Where is the money in leatherwork?

[pacopoe]

I make a living from leatherwork but I have to say the key to doing so is that you have to love business more than you love your hobby. I mentioned it in another thread but there's a book called "The E-Myth" that is really good at explaining the different hats one must wear when creating a business. If you solely love leatherworking but don't like business planning, marketing, or bookkeeping then you're probably better off working for someone else. If you do love all those things, however, then it can be a truly rewarding experience. I've had my business for 9 years now and it's been my primary source of income for 7 (though I should also mention that I'm perpetually broke ).

Pricing is a biggie if you're going to stay competitive. We sell wholesale and retail so our model is

Cost of Goods Sold (materials + labor + % of expenses [internet bill, rent, etc]) x 2 = wholesale price

Wholesale price x 2 = retail price

Of course, you have to balance that out with what customers are willing to spend but if you start higher then you have room to bargain down, versus starting low and having people walk away with product for next to nothing.

Growth is something that you have to account for from Day 1. If the business is to be you and you alone, then it can only grow as large as you can handle. At some point you will need to scale back (if things are going well, that is). I love delegation (my bf calls me Tom Sawyer ala the whitewash fence) but if you don't then you need to calculate how much time you have to spend on your business daily (x amount of hours leatherworking, x amount of hours emailing/calling, x amount of hours shipping, etc) and make sure to charge for your time accordingly. Remember, if you weren't doing that emailing and shipping yourself then you'd be paying someone else to do it, so the price of that time needs to be factored into the price of your product as well.

In our case, we've taken one product (dog collars) and streamlined the process. We do every step by hand, choosing to have skilled labor over a machine. I've met a few companies who have made large machine purchases to increase volume but are simply spending all their earnings paying back loans, which is not good business (and then one of those companies started mass replicating one of our designs... also not good business lol!). By keeping the offering down to one product that can be customized we've been able to target marketing and keep our customers happy.

Just because you *can* do something does not mean that it's profitable for you to do so. We also regularly turn down jobs that are beyond our means. For instance, right now we don't have a leather sewing machine so it would all have to be by hand, it takes someone about three times the time to produce a stitched collar so we'd either have to charge accordingly (which the customer doesn't want to pay) or just pass, so we pass. Right now we're doing a line of hand-tooled collars which I have to personally make (and I love doing them) and while I think we're charging a fair price, my employees are arguing that we should charge more since I could be making 4-5 regular collars in the time it takes me to do one carved collar, but we only charge about twice as much for a tooled collar. It's a delicate balance.

Ebay is a terrible platform for selling, people are just in it for the bargain, and Etsy isn't much better. Word of mouth is the best kind of advertisement, but you still need a steady influx of customers. We dabble in a wide variety of advertising but have found the two most profitable avenues by far are in-person trade shows and Facebook. Since we don't have a huge advertising budget, it's key that we ask customers for feedback about how they heard about us so we can concentrate our efforts there, and those two places are our far and away winners. Our one magazine advertisement is also a steady producer (we've tried several publications over the years but only one pays off so we pulled back on the others and sunk more $ into the winner).

They say the key to business is risk-taking but I'd have to amend that to "educated" risk-taking. I know of new businesses who put all their eggs into one basket just to see it flop. Since my company has always been self-funded from our profits, I've never had the luxury of making big ticket mistakes. Instead, it's all about sending little feelers out in many different directions, seeing what hits, seeing what doesn't, and then concentrating efforts in the winning area while retreating from the dead ends. You won't know if it works unless you try it, but no sense sticking your whole neck out on the line.

[mike59]

I make a living from leatherwork but I have to say the key to doing so is that you have to love business more than you love your hobby. I mentioned it in another thread but there's a book called "The E-Myth" that is really good at explaining the different hats one must wear when creating a business. If you solely love leatherworking but don't like business planning, marketing, or bookkeeping then you're probably better off working for someone else. If you do love all those things, however, then it can be a truly rewarding experience. I've had my business for 9 years now and it's been my primary source of income for 7 (though I should also mention that I'm perpetually broke ).

Pricing is a biggie if you're going to stay competitive. We sell wholesale and retail so our model is

Cost of Goods Sold (materials + labor + % of expenses [internet bill, rent, etc]) x 2 = wholesale price

Wholesale price x 2 = retail price

Of course, you have to balance that out with what customers are willing to spend but if you start higher then you have room to bargain down, versus starting low and having people walk away with product for next to nothing.

Growth is something that you have to account for from Day 1. If the business is to be you and you alone, then it can only grow as large as you can handle. At some point you will need to scale back (if things are going well, that is). I love delegation (my bf calls me Tom Sawyer ala the whitewash fence) but if you don't then you need to calculate how much time you have to spend on your business daily (x amount of hours leatherworking, x amount of hours emailing/calling, x amount of hours shipping, etc) and make sure to charge for your time accordingly. Remember, if you weren't doing that emailing and shipping yourself then you'd be paying someone else to do it, so the price of that time needs to be factored into the price of your product as well.

