The Leather Business - A Rant

[Ian]

This is a rambling Sunday morning rant just getting things off my chest and wondering out loud.

I'm sitting here wondering about the feasibility of the leather business. I've been tackling it from various angles for about 15 years now, trying to make it pay as a full time business. I generally get 2-3 custom orders a week (ranging from gun belts to motorcycle seats and bags, chaps, etc) plus small stuff like repairs, sewing club patches, etc. I'll tell you, more than half the time there is little profit in it. I've gone at it from the angle of selling only ready made products, belts etc, but that only covers the expense of a space at a trade show, travel, etc.

At one time I had a regular store front business and am considering re-opening, learning from the business mistakes of the past, but I'm leary of investing the 40 grand or so it would take to rent and stock a small store in this time when small businesses are almost a thing of the past. But, the couple of years I was open were the most enjoyable of my life - meeting such a variety of people and the huge scope of the orders I got were a real learning experience. Do I try again, putting more into promotion, re-developing a customer base, etc? I don't know.

Every time I see a rack of Chinese made belts marked 'genuine leather' but are actually 99% plastic, I want to punch something. But this is what we compete against. Are there enough people left who will pay 4 times the price for a hand made item, when every store is loaded with cheap fakes? Where is the Federal Trade Commision when it comes to this outright fraud? When you can pay half as much for a bonded leather couch as for a custom made motorcycle jacket......and about 10th of the price for a Pakistani made jacket, what will people choose?

One of the problems I have is finding suppliers - and I've ordered from every one of them over the years. Some recent examples include a set of bags. I spent a large amount of time trying to find a color match for the customer's seat, and when I recieved the side, it was many shades lighter than the swatches I was sent - and dirty to boot. Unfortunately, I had cut into the side already before the customer rejected it, so there was no returning it (which would have added another 25 bucks to my cost anyway), so, there was over 100 off my profit. This has happened so many times, from so many suppliers, that I can't count. Leather that gauges wrong, different color, damaged, etc. Profit quickly dissapears when only half a hide is usable, and customers aren't that interested in hearing about supplier issues - they want a clean, well made product.

Recently I decided to splurge on a new machine. Now, granted a $2,500 sewing machine is low end, but the marks the foot leaves are so severe, I could never ask a customer to accept that. The supplier kindly offered to make some custom alterations to the foot, and I'm looking forward to seeing how it turns out, but jeez, wouldn't you expect that such an issue would be taken care of in the design stages of the machine? If it doesn't work, I have an expensive doo-dad gathering dust in the garage.

It seems that over the years I have spent as much time (and almost as much money) learning every aspect of leather work, pattern making and construction as it would take to earn a medical degree, but is there value in this knowledge? Perhaps if I'd focused on learning high end saddle-making from the beggining, I might have had a shot, and I admire the heck out of what those guys do.

From time to time something big happens, like right now I've been asked to develop a product for the state police, but those are few and far between.

So, anyway, If you sat through my rant, thanks. Just feeling kind of frustrated right now, wondering if I haven't been chasing this thing long enough. My shop has gotten too small for all the equipment and leather, and need to rent a bigger workshop. Should I, or should I just sell everything and move on......I don't know.

[electrathon]

_{I often see people traveling in a poor direction on hobby/career/small business working. You open a bigger shop and $3000 more has to be earned just to break even. If you work out of the space you have you often have less stress. Make QUALITY and sell to the small group. You can not compete with China and the mas production issue. You can blow them out on the quality that they can not do. The internet gives all of us the ability to market to a wide range of the world that you never had before. Sell with a gimmick: Personal service, Big business can not offer this. Then actually provide the personal service.}

[WScott]

Good rant, hope it feels better to get it off your chest!

All industries have the fight with the New World Economy...it is the new reality. Hopefully substance, service and quality come back into popularity rather than cheap, immediate and flashy.

Learn from the business mistakes of your past....what is different now than from when you had to close down? What will you do to survive the monthly bills? Is there a market close by for your products? Can you afford the risk, loans and stress?

Staying in a small "lean and mean" workshop, marketing through the internet and shipping to customers might be a better idea than a bricks and mortar store with a lease. Certainly in a regrowth phase lean and mean lets your business build before you get ahead of yourself debt wise.

