Chewing Paper - Confessions of a Paper Addict

Setting up a Handmade Greeting Card Business - Part 4 - The Big One. Pricing and Money Issues

Hi all,

Apologies for the delay in posting this - between Christmas rushes and holidays, it's been difficult to find the time to get all the information together and post it up!

Ok. Having covered products, packaging and lots more, we're now going to tackle the money side of things.  Mainly - how to price your products to see wholesale to shops or at retail prices to family and friends, tax issues and setting yourself up officially.  I'm going to approach it in a Q and A fashion, starting with tax!

TAX Questions

A common question from crafters setting up their own business to sell their crafts is:

Q: Do I need to register for VAT?  Do I need to charge VAT to my customers?

(A caveat for this answer - this is not intended as strict tax advice - please consult with a professional tax advisor for official recommendations!).

The answer is: Unless you have an annual turnover greater than €70,000, you do not need to register for VAT.  This means you do not need to charge your customers VAT, and you do not need to make quarterly VAT payments to the government.  Here's exactly what www.revenue.ie have to say about it:

In the case of supplies in the State and intra-Community acquisitions, registration (for VAT) is obligatory where certain turnover thresholds are exceeded or are likely to be exceeded in any twelve month period.

(e) €51,000 for persons supplying goods (increased to €70,000 as from 1st January 2007)

In the case where you are exceeding that threshold, you need to register either as a sole trader or limited company, and start collecting VAT for the government.  If you do register, it means a lot more paperwork, but also you can claim VAT back that was charged to you by any Irish suppliers, and also on other things such as postage costs. 

If you are not registered for VAT, you do not need to charge any customers or shops that you are selling your crafts to VAT.  Do not worry that they will think you are not "official" - it is never one company's responsiblity to look after the tax affairs of another, so shops simply don't mind or care what way you are set up as long as you're professional!

€€€€ Pricing Your Cards and Crafts

Q: How should I price my cards?  What kind of pricing do I need to sell direct to shops?

Pricing your cards and crafts is one of the most common questions we see cropping up on our crafter's forum. A recent poll on our forum of 25 crafters selling cards both to shops and family and friends direct revealed the following:

• The majority of standard sized cards (C6, DL and Square) are selling for a retail price of €4.00 on average.  This means they are selling in shops at this price, or are being sold directly to family and friends at this price.
• Retail prices vary across the country, tending to be lower in countryside areas, and higher in cities.  A card that retails for €5.00 may retail in the midlands for €3.50, for example. 
• Larger cards such as C5/A5 size, tend to sell for higher prices - more than €5 and often up to €7 and even €10 each.  Some people also charge more for square and DL, though most don't (and shouldn't really - the perceived value to the customer is the same).
• Packs of 3,4 and 5 cards tend to sell for lower prices, as do Christmas cards - when people are buying in bulk and less likely to pay a high price for each card. 

Wholesale pricing

Wholesale pricing for selling directly to shops can vary wildly.  Some shops will take a card and mark it up 20%, others 200%.  As a general rule, shops take a wholesale price and add 100% plus 21% VAT to it to get their selling price.  So a card you sell to the shop at €2.00, they will sell on for €4.84 (or more likely 4.95 or similar). 

A quick guide to pricing Wedding Invitations

As a very quick and rough guide, the absolute lowest you should be charging for a very simple, very small, very plain handmade day invitation we think would be about €2.50.  But, we would expect that a normal handmade day invitation would be more likely to cost in the region of €5.00.  Evening invitations tend to be about 60% of the cost, place cards less, mass booklets can be more as they require a lot of work to print.  We highly recommend that before deciding your prices for your stationery, you check out your nearest competitors to see what their pricing is like.  Make sure you don't undersell yourself - by far the most common problem.  Crafters rarely have lots of confidence in their work and are unlikely to overprice!!

Other General Tips

• Try not to underprice yourself!!!  Most of our crafters do and have no confidence in their work.  Does someone want to buy one of your cards?  That's because they're GOOD - not because they are doing you a favour.  It's a business transaction and you are providing them with a product SO much better than what they can get in the garage or shops.
• Research the shops you want to sell into.  See what they're charging now for cards so you can get a feel for acceptable pricing. 
• Ask friends and family what they think your cards are worth.  Believe them when they tell you.
• Always have a special offer to encourage people to buy more.  €4 for one card, 3 for €10. 

