Spreading Out

My last post was a difficult one to write. It is not fun to share bad news. Yet, to omit it from what I am writing might create a false impression of what is going on in the world of craft today. It is not pretty. Very talented people are struggling, or at least feeling the pinch.

But it is not all bleak either.

One of the things I have learned in this business is the importance of having a balance. What kind of balance? A balance of price points, a balance of outlets for my work, and a balanced mix of products. Products tend to vary in how profitable they are, and their stage in development. Boston Consulting Group developed a matrix, many years ago, that placed products in various quadrants based on the product's growth or market share, and profitability, as a way to assess a company's portfolio of products.

A fast growing product, or one that has a good market share, and is very profitable is a Star. As much as companies want to have all stars in their portfolio of products, it is not likely. Stars may start out as Question Marks. Products that may have a good growth, but are not yet very profitable. At this stage, it is unclear if they will become Stars, or Dogs. Dogs are products that have a low market share or growth, and are unprofitable. Dogs need to either be rehabilitated, or dropped from the mix. Finally, there are Cash Cows. These are products that may not have the growth they once enjoyed but they are profitable. They generate cash to help fund the future Star products of the business. They do not need much investment beyond production, and occasional tweaking of design to generate cash for the business.

Thinking about where your products lie on this spectrum is a good way to start to think about what changes you might want to make in your product portfolio. Are there products that need to be shed? Are there products that need some more nurturing to be made more profitable? What are your Cash Cows and your Stars? What threats might exist to these products in the market? These threats can come from competition, new technology that can make a product obsolete, or from changes in the economy.

You may think new technology could not effect our businesses as artists/craftspeople. Well, what if you make cell phone or iPod cases or covers? Talk about a moving target! Yet, there has been good demand for these types of products. Being in a market such as this can be a wild ride, but a highly profitable one if you are quick to respond to the changes, and have a means to get your product to market very quickly.

A balance of price points is important as well. Low priced impulse items are important when the economy is soft. They could be great gift items, or personal indulgences. When the economy pulls back, these types of products can maintain their strength. A mid-point product is probably the backbone of most businesses. Although, I believe the midpoint is struggling the most right now in the craft market. Just as the middle class is being squeezed, the mid range of price points are selling more slowly. Some, such as Bruce Baker, have talked about the strength of the very high end of the market, as we have had an increased concentration in wealth at the upper levels. Do you have a product to offer this group?

Your focus might be on one price range, or on your Cash Cow. But having a diversified portfolio of products will give you more flexibility to withstand the economic strains of a tight market. It will allow you to adapt to serve the strongest part of the market. If you are selling all high end work, and the economy tanks, your business may have the legs cut out from under it. Strictly selling low priced impulse items might mean you are forever chasing the next trend, and looking over your shoulder to see who is trying to copy your success.

Finally, it is important to keep your eyes looking beyond the moment. What is your long range goal? Where are you heading? Are you still on the right path, in spite of some bumps in the road? If not, what adjustments do you need to make to get yourself back on track?

A bad show is just that. A bad show. Nothing more. Nothing less. Even in the worst of shows, something is learned, and connections are made. Having a broad base in your business means you are stronger to survive the economic swings. As much as I was disappointed in my sales at the show this past weekend, it is not a crisis. I have wholesale orders to fill, and interest from a catalog in carrying the cranes. In spite of the slow retail business, I have still grown my business over last year's sales. I am in this for the long term.

An investment advisor would tell you not to invest all in one stock or company. You should diversify your portfolio of investments. Your investment in your business should also be diversified. A range of products. A range of markets for your products. When the going gets tough, and it is looking tough these days, it is easier to withstand the shocks if you have a broader base.

Happy Halloween, and it is back to making cranes, for me!

Reading Tea Leaves

I don't know if it is reading tea leaves really, or being hit over the head with a mallet! But my current approach to retail shows is not working. Looking at the numbers, the average cost per show has increased, and the average sales per show has decreased. I am approaching a dangerous intersection.

I am not sure exactly where the problem lies, or if perhaps it comes from many places, but I know I need to rethink my approach. The show this weekend in Providence was a beautiful one. The work that was on display was a visual feast. There is so much amazing talent out there. And yet, many artists at the show struggled to cover their show expenses. Lately, I feel like I am making more of an investment in the business of the show promoters, and the collections of the craft buyers, than I am in my own business.


Is the overall craft market in need of a new model? Look at the radical transformation that has occurred in the music industry in the last decade. Does the world of craft need such a reformation? Will craft shows be replaced by Etsy and the Guild.com? There are fewer and fewer shows that have the following, and buyers, to sustain the $1000 or more booth fees that some of the "better" shows are charging. Perhaps two day shows, rather than three? Perhaps more affordable venues? I am not sure. I do know that I am not alone in my struggles in the retail craft world.