Money stress makes people take on foolish and risky clients, projects, cases etc.

I run my own business for a living in healthcare,the same principals apply.

JMHO

I wish you well, Scott

[DoubleC]

Lan these are good questions you're asking yourself and ones 95% of us struggle with all the time. I just jumped in head first into the murky waters of buying a sewing machine that hasn't arrived yet because I can't keep up. Yet my profits to date don't really justify such a purchase. I'm gambling that my profits will increase with it in order to pay for it. I sell at the local farmer's market twice a week and sell very little premade stuff so the majority of my business comes from custom orders. So while it keeps things interesting there's also a learning curve every week. To illustrate I'm currently working on recovering a chair and a woman ask me to make her some 3/8th " purse straps to replace some that were plastic and broke. The purse probably didn't cost what I had to charge to replace them for her. To make it worse where we sell is practically in Walmart's parking lot LOL. I had a guy show me a 16.00 wallet he got there and asked me if I could duplicate it......for 16.00. I'm still chuckling about that although that may not have been my best customer service I've provided.

But you know only you can answer these questions for yourself. All businesses I think deal with a poor supply occasionally and that should just be written into your equation when you look at your business plan. Supplies are going to arrive late, damaged, different than what you expected. Customers are going to expect more when they buy hand made rather than less because the Chinese stuff 'looks good' even though we know it's not going to last. I'm replicating a Chines belt right now that's giving me fits on the embossed design it has on it. I can't get it to scan straight and it's going to need taped to the belt when I do to get it on without it sliding. I've been asking myself some of these questions recently because I am slow and I want everything perfect as I can get it when the customer gets it back. I wish I could answer them for you but I can't answer them for myself. Good luck. Cheryl

[raysouth]

Hello Ian, or is it Lan?

Good advice/suggestions from folks above.

Years ago, I also operated small business, one of many over the years, but today I doubt if I would go it again with conditions as they are.

Operating from homestead helps control cost and folks will come if you have the product they seek and can compare quality or simply desire the best.

Your rant is something that many folks are experiencing so it has been beneficial for others to see that they are not alone.

Even today, I feel pressure that I should not be feeling but won't get into that. Just grab a cold, (whatever you prefer), take off and find a relaxing spot, imagine that you are above the clouds and floating away from all the trials and tribs. of today.

You will find a way and it will be a good trip.

Be well, my friend.

God Bless.

Ray

[Ian]

Thanks for the very good advice. I'm lucky that I have a job that pays me well in addition to the leather business and foolishly thought I'd quit that to do the leather business full time again. The thing with part time is that I'm in the shop every day on the weekend and at night, so everything else is put aside. It becomes more of a chore than why I got into leather in the first place - because it's so much d**n fun. So there is a big attraction to working 5 days full time in the shop. Just unrealistic. I'm thinking I'll spend a few bucks to insulate and sheetrock the 2 car garage, install heat, etc. So I'll be adding value to the house as well. I guess all the other frustrations go along with the business.

Oh, Double C the machine I'd been using is an Aerostich pnuematic. I used to cuss about it all the time, but what a joy to be sewing with that one again today. I don't think you'll ever regret buy a machine. You'll be amazed at all the different things you'll be making once you get it.

[Ian]

Thanks Ray....very cool message. Spent half the day polishing the bike, finished a gun belt and am feeling a lot better about the whole thing. In six years I'll be joining the Social Security crowd and I can be the old hippy I always wanted to be.

[DoubleC]

Thanks Ian, I'm pretty excited about it. I got a great deal on a Cobra 4 because it's white. A factory mistake. I can't wait until it gets here. I'm glad you had a relaxing day and hope you are happy and relaxed about your decision. Cheryl

[Cyberthrasher]

One thing I pulled from your rant is that your customers seem to have been expecting manufactured results instead of that variances that come with a handmade organic product. I'm not saying you're wrong in your frustration on consistency, but it's also important to educate our customers on the facts of custom leather. No two pieces will ever be the same and there are no guarantees. If I ever had a customer tell me I HAD to color match an item they already had, I would say "I can try to come as close as possible, but exact matching would be pretty hard to come by". Usually if it's worded right, they understand. Most of the time, once their item is done, they're amazed at how much better it really is than the item they originally wanted matched. That's the root of the problem we face, an un-educated customer base. No, we'll never compete with the Chinese market because 95% of the population thinks that's what they should be paying and they'll accept it. Our goal should be to wow and amaze the other 5% and try to get them to influence the rest.