If you have more questions, please post them here!!  Or have a look at our forum for more posts about the topic. Above all have confidence in what you're doing.  Judge yourself by what people say about your cards and whether they want to buy them...and take it from there.  You're doing great already :)

Comprehensive List of Irish Craft Fairs and Markets

If you're interested in selling your Christmas Crafts or Cards this year the IrishBusinessWomen.com Forum has a fantastic extremely comprehensive thread on all the craft fairs, farmer's markets and other markets all around the country.  You can see it here.  It's the first time I've ever seen them all in one place.

While we're here, some tips on running your own stand at a Craft Fair or Farmer's Market:

• The average stand costs 30-40 Euros to hold for a day, though that may increase coming up to Christmas
• In theory public liability insurance is required in case something should happen to someone in the vicinity of your, but many don't take it out.
• In order to have a stand at a market during the busy Christmas season, some market managers will require you to have a stand for several weeks beforehand too - to avoid annoying other stall holders who are there year around, and also to ensure they have lots of stands at their market every week
• Most people spend an average of 25c on a Christmas Card, and are willing to spend more on those cards they send to their nearest and dearest only - so consider offering a range of cards "to My Husband/Wife/Mother" etc.
• If making Christmas Cards, ensure you include some with a religious slant (some people will only buy these), and ones with Irish writing are never a bad idea.
• Try and vary the kind of products on offer at your stand - for example - if selling Christmas Cards, have a range of Christmas Cards, and also some gift tags in packs of 10, notelets in packs of 5 to be given as gifts or frame some pretty cards into pictures.
• Try to have a clear special offer on your stand with a BIG sign advertising it.  E.g. Handmade Christmas Cards EUR 4.00 or 3 for EUR 10.00.  People love special offers and it immediately frames their way of thinking in terms of what they'll buy. 
• One of our forum members took a stand and offered a service to personalise cards - she took orders and posted the cards out later.

Things you'll need for your stand:  Check out the post on our forum about this too

• Table and chairs if not provided - some people have brought trellis' along in the past to display cards behind them too.
• Table Covering - sheet, table cloth, piece of material
• Display materials - something to display items at different heights is a good idea (a box under a table cloth or sheet will do just fine).  You could also try one of our great Card Stands - a steal at under 20 Euros!
• Packaging to protect your products - polybags for cards etc.
• A Cash Box or Bum Bag for change
• Paper or plastic bags - you can get these from www.vikingdirect.ie or local cash and carrys.
• A pen and paper
• Business Cards/Flyers/Posters - anything to let people know who you are.  Don't have any?  Try www.vistaprint.ie for business cards or www.print24.ie or www.flyer24.ie for flyers.  If you have a website, make sure to put it on there.
• If outdoors - two or three pairs of socks and double or triple layer everything else.  It gets colder than you can imagine.

How our crafters did at fairs!!  Here's another post on our forum on the topic for further reading and a field report from Kiki on her first market experience and some great ideas for additional products for your stand, or another great report from Patricia Mc :)  We started our life in the business at markets - and they're great for quick cash (at the right times) and getting great feedback on your card.  Dress warm though!!

If you've any tips to add - please add a comment!! We'd love to hear from you.

Setting up a Handmade Greeting Card Business - Part 3 - Product, Packaging, Presentation

Finally getting a chance to update the blog after an incredibly busy few weeks!  So...moving on with the series on setting up your own handmade greeting card business.

First to answer the comment on using verses on cards.  The answer is yes - you should be obtaining copyright to use them I'm afraid.  Unless the author has been gone from the world for either 50 or 70 years, then copyright law still applies for anyone copying works directly.

Where we're at: You've gotten to the point where you know you want to sell some cards - to friends, colleagues, shops or at markets.  The next steps are choosing your product set, making sure the cards are packaged professionally, and tackling the issue of presenting and displaying them in shops, or even at card parties or markets.

The first thing to put some thought into - is the product.  What ranges of cards are you going to provide?  What materials should you use?  Some points to take into consideration that we learnt from hard graft:

Materials

• Don't use inferior card stock or envelopes.  Make sure the card you're using is at least 240gsm or so, not floppy, and looks and feels expensive to the touch.  We find textured cardstock to often to be stiffer and looks more expensive as well.  There is nothing worse than taking a a lovely card out of its wrapper only for it to feel floppy, bendy and cheap in your hand.
• At the same time, try to keep all material costs down - buy in bulk where you can (here's our bulk buy section with discounts on our crafts site :)).  If you can't source locally or online, try a printers instead. 
• Cutting and scoring your own cardstock can be a false economy.  The highest cost in a handmade card by far is labour - it's the one thing you have to try to reduce as much as possible if you're to make a decent profit from your cards.  While cutting and scoring your card may save you a few pence per card, it will cost you more in time and effort and can also be wearing and take some of the fun out of making cards.
• Avoid designs that involve a lot of labour.  Use pre-cut die-cuts where possible - customers who don't make their own cards (who are all your customers - card makers don't buy cards they make them :)) do not know the difference between a shape you cut yourself and one that you purchased or cut from a die.  Avoid techniques like embossing, decoupage or quilling.  Keep designs as quick and easy to make as possible so you can make many cards in one sitting.