In our case, we've taken one product (dog collars) and streamlined the process. We do every step by hand, choosing to have skilled labor over a machine. I've met a few companies who have made large machine purchases to increase volume but are simply spending all their earnings paying back loans, which is not good business (and then one of those companies started mass replicating one of our designs... also not good business lol!). By keeping the offering down to one product that can be customized we've been able to target marketing and keep our customers happy.

Just because you *can* do something does not mean that it's profitable for you to do so. We also regularly turn down jobs that are beyond our means. For instance, right now we don't have a leather sewing machine so it would all have to be by hand, it takes someone about three times the time to produce a stitched collar so we'd either have to charge accordingly (which the customer doesn't want to pay) or just pass, so we pass. Right now we're doing a line of hand-tooled collars which I have to personally make (and I love doing them) and while I think we're charging a fair price, my employees are arguing that we should charge more since I could be making 4-5 regular collars in the time it takes me to do one carved collar, but we only charge about twice as much for a tooled collar. It's a delicate balance.

Ebay is a terrible platform for selling, people are just in it for the bargain, and Etsy isn't much better. Word of mouth is the best kind of advertisement, but you still need a steady influx of customers. We dabble in a wide variety of advertising but have found the two most profitable avenues by far are in-person trade shows and Facebook. Since we don't have a huge advertising budget, it's key that we ask customers for feedback about how they heard about us so we can concentrate our efforts there, and those two places are our far and away winners. Our one magazine advertisement is also a steady producer (we've tried several publications over the years but only one pays off so we pulled back on the others and sunk more $ into the winner).

They say the key to business is risk-taking but I'd have to amend that to "educated" risk-taking. I know of new businesses who put all their eggs into one basket just to see it flop. Since my company has always been self-funded from our profits, I've never had the luxury of making big ticket mistakes. Instead, it's all about sending little feelers out in many different directions, seeing what hits, seeing what doesn't, and then concentrating efforts in the winning area while retreating from the dead ends. You won't know if it works unless you try it, but no sense sticking your whole neck out on the line.

This is by far the best information yet on the topic! Thank you for taking the time to post it.

Mike

[belliott]

A friend of mine has a very successful saddle business. He employs his brother and has a few guys that drift in and work part time as well. He builds custom saddles. The majority of saddles that leave his shop are award or trophy saddles for rodeos,barrell racing and roping competitions. His brother builds 3 of the troghy saddles a week. The owner works on the custom saddles when he is not answering the phone, ordering materials, dealing with sales reps or dealing with crazy customers.

I think there will always be a market for what I call "cowboy art" products. Saddles,purses,walletts,chaps,rope bags and etc. I always believe this is the most competitive market along with the biker industry. I am working on my own niche as we speak. I'm not ready to reveal what it is and you will see why in a moment.

I think purses and boots are a good market. I think alot of crafts-folk over produce their goods. I say build a purse and make it a perfect 1 of a kind or maybe a run of 10. Try to build a product that can be appreciated for what it is, a piece of art. I believe in this age of the internet, where you can learn anything in forums or Youtube, items get copied. If you start producing a popular line of purses at craft shows or for ebay, within a month someone will be producing your design or using your marketing ideas.

I say keep production runs small and build your name. Produce an item and move on to the next design, keep innovating and building quality products. Stay out of debt, be frugal and the money will come.

[BenB]

I make a living from leatherwork but I have to say the key to doing so is that you have to love business more than you love your hobby. I mentioned it in another thread but there's a book called "The E-Myth" that is really good at explaining the different hats one must wear when creating a business.

I agree that "The E-Myth" is a must-read for anyone wanting to run a business to support themselves, regardless of the trade.

The information in this thread has been enlightening. Thank you to all the contributors.

[Hell Bent 4 Leather]

If you're getting into leather work to make a living, you should stick with dog training. Leather work is an expensive hobby, and that's the way it usually starts out, doing it because it's something you enjoy. After a while of practicing and getting better, you may start seeing a little money from it. To start out with, I'd start with something to compliment your current business, custom personalized dog collars, and anything pet related that you can think of. As your projects get bigger, and more people want your leather goods, you may be able to make the transition that way. I've been doing this for about six years now, and I'm just now starting to see a little money come in occasionally from it. It would be great to do it for a living, but it's just not realistic for me to think that is a possibility right now.

Hello all

I have three wholesale customers for my sheepskin pet toys and leather leashes, but small ones. This is not my primary source of income. I am a dog trainer and work at a pet store (and at Starbucks part time for the insurance benefits...). Needless to say, I have a lot on my plate.

I am in the process of deciding where to put my time, business wise.