I have these same thoughts quite a bit (about leaving the day job) and I've decided that once the income from leather starts to equal out really close to my day job, then I'll consider it. Until then, I have a lot of fun with leather and my customers know that I'm here to support them. If I were just throwing stuff out the door, there's no way I'd be satisfied because it wouldn't be the work I enjoy the most. As an artist, I'd much rather take my time and put out really cool work then just rush out simple stuff for some extra bucks.

[cjdevito]

I'll never be able to make as much money with leatherwork as I make at my day job. Forget about my skill level, which is low... even if I were one of the best, it wouldn't be enough to compete with my regular salary. On one level that's a damn shame, because I enjoy the leatherwork a hell of a lot more than I enjoy my day job. On another level, though, it's a blessing - it keeps me from seriously contemplating going into the leather business, no matter how much I enjoy working with leather.

So my plan is simple. I have another 20 years or so til I can retire, and when I do that will be with a great pension, SS, and a retirement fund. I figure I can use the time between now and then to improve my leatherwork til it's a level where I could feel proud enough of what I make to sell it, then when I retire I'll go into the leather business then. I won't -need- that income, so I'll still be able to have fun with it without having to worry about putting food on the table with it.

I can't say whether the leather business is the right call for anyone else as a way to make a living. Just that in my own case it's not. Being able to look objectively at it, no matter how much you love it, is key to figuring out your own answer.

[cdthayer]

Small retail store fronts will soon die out. Small service store fronts will continue to increase. For about any kind of product.

Concentrate on services. Repairing poorly-made products is where the money will be for the foreseeable future. Any spare time can be used for making your own quality products and having them available for sale or as samples to sell good stuff to the people that came in for repairs on not-so-good stuff.

Always consider the money spent on Trade Shows or any other remote sales venues as advertising only, not meant for profit. You'll feel better about getting skunked that way. If you do happen to bring home a few hundred, consider it return on investment of your advertising. Just don't expect it next time.

A service store front is best located well away from the Big Box stores in the older part of town. It's cheaper to operate it, you'll keep more of the money that you take in, and people will still come to you for repairs when they wouldn't normally be in that area to shop. Back yard repair shops are about the same. People will open and close the gate, follow the sidewalk around the house to the workshop, ring the bell, and wait patiently while the dog is barking at them for someone to greet them. But they'd never go there to shop for new merchandise. Why? Because they think it's the best place to get cheap repairs on their expensive stuff. And they're usually right. Lower overhead usually means lower prices for the customer and more profit for the shop owner. But once there, they often will buy quality stuff.

CD in Oklahoma

[Ian]

Yes, the reality is a sobering thing. I'm remembering the days when hundreds of small owner-operated businesses flourished - shoe and clothing stores, hardware stores, pet shops......I look around my town, and there's barely even a privately owned restaurant - everything is a national chain. I travel a lot, and from California to New York, every shopping mall has identical stores. I used to love hanging out at the feed store, until a Tractor Supply moved in down the road and that store closed. It's nice having a huge variety of products, but we sure have lost a lot in terms of human interaction.

Opening a full time business will mean lots of hot dogs and beans. But I'm still not 100% convinced that it's not a possibility...........

I bought an Adler flat bed machine from a guy who used to have a small awning business. One day he was offerred a contract sewing job making some kind of filters for manufacuring. He ended up with 7 employees and was grossing a million and a half a year before the imports floored him. But, stories like that always give some hope that putting yourself out there will result in the 'big break'. It keeps me going anyway.