Design Ranges

Look at your designs you have with a business eye.  Pick out the ones that are the most popular with family, friends or existing customers (not your favourites, but those that sell best!), and see how you can make slight variations of these to make design ranges of cards. A design range is a set of 6, 8, 10 or 12 cards all of a similar design and theme.  Ranges of cards are good for several reasons:

• Designs of 6 or 12 cards display much better in shops than a set of 12 different cards
• If people like one card in a range a lot, they will often by 2 or 3 more to stock up and have at home
• Presenting a range of designs immediately creates an impression with shops that you are   a professional and know what you're doing.

With Cara Cards my most popular design based on family and friends feedback together with some feedback from taking a stall at a market, was the Pink Handbag Card (left).  On the basis of this I created a range called "Pink Birthdays" and extended the theme of handbags to dresses and shoes too.  You can see the entire range here.   At the time I didn't know that die-cuts existed, and wasted huge amounts of time hand-cutting various shapes for the cards.  Later I met with a printer and had a die-cut made for the pink handbag and then had a huge number of the shape custom-cut for me.  This card is still one of the most popular from the Cara Cards range (which has now been taken over by another card maker).

If your most popular card is one with flowers on the front, then look at ways to change the colours or layout of the flowers, add different embellishments but keep the whole theme of the design.

It's a good idea to keep each design range to an occasion e.g. Happy Birthday Girls Range, Happy Birthday Boy's Range, then an "other occasions" range such as Sympathy, Get Well Soon, Thank you etc.

You don't need a huge range of cards before approaching your first shop.  Start with 3 ranges of 6 cards each, and go from there.

Packaging

Packaging your cards professionally is extremely important.  All cards should be packaged in a clear polybag (or see here for bulk packs 100 bags).  These come in either non-sealed or with a sticky sealable flap. 

It's a good idea to brand both the card itself and the packaging - that way both the customer and the person receiving the card can see who made it.  We used a site called www.able-labels.co.uk to purchase clear rectangular labels with our name, address, email, phone and website on them to maximise the marketing potential of the card itself.  We used one on the back of the card and also one to seal the polybag.  Some people get stamps made up to use also.  Be sure they have contact details on them though - you never know who might see the card and like it.

Presentation

When we started out, the first question we were asked when approaching shops was "Can you give me a card stand?".  Particularly as we were approaching primarily gift shops, flower shops and non-card shops who didn't have a stand already.  Many shops will take your cards to start off with in a nice looking cardboard box that customers can flick through, but it doesn't maximise the display potential for your creations.  We found the only stands we could get were ones we imported from the UK for between £60 and £80 each!  It was a nightmare.  When we started the craft supplies site, one of the first things I wanted to do was find a card stand supplier who could sell us reasonably priced stands we could pass on to our customers.  The result is below:  a fantastic Cardboard Card Stand that's easy to make up and holds up to 100 cards.  It's a great way to start. 

Many card makers purchase these and then personalise them to further attract attention in the shops and also to help avoid the shop owners using them to display other people's products, which often happens. 

A good idea is to offer a free card stand to shop owners with an initial order value > EUR 100 or so.

That's it for today.  Comments so welcome as usual (it's nice to know someone's out there reading), and next in the series will be Pricing your cards and also touching on tax issues. 

Setting up a Greeting Card Business Part 2 - Selling Wholesale or Retail?

Ok guys, on to part two of a series of posts on setting up your own greeting card business.  In this post I'll cover - What mix is right for you?  Wholesale?  Retail?  Both? Is your goal to purely sell your cards to make some pin money, or to make a full time profession/business out of your paper crafting skills?

In future posts we'll cover designing card ranges, packaging your cards ready to sell. pricing, tax issues, potential places to sell your cards, and pitfalls!! 

Is selling your cards right for you?

