Category Archives: Doing Business

Generally day to day business sorts of posts.

Things To Consider When Buying Handmade Items From Small Businesses

I’m updating this post because I think it needs to be read / reposted a couple times a year to educate people.  The reason that the phrase “starving artist” is so common is because society wants and needs art but doesn’t tend to value it until the person is famous or dead.  For some reason, many folks seem to be under the impression that artists should only charge what it costs in materials to make the art piece and never mind how much time, effort, training, and years of experience it took to create it.  I’m a self employed artist and just making my costs back doesn’t get my bills paid.  I put a lot of time, effort, creativity, and love into my work.  I have to love what I do because otherwise doing all the hours of work I have to do and not get paid for until I sell the thing would not be worth it.  Nobody goes into business for themselves just to break even.  Think about it.
The first thing you need to remember is that small business people do not have the buying power of mega companies.  Even with a re-seller permit I neither have the room or the wherewithal to purchase my supplies in the bulk amounts that those sorts of business do so I can’t get the kind of discounts they do.  For the most part, my reseller permit simply allows for me to not pay sales tax on items I buy that will end up being part of the completed item sold to a customer (does not include tools I keep) because I have to charge and collect the sales tax when I sell the item.  Otherwise I would be paying double the tax.  I do what I can to keep costs down and I shop around.  All of that takes time I don’t get paid for.
Most people have hourly paying jobs. There’s a bunch of stuff one tends to take for granted about when one has an employer that becomes a harsh reality for those who choose to go the route of self employment.  Self employed people do not make an hourly wage.  When we price our items we have to consider not only what it cost to make it or how much time that particular piece took.  We have a whole host of other things we need to consider.  Things we don’t get a direct hourly wage for include (but are not necessarily limited to):
*  Research and development of new items.
*  Design time.
*  In my case: Disassembling watches and hard drives and sorting tiny parts.
*  Researching resources and shopping around for raw materials.
*  Researching, purchase, alteration, and maintenance of display materials.
*  Taking and editing pictures of stock.
*  Uploading pictures to an online store or website.
*  Updating and maintenance of a website (beyond just adding pictures).
*  Time spent promoting yourself and your work on social media sites.
*  Writing and editing Blog posts.
*  Measuring and finishing cord and chain for my pieces.
*  The free alterations and repairs that I do for my customers.
*  Pricing, tagging, and bagging finished items.
*  Creating and updating inventory sheets.
*  General accounting work.
*  Email list maintenance and updates.
*  Loading in/out of, setting up for, and time spent working shows.
*  Time spent traveling to and working with consignment shops.
*  Researching new sales opportunities.
*  Making contact with show coordinators.
*  Taking items to the post office to send to customers.
As a self employed person I am also responsible for:
*  My own insurance (medical, dental, vision).
*  Some shows / business require you to have business liability insurance.
*  Self Employment Taxes (Social Security, Medicare, etc)
*  Collection, tracking, payment of Sales Tax. **
*  Purchase of and renewal of business related licenses. ++
*  I need to pay rent, utility, electricity, groceries, internet, and phone bills like everyone else.  Sometimes I need new clothes and shoes as well.
*  Retirement plan.  That’s a long term goal right now…
**  Small business people in Washington state are required to collect sales tax and pay it back to local government.  The IRS specifies that the tax be added to the listed price of the item (not included in the price).  This is how it works in every store in WA state so I don’t understand why people expect it to be different at shows.  Bottom line:  If I’m ever audited they expect the sales tax to be added to the listed price, not included in it and I could end up owing back sales tax (and fines) if I don’t do it like they want it.  I like round numbers too but in WA, we have sales tax.  Also, each city sets it’s sales tax so I have to adjust it for where I sell and report my sales by city every year.
++ Depending on the city / state laws, I may be required to have either a temporary or permanent business license for the different cities in which I sell in at events.  Sometimes the sales tax has to be paid shortly after the show is over when doing out of state shows.
Then there are the various other costs for doing business that must be paid in advance, such as show fees.  Some folks do not realize that I have to pay for the privilege of selling my items at every event I’m at.  Quite often I’m paying quite a bit for that privilege.  I’m also usually paying for it months to a year in advance of the show to get the best price and ensure I will be there again next time. For most of the shows I do, I have to apply every year and getting in this year doesn’t guarantee I’ll get in next year.   A number of the shows charge “application fees” just to get the chance to be at that show.  Application fees are not refunded if one doesn’t get into the show.  Sometimes these fees come due at times when sales are low or I’ve had to pay out a lot of money in supplies to prepare for upcoming shows.  I also often have to pay for parking at these shows. Depending on where it’s at, parking can cost upwards of $20+ a day.  For this reason I sometimes take a bus in when an event runs several days where the parking is expensive.  This means getting up earlier for the show that day and getting home later.
My show set-up costs include things such as:
*  A variety of tables to accommodate the various places I vend at (some spaces are larger some small).
*  The hand trucks and carts I use for loading items in and out as well as bungie cords.
*   The four-drawer cart I store various items I need for shows and have my cash box on during shows.
*  The tall chair I bought so I can see over my taller display, actually get to sit at times, not startle customers by appearing suddenly from behind my display, and which has a side table that my tool case sits on for as needed alterations.
*  Table clothes and some seasonal/show based decorations.
*  The bags/boxes, tissue paper in which purchased items are given to customers.
*  The bags, trays, and boxes my items are stored in between shows and as back stock.
*  Storage tubs for display items and any packing material you need to keep them in good condition.
*  Tents with sidewalls and weights for outdoor shows.
* Getting custom display items made to help speed up my set-up / tear down time.
When you’re buying from an artisan that is self employed and making hand crafted items, the prices they set must take into consideration all the costs they have of doing business that they do not get paid an hourly wage for in addition to what it costs for the raw materials.  We do not get paid for any the work we do until our items are purchased.  I do as much as I can to keep my prices as reasonable as possible but I still have to keep these other things in mind as well as the cost of living in Seattle.  I have had occasion, in recent years, to consider moving to a more outlying area with lower living costs but there is a trade off in increased travel costs, shipping costs, and less available local resources if I do.
I hope you will consider buying from local, self employed artisans when you can.  When you do, I hope this article will help you understand why our prices are (necessarily) higher than the big box stores are able to offer.  On the other hand the items you purchase from me are one of a kind wearable art pieces.  Also, I offer on the spot alterations and free repair should there be a mishap.  It may cost a bit more in the short run but in the long run you’re helping your community thrive!