Edited July 26, 2013 by Ian

[BIGGUNDOCTOR]

Running your own business has it's drawbacks, but I was never happier working then when I had my machine and fab shop years ago. I actually think that now is one of those golden opportunity time to start a new business. The problem is with any craft based profession it is a tough sell to customers that have gotten used to big box prices - I have termed it the Wal-Mart effect. You may want to check out Dave Ramsey's book Entreleadership which is written for entrepreneurs. When dealing with custom stuff, involving the customer can save some headaches. When dyed material comes in, have them approve it before you cut into it. The best advice I can give you is do your research, start small, and most importantly avoid debt at all costs. Build up to where you want to be, don't start off there. When I had my shop, my partner and I cash flowed the entire operation. Every piece of equipment in that 4,000 sqft shop was paid for. Auctions were the only way we could buy equipment at affordable prices. On average we were paying 10 cents on the dollar compared to new. We knew we could afford something when we had the cash to pay for it. That was the best decision we did over the 6 years we operated. When we were forced to close due to outside forces we were able to keep all of our equipment without fear of repossessions. Work from home as long as you can.

[EquusCustomLeathers]

Working from home is definitely the way to go these days, if that is possible. The only drawback is that it tends to take over your every waking moment. If you have the self discipline to "turn it off" for certain times, you can do quite well with a small business at home. It's a lesson I learned the hard way

[WScott]

Running your own business has it's drawbacks, but I was never happier working then when I had my machine and fab shop years ago. I actually think that now is one of those golden opportunity time to start a new business. The problem is with any craft based profession it is a tough sell to customers that have gotten used to big box prices - I have termed it the Wal-Mart effect. You may want to check out Dave Ramsey's book Entreleadership which is written for entrepreneurs. When dealing with custom stuff, involving the customer can save some headaches. When dyed material comes in, have them approve it before you cut into it. The best advice I can give you is do your research, start small, and most importantly avoid debt at all costs. Build up to where you want to be, don't start off there. When I had my shop, my partner and I cash flowed the entire operation. Every piece of equipment in that 4,000 sqft shop was paid for. Auctions were the only way we could buy equipment at affordable prices. On average we were paying 10 cents on the dollar compared to new. We knew we could afford something when we had the cash to pay for it. That was the best decision we did over the 6 years we operated. When we were forced to close due to outside forces we were able to keep all of our equipment without fear of repossessions. Work from home as long as you can.

Great post, like what you say about debt aversion and financing yourself.

This would be an interesting thread to hear from those who had troubles, what happened and how they reacted to survive...or not.

[BondoBobCustomSaddles]

Lan, all the things that everyone says are true. You seem to have hit a "real beer drinking day". All I can say is, why did you get into leather in the first place? If it was to make a living, then I will tell you that the most and consistent money I ever made at leather was working the race track for tack repair and making goods for the horsemen there, however; that was during the summer and I spent 7 days a week 10 to 12 hours a day banging out repairs and goods, ( 1200 horses tear up a lot of stuff!!!). That left me no time to do what I like to do, ride some, make really good artistic saddles, and just putz . If you can find a nitche that meets your needs and allows you to enjoy it, you are ahead of the game. Only you can figure out what that is, it is good when you find what it is that makes you happy. Good luck on your quest. Bob

[Murf]

Ian, every few weeks I work with a custom hotrod interior guy learning the trade when I have weekends off. He gets his leather from a tannery in canada. Im not sure if they handle Veg tan but i know that every single time we have needed a specific color hide they have delivered without question the exact color we were after. We usually pay about 450$ per cow (really odd i know, to buy by the cow) and these are quality hides. Ive read the pamphlet we have at the shop and there isnt even barbed wire around these cows for fear that it might damage the future product. Ill get the info the next time i go and post it here. If they dont handle Veg someone will at least get some info on some great interior leather.

Ps. Ive watched your video on tool pouches for bikes and it really got me into the bike leather part of the craft, you may be at your wits end with the business end, but on the crafting end you are great at what you do and have showed me a thing or two.

[Dwight]

Leatherwork is no different from other business ventures, . . . in the truly "business" end of it.

Find some part of it at which you are good, really good, or great: concentrate on that area. That is the way businesses have always survived.

Example, . . . where would Ford be if they had continued making the Edsel, and had forsaken their other lines? In the ditch with Yugo, Studebaker, and Frazier.