I have a lot of questions about the leatherworking business. I hope I am not being impolite, since I've been told that people don't always like talking about money... at least their own:>))

Here goes.

Where is the money in leatherwork? Who is making a very good living and why? My guess is that small goods made quickly and easily as well as high end artisan driven projects are the two areas of greatest success. And I am asking about the individual craftsperson, not the Weaver Leathers of the world.

How many people who are doing a decent business start to farm out work and what kind and why? When does it become a factory and not a hand made art?

What can a decent craftsman make in a year if he has a shop, or a website, or does fairs? Are there other venues for sales?

Where is the cost in leatherwork? What does it require as an investment for tools and materials? I'm interested in all fields, from bootmaking and saddlery to tooled items and of course dog and horse tack.

I know these are big questions and I'm trying to get a sense of the entire field, but this is a fairly occult field compared to say, accounting, and the information is mostly passed, like the craft, from master to apprentice. Or are there sources for business information out there that someone can point me towards.

Thanks in advance

LA Pat

[Massive]

"Right now we're doing a line of hand-tooled collars which I have to personally make (and I love doing them) and while I think we're charging a fair price, my employees are arguing that we should charge more since I could be making 4-5 regular collars in the time it takes me to do one carved collar, but we only charge about twice as much for a tooled collar. It's a delicate balance."

My rule is that if I am making money, and have only myself to please, then I can afford not to be too aware of what the specific costs are. This carries on until I go through a process of being ticked at the fact that maybe only I value the "extra", and should start charging for it.

There are often ideas in a craft that don't really bear examination, create a lot of work, and don't really lead to a lot of dollars, but they amount to what the customer understands the value to be. If customers come to believe that hand sewing is better, notwithstanding that some modern machine sewable threads are now stronger than steel, and very abrasion resistant, sometimes one needs to just get out of the way, and hand sew the stuff. Or hand sew enough that they have confidence in buying your machine made stuff.

[Sylvia]

It is true that a small business owner must wear a lot of hats in order to be successful. I find that many people focus only on the cost of making an item and not the cost of marketing or promoting the item. As a case in point: Packaging of smaller goods can run a pretty penny. Online websites need someone to keep it up to date... and that costs time if the owner is capable in the medium. Even something as simple as packing things up and driving to a trade show, an event... or even a flea market, all must factor into the "cost of good sold"

If you hate the particulars of accounting and Marketing your goods, then it would be an easy thing to hire a part time helper to come in 2x a week (or month) via a temp agency to tend to the bookkeeping and website. That too would need to be factored into the "cost of goods sold" but then it also frees the Leather worker to do what he or she does best.

Anyway, that's my 2 cents.

[lonerider]

I've been making Cowboy Leather for 9 years so far. I have a website and advertise in the SASS Chronicle. Word of mouth is the best thing you can get! I'm about to stop all advertising, I'm hemorrhaging money that way!! Cowboy Leather has slowed down to a slow crawl lately so I'm starting a "Carry Holster" line and have already set-up a few Gun Stores to sell those. Not as much profit margin in them but it only takes about an hour to make a Leather backed Kydex holster!! Compared to a week for a complete Gunrig, belt and two holsters! The main thing is to make a quality product and be flexible to your customers need and wants! I started out making rigs cheaper than anyone else but now I'm almost up there on prices with the Big Boys and I will customize it how the customer wants.

[Kcinnick]

I've been making Cowboy Leather for 9 years so far. I have a website and advertise in the SASS Chronicle. Word of mouth is the best thing you can get! I'm about to stop all advertising, I'm hemorrhaging money that way!! Cowboy Leather has slowed down to a slow crawl lately so I'm starting a "Carry Holster" line and have already set-up a few Gun Stores to sell those. Not as much profit margin in them but it only takes about an hour to make a Leather backed Kydex holster!! Compared to a week for a complete Gunrig, belt and two holsters! The main thing is to make a quality product and be flexible to your customers need and wants! I started out making rigs cheaper than anyone else but now I'm almost up there on prices with the Big Boys and I will customize it how the customer wants.

Sounds like I am executing your strategy, just starting with concealment leather and casual gun belts. I haven't even started marketing and I had 6 orders for gun belts last week just from word of mouth.

[WScott]

This is a really interesting topic and does speak to the changes in society and it's value (or lack thereof) of craftsmanship.

My woodworking site has had similar threads questioning how to make $ with similar pattern of comments.

I am a hobbyist in both leather and woodworking, taking pleasure from hobbies to get away from stress of my profession.

I don't envy those of you slugging it out for a living

This is a really interesting topic and does speak to the changes in society and it's value of craftsmanship (or lack thereof).

My woodworking site has had similar threads questioning how to make $ with similar pattern of comments.

I am a hobbyist in both leather and woodworking, taking pleasure from hobbies to get away from stress of my profession.

I don't envy those of you slugging it out for a living