sat down and refinished a belt I made for myself three years ago. This particular belt had lots of miles on it and was in rough shape. I cleaned it up with a damp rag, applied a light coat of neatsfoot oil, redyed worn areas, and refinished with Satin Shene. I was surprised to find a belt that looked almost brand new, and immediately regretted not taking "before-and-after" photos as proof of the remarkable transformation.

The point is this: a well-cared-for product built out of quality materials can last practically forever. I'm convinced from past experience I would have gone through several imported, factory-made belts in this same timeframe.

I'm wondering when Americans will wake up from this Walmart-inspired fixation with the lowest possible price, and start looking again for quality. Or maybe no one wants to wear the same belt for ten years? Maybe folks are more interested in buying cheap, short-term products that wear out quickly so they can get next year's "latest and greatest" item?

There's lots to ponder in your post, and I'm looking forward to hearing other weigh in...

-Alex

[westtxcowboy1979]

This is kind of off the topic but anyways. I went to a ranching haritage in Abilene Tx, this past weekend and saw several booths with leather goods some were outstanding others I would be ashamed to put my name on. There was a guy there that had a floral carved belt he had priced at $795.00 I about died when I looked at this price there was nothing out of the ordinaryabout the belt matter of fact it was the exact pattern I bought From Hide crafters for my work belt. I started talking to the man running the booth to see If I could find some logic in his pricing but long I spoke with this man all I could see was greed. I do have to say there was alot of compitision at the event there were sevral up and coming leathercrafters and alot of well known crafters. If anyone has a chance to attend one of these events I would highly recomend it.

[Suze]

ok another post from the "not leatherworker"

My family used to sell dollhouse minitures (hand crafted by us) and we saw a radical shift in customer base in the almost 20 years that we sold.

when we first started (in 1980) jobs were not all that scarce and life was good

People would pay $$$ for just about anything if you called it a miniture.

I recall someone varnishing the breakfast cereal CHERIOS and calling them "doughnuts" and getting more money than if you bought real ones to eat. Another was a person who was selling sparkly quartz pebbles for "paperweights"

as the years progressed the economy turned down and you couldn't give things away. (we sort of faded out of the business in about 97 or so, Dad was ill and I found the SCA)

but on the other hand when the economy did turn down MORE people were turning to the hobby - mostly the ones who wanted to craft their own things though. So the people that were selling the KITS were the ones to make the money and the crafters were left with a few loyal customers.

Now in the years we were running the circut we NEVER had the illusion that it was a real money maker for us - more like a marginaly profitable hobby - working a show gave us hotel money and trip money and a lot of good memories of places that we would never have been able to go to otherwise. A 3 to 4 hundred dollar show was "good" for us. I think we topped one thousand once or twice. But then a lot of things we sold were one dollar each, and that is what made the table rent.

[Frank]

I started my full time leather business right smack dab in the beginning of the recession. I started out with saddles and then diversified into gun leather and cowboy gear. I had a hell of a go at it for a while but then things started to pick up a little here and there. Mostly with SASS guys and Cowboy Action Shooters. One thing that happens when we elect a Democrat president is that gun sales always go through the roof.

I'd go a month and maybe make about $200-$300 or so, just enough to keep my hopes up. This last week I did about $700 worth of business just in holsters alone. I think people are starting to come around to the "American Made Product" way of thinking. I let them know that the leather is from US hides and they are tanned here in the US, giving them a chance to keep their own people in business. I hear nothing but compliments from my customers. More often than not, they order 2-3 different items from me after they get their first custom made holster, belt, etc. I give them my guarantee which will outlast the guarantee you get from any "import, factory made" leather item. They really seem to cotton to that and are willing to listen. I've also been offering 10% off their second order up to $250 and 5% over $250, just to give them an incentive to come back. It's a give a little take a little situation right now since we are all feeling he push. And yes, I have traded leather work to get items I wanted/needed and didn't have the extra cash to pay for. Bartering works pretty well in some respects.

Another thing I do that seems to help quite a bit is offer a Veteran's discount. Since I'm a Vet myself, I have heard nothing but great comments from people after they visit my website. Quite a few ordered simply because I am willing to give Vets a discount and they aren't even Vets themselves. I've had customers ask me to send them 20-30 business cards so they could hand them out to friends.