Before setting up a handmade cards business, it's a good idea to think about the reality of what that business will be and what mix would be right for you.  There are two main options - to sell your cards at full, retail prices directly to family, friends and colleagues, or decide to expand the business further and look to selling cards at wholesale prices to shops.  If you want a part time income for your craft, or some pin money to supplement the amount of stash you've been buying, you probably want to just sell your cards to your nearest and dearest. 

Selling your cards at retail prices - local selling. If selling your cards at retail prices only is your goal, there's lots of places to consider for selling your cards.  Consider some ideas such as:

• Leaving a box of cards with prices on them in you or your partner's office or at your child's creche.  99 people out of 100 will pay for any cards they take, and you can just drop the box off in the canteen or reception area on a Monday, and collect on a Friday.
• Trying out some local farmer's markets to sell your cards.  The price for a table at a local market is usually around 40 euros for the day.  Try these markets particularly for specific occasions during the year such as Mother's Day, Father's Day, Valentine's day and even St. Patrick's Day.  At these times customers are looking for a special card and will be very willing to consider a handmade one.  Also it's worth trying out any local car boot sales - several of our forum members have had good success with these.
• Sending an email to friends and family to let them know you're selling is a good idea too.  If you have technical skills, try putting an album of photos of your cards up on the web - try www.photobucket.com, www.picturetrail.com/ or picasa.google.ie for free uploading and storing of your photos.
• Why not throw a card party where people come to your house for drinks/cakes and can purchase cards as well if they wish to.  If you're nervous, try teaming up with a friend who's a crafter and have both your wares for sale at the party. Everyone loves a chance to meet and chat, and the cards are a bonus for everyone.  My sister threw me a card party in London when I first started out, and it went really well - tons of cards sold and I got some great feedback as to what people were looking for.

Selling your cards Wholesale to shops.  Going to the next level to sell your cards directly to shops means selling larger quantities of cards, more regularly, and at lower prices.  It gives you a better chance of making a full-time living from your craft, and a fantastic buzz when you see your cards sitting in a shop being purchased by unknown customers!

Selling wholesale also means needing to be organised when it comes to collecting payment for your cards (Irish shops are notoriously difficult for paying bills), and being prepared to visit your shops on a regular basis to offer more stock or show new designs. 

When thinking of places to sell your cards wholesale, it's not all about card shops.  Walking into a card shop and seeing the type and finish of the cards in there, can be very off-putting and you may feel you can't compete.  When we had our cards business, the card shop chain was the last place we approached - after we had 30 other shops already buying from us.  Here's some examples of the kind of places you can sell your cards wholesale to:

• Gift Shops (to go with the gift - a good idea to promote birthday, wedding, anniversary cards etc. in these shops)
• Flower Shops (when people purchase flowers it's usually for an occasion and will often pick up a card as well)
• Baby/Children Shops (new baby cards and young age birthday cards - the majority of clothes for children are purchased as gifts!)
• Post Office
• Craft Shops - we had some great customers from craft shops in Christchurch and Greystones among others.
• Book Stores - try independent ones in particular. 
• Galleries - particulary ones with sculpture as well as paint/oils artists
• Interior Design Shops
• Stationery Shops - they often have racks of cards in shop

We sold cards into all these kinds of shops with our Cara Cards ranges - see HERE (there were about 10 more shops that never made it onto the site :)). 

Selling cards to shops also means repeating the same design many times - shops will wish to purchase the most popular cards in larger quantities, and it's likely you will at some stage get bored of making the cards!!  This, together with price limits, puts some crafters off selling their work to shops. It's all about balance though.  A good idea is to sell half your stock to family and friends now and then, for example, take custom jobs also from family and friends to keep your interest strong in your cards, and also have a few shops selling your cards on a regular basis.  Mix it up to avoid boredom while also achieving a regular income.  You can also consider giving some card making classes, making some wedding invitations a couple of times a year and essentially dabble in a number of areas and ways to make money from your craft.

Setting up a simple Website. If you are considering selling wholesale to shops as a full-time business, I would recommend getting a very simple website to promote your work.  Our www.caracards.com website allowed people to purchase directly on it, or contact us with wholesale inquiries.  We rarely got many direct sales through the site (though we did get some) but we did get a lot of wholesale inquiries from it (at least one a month when the site was actively in use) and many of our bigger orders from the USA and UK originated from this site.  Yahoo offer a very easy to use website building tool and a free website that's good if you just want a simple brochure-style site to display your cards.  Another good one is www.freewebs.com which gives you a free site and also supports integration with Paypal so people can place orders on your site also. Both of these will give you free sites that have some banner advertising on them as well.  If you want your own site with no advertising and your own domain name, you will need to pay to register a domain, host the site and then build it.  You need to pick and purchase a domain name, purchase a hosting package (please note links are to just one host provider of many), and then design and upload your site.  Some host providers give you a tool for creating sites also. If you're interested in more information on how to set up a website - try the message board on www.irishbusinesswomen.com where there's been lots of discussion on the topic in the past.