IF YOU HAVE TIME, every time you make a custom piece, . . . make 2 of them. One you sell, . . . the other is for craft shows, inventory, immediate sales, etc.

Yes, you will wind up with some dusty old pieces in a cardboard box that no one wants, . . . but you will also get some quick sales.

As a personal anecdote, . . . I took one of those boxes with me to a gun show with some friends, . . . borrowed a corner of one of their tables, . . . unloaded the whole box for $10, $15, and $20 a pop. Came home with a nice bunch of folding money, . . . and some better ideas of what my customer base wanted.

The other day, . . . I made a serious mistake on an IWB holster, . . . after an accident in the drying room ruined another one, . . . between the two, I now have a new product line to offer, . . . higher end, . . . better prioduct. All because of a couple of accidents.

I'm actually getting ready to put my sign out by the road, . . . holsters, belts, chaps, and saddle repair. I'm certain that as soon as it is visible to the public, . . . I'll be busier than ever before. But those are the areas of my interest, . . . I enjoy them, . . . makes all the difference in the world.

May God bless,

Dwight

[bizbeblu]

I'm a newcomer here so take my views with a grain of salt if you must. I've been in and out of business for myself multiple times over the last 30+ years. I have periodically gone to work for others (principally in an educational bureaucracy) and it never turns out well. I guess I'm arrogant - have been accused of it more than once - but I just can't work for someone who isn't at least as bright and dedicated as I am. My tenure in any bureaucracy (governmental or business - doesn't matter) will be a short lived thing.

I have several crafts and trades. The only one I ever made a complete living at was as a master carpenter doing historic restorations. It will surprise no one to learn that such business has utterly disappeared in the "Great Recession." I work in leather, wood, and am a reasonably successful photographer. Between the three and a fair amount of hustling, I make a living in part because I keep my cost of living very low. I'm not sure how to advise the OP as I could never be a "shopkeeper." I'd just go crazy. There are many times that my best work is done at say 2:00 AM thus flexibility of work time is critical.

Virtually all of my work is sold word of mouth. This is a truly poor community. When the mine shutdown there really wasn't much left. We do "eat the tourists" in the winter time when the population doubles with folks from WI and the Canadian prairie provinces. But even they don't often recognize the real value of hand crafted excellence. Nearly all my work comes via word of mouth thus there's no need for a retail outlet. I require 50% down, that I'll only refund if I haven't started on the project. I've never had any objection to that. I draw a small amount of work off my web site. I make it explicit that once you agree to the commission it's 100% upfront and there is no refund for anything. On the other hand I have on occasion reworked and even redone things when a piece just doesn't strike the customer as beautiful. I've lost money on rare occasion, but consider that a part of excellence and acting honorable.

With local customers everything is face to face and I've never had any problem. I consider the overhead of a physical space just too much to bear considering the outcome. By overhead I don't mean just the rent, utilities, fees, etc., but the fact that by opening a business and posting a sign (with my hours) I've entered into a contract with any and all potential customers. It's just not a commitment I'm willing to make. So I get by on word of mouth, some Internet and I'm slowly developing outlets in local businesses that are willing to be merchants. I figure 30% is far less than the cost of a store front and am not bothered by it at all.

On the other hand, I have known people who really enjoy having customer interaction and the day-to-day intrigue of "who or what is going to happen today?" If you are that type of gregarious person then a storefront might well be a good thing. Do make sure you have a sound business plan and the capital to keep you going for at least a year.

There really is no answer to the "Why is your stuff more expensive than Walmart?" As a culture - assisted by a great deal of advertising and even political support - we have become obsessed not only with consuming but also having everything. I prefer a few well made, well crafted things than one chintzy copy of everything. The Walmart mindset is that you can have it all (though it likely won't last more than six months and was made by slave labor in Bangladesh or China). I go out of my way to try to by local and buy directly from the producer or maker. I believe that if my work is of higher value, then buying in the Walmarts of America would make me a hypocrite, so it has to be a real emergency to get me in their doors.

I remain cautiously optimistic that high quality, unique work coupled with personal and excellent service can keep one alive. Alive, but likely never rich.

Robert