Now it seems I am rambling a bit and could go on forever but I went to a trade show a few weeks ago. I met a lot of great people and took some orders and sold items off the table. The individual who ran the trade show flat out told me that my gear was too nice to sell there. He said that most people at the show were looking for well broken-in floppy type thin gun leather. He basically told me if I sold crap gun leather at the show I would do much better selling. I reminded him that if I wanted to sell items that were already broken in by me, then the people would have to pay $40-$50 more per item. Me being me, I cannot lower my standards just to sell because my name is on the product. If it doesn't meet my specs, it does go in the trash!

Just my 10.5 cents worth there

[mike59]

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

I think this is without a doubt the most critical topic on the minds of most of us in the leatherworking community today. I honestly don't think we can reverse the import issue, which has affected nearly every American trade in this country.

It seems that our elected officials, and our manufacturing giants, etc. have sold us out to cheap foreign labor, and inferior materials. I only hear how great my custom made products are, but the customers don't buy. And how can we fault them, when we are in the same boat they are and continue to support the Wal-Marts and others like them. I began making saddles and ranch gear commercially, not only because I love doing it, but out of necessity. One only has to look at the tools, conchos, and embellishments that we buy to build, and dress up our work to appeal to the pocketbooks of the average customer and know where they come from, to realize we are shooting ourselves in the foot. And we will continue to do so in order to earn a living, or for the hobbiest, hope to defray the cost of investment to achieve a break-even point from a supply standpoint. Forget the labor investment, cause there aren't too many of us that will ever see that investment turn into financial profit.

Having vented all that, I do believe there is a market out there for our high-end products, making a presence there is another matter. It's somewhat frustrating when you make exceptionally well-made, functional, appealing products as so many of the makers who subscribe to this forum do, and find it difficult, if not impossible, to generate the funds necessary to invest in target market advertising, travel and booth fees at the locations where those potential customers will gather, searching for "the good stuff". I'm afraid that the treshhold will only continue broaden and heighten, unless we all stand and deliver. That means forcing change politicaly, and socially, by demanding tarriff reforms,

tax levies on domestic companies that move manufacturing jobs overseas, as well as those who outsource labor to other countries. This move to abolish the "If it ain't made in America, Don't Buy It" slogans, by the commerce department, and foreign affairs people, who say that it only hurts America in the eyes of our foreign friends, and hampers trade, need to take a look around. I feel that the future of not only the superior craftsman, as well as the tradition

of the craftsmanship in our country is at stake, but the future of our children and grandchildren as well. We all, me, you, every last one us of need to stop following the Piper down this road to hell!

Damn! I hate it when ya'll provoke me. Do I feel better now? Not yet.

[kevinhopkins]

Hello all.... It's an interesting time that we live in, that's for sure. As to the leather world, I believe it's changed forever. I do see some positive side effects of the economy tho, in addition to many negative ones.

One positive effect for small business leatherworkers is the consolidation that has taken place. When the economy was in it's bubbly part, it seemed that anyone could slap something together, and sell it, and call themselves a business, crafter, or whatever. But with people being more conservative with their funds, and being more conscious of value, practicality, and customer service, the folks that haven't been able to adapt to that mentality on the part of their customers have either not done well, or gone away. It also seems to me that business people in this country have become accustomed to living in a rut that was established years ago. Many have discovered that what used to work in the past, simply doesn't anymore. And because of reluctance to expand or change or diversify, lots of businesses have simply vanished. At any rate, there are still a lot of people that want custom leather products, and there doesn't seem to be as many people that are able to supply their needs as there used to be.

The town that our business is in isn't all that big, but it seems like our shop could stay open 24-7 doing nothing but small custom projects if we wished.

Also, I think that in the past, a realistic price for custom leather work was often sacrificed simply because many crafters didn't have the right equipment to make it possible to produce a quality product within a time frame that actually allowed for a realistic profit. The changes in the sewing machine world have made it possible for many leather workers that were doing things by hand, to actually open doors to many opportunities that simply weren't available to them previously. I don't think that I could count the number of folks that have entered the holster making world because of the first Toro 3000. As well as the large number of folks that purchased a post sewing machine and started selling their handbags at various craft shows. I've known many knife makers who bought a heavy stitcher, just to make his sheaths more professional

looking, only to discover that now they could supply someone with a significant number of knives per month, and actually make some decent money.

And the vast amount of information and experience that is available to folks thru the web has helped many to get their business off the ground as well.

I could go on forever about this stuff, but I need to help a customer! Sorry if I've stepped on any toes1

Kevin