In the meantime, I know I need to reform my approach at a show. I have to rethink my merchandising strategies. My knowledge in retail merchandising and display is very limited and needs some rethinking. This is my Achille's heel.


I had the input of a good friend, Sandra McCaw, this weekend about problems with my display. She helped me start to see some of the pitfalls of my current set-up. Buyers need to be able to assess things quickly and easily, or they are on to the next booth. I had grouped things by color. I thought that people would be drawn to certain colors and could gravitate to that area of the display and focus in on that. The order I thought I had created felt chaotic to others. Different styles of jewelry here and there. When I rearranged the work by style, rather than by color, I saw the difference. Light bulb moment.

One of the things that you learn with interior design, and I had also been told was true with booth displays, was to have things at different heights. It helps the eye travel. But, when you have a pedestal and case display for jewelry, things are displayed more or less on the same level. The variations in height are more subtle. But, it works. Perhaps the process of shopping for jewelry is one that needs a more quiet and studied reflection. The levels might work better for larger objects. I am going to be going away from my current booth set-up, and look into cases with pedestals, or hanging my work on the wall in framed shadow box type displays. Cleaner and more elegant. Likewise, Elise Winters made the suggestion to rethink the background for my work, moving from black, to a white background.


The craft market is soft. There is no room for anything less than being spot on in this business, right now. I have not hit the mark. I am rethinking everything right now. Will I continue with retail? Where and how? Will I continue to make and sell my vessels? And of course, where am I going with those displays??



I had scaled back on retail shows this past year. I will cut back further still this coming year. My wholesale business has more than doubled this year, and is looking better all the time. I will spend more time nurturing the development of that part of the business. Right now, the retail side of my business is on life support. Changes are in order. Stay tuned......

Check This Out

Have you been over to Alison Lee's blog lately, and listened to her podcast interview with Wendy Rosen. Wendy shares a lot of her insights and knowledge about the business of craft. She also gives her top ten list of mistakes that artists make as business people. Definitely worth a listen.



And have you seen this page on Lindly Haunani's blog/website? It is under the Visual Journal button on the top menu. I love playing with collage, and these are terrific. I am a real fan of her blog. Short posts. Well written. Great tips, and insights. Definitely a regular visit for me.



If you like collage, you must check out this work. The artist is Noli Novak. She apparently specializes stipple illustrations....pictures made of many small dots. They are nearly photographic in their accuracy. But the collages are what really entranced me. You must click on the images, and see in more detail to fully appreciate what she is doing. It could be interesting to try something like this with polymer clay...

Mentors

Tonight I went into Boston to a reception being held for the alumni of my business school, Weatherhead School of Management, at Case Western Reserve University. That is a mouthful, isn't it? I graduated from there more than twenty years ago...yikes!!...with an MBA. My concentration was in marketing and finance. As it turned out, all my marketing classes were with one professor, Mohan Reddy. At the time he was not quite a professor yet, but he was one of those fantastic teachers that you never forget. Mohan recently became the Dean of the Weatherhead School. Thus the trip to Boston. I am setting up for a show in Providence tomorrow, and should have been home getting ready, but I had to take advantage of this opportunity to visit with Mohan.

I have not seen Mohan in more than fifteen years. But, what I learned from him, in school, and in contacts after I left school, has stayed with me. When I face a challenging business situation, it is not unusual for me to think about Mohan, and try and draw on some of the wisdom he imparted.

As I drove home tonight, I thought about how there are people in our lives, who have a profound impact on the way we view the world. What we learn from them, stays with us, beyond the time we are actually in contact with them. We carry that wisdom they have shared with us for the rest of our lives. A little voice in our head that can be a guidepost when we are stuck. They can be teachers, friends, co-workers, therapists, a parent.... Some come with baggage. But the exceptional ones are the ones that change us. They open up a door for us. They challenge us to go further than we might have thought we were able. Giving us a push when we need it. Celebrating our successes. Giving us encouragement to continue moving forward.

Off the top of my head, I can say I have had three people in my life who have played that role....one of them was Mohan. It is because of what I have learned from Mohan, and others, that I felt compelled to begin this blog, and begin to share some of what I have learned, and what I am continuing to learn. I hope you have had an inspirational teacher in your life, like Mohan. Someone that you would rearrange your schedule around in an instant, if you had a chance to meet up with them for a few hours. Everyone deserves at least one such person in their life.

True to form, he presented me with a few challenges tonight. The real challenge, finding a few more hours in the day to take those on, or at least begin to think about them. Weatherhead School is lucky to have Mohan as their Dean. And I am lucky to have had Mohan as a teacher. Thanks Mohan. And the other stuff will have to wait another six weeks or so.... Right now, I have some cranes to make!