A quick side note while we're here about confidence.  We have hundreds of crafters posting their work up on our crafter's forum, but none of them think it is as fantastic as it actually is.  If fear and confidence are the biggest things standing in your way, make sure to listen objectively to what other people say about your work - and take it on board.  If people are willing to pay for your work - be they friends, family or strangers - it means it's worth buying.  Take heed of that and take it on board!!  If you find it difficult to get shops to take your cards at first - consider giving them the cards on a sale or return basis.  Take stock of what you leave, and come back in a month to see what's sold and give them a bill for them.  If it goes well, convert away from sale or return after a month or two to have the shop purchase upfront instead.

If you have more questions on Selling your cards - please add a comment here, or visit the Selling Your Cards Discussion Forum on our crafter's forum!

Setting up a Greeting Card Business - Part 1

I've been wanting to write a post on how to set up a greeting card business for some time now, but it would end up being the world's biggest post, so I'm going to split it into parts.  For our first part, a little background on Cara Craft Supplies/DIYWedding/WeddingDIY; how we started as a handmade greeting card company, and came to be where we are now.  The next parts will cover all the different aspects of setting up your own small business to sell handmade greeting cards. 

Cara Craft Supplies/DIYWedding/WeddingDIY - a little history

When I first started out in the crafts business, it was the end of 2003 and I was on a break from software and looking for other ways to earn a living.  My sister suggested to me that I'd always been great at making my own Christmas cards and wrappings, and why not make something of it?  I decided to have a play with it and see what happened, but I never thought it would actually become a business!  I designed several small ranges of cards at very reasonable prices, set up a small, free website to display them (I know - very basic, but it was clear, and it worked, and it was years ago :)), and emailed friends and family to see if they were interested in ordering.  By the end of the season, I had sold nearly 2,000 cards.  I thought there might be something in this greeting card business after all :)

I then set up a company with my aunt Barbara, to design and sell handmade greeting cards into shops.  We registered as a company, called it Cara Cards, and set to work in Barbara's attic, designing a range of cards to sell into shops. As I had a background in software, I set up a simple website for the cards - you can see it at www.caracards.com.  The image quality leaves a lot to be desired - we've come a long way since then!!  A good (and not too expensive) scanner will take the best images of all of your cards.

Our first range was our Indian Cotton Flowers range (left) - very simple bunches of  miniature flowers, tied in raffia or stuck directly onto deckle edge Indian Cotton paper.  It remained our most popular card throughout, the bunches of roses cards particularly popular for weddings. We also had variations on the theme - cards with flowers raining down down into a puddle at the bottom (right), and other flowers like sunflowers and daisies.  We sold the cards for about 1.50 Eure wholesale, and just over 3 Euros retail, though we probably could have gotten a little more for the retail price.

The next ranges we brought out were Baby ranges and some cute Animal Cards (left) with themes like a Frog saying "Hoppy Birthday", or a dog saying "Feeling Wuff".  The price point was the same as the Indian Cotton range, but profits were higher as the cost of materials (using plain card) was much lower. Simplicity was the name of the game - all cards had to be easy and quick to make wherever possible. We were regularly asked for Card Stands which we found impossible to source in Ireland at good prices. 

Market Testing.  Around this time we started approaching shops for the first time with our ranges of cards.  We had 6-12 cards in each range, all standard sizes (C6) and a price list drawn up for would-be customers.  Barbara headed off in her car to local gift shops, baby shops, florists, even post offices to see would they be interested in taking our cards. Many were, and so we continued on.  We tried out some markets for selling our cards, and found they worked great at times of the year when there were special occasions such as Mother's Day or Valentine's Day.  They were hard work, and we were freezing, but we got great feedback from the public on which cards worked, which didn't, and what people were looking for.

The next two ranges we brought out were called Pink Birthdays (left), and then a Christmas Range (right).  We always made sure to have at least 6 cards in a range so they would display well in shops and also encourage people to buy more than one card if they liked the design.  We used the Pink Birthday pink handbag card in some mail promotions we did, and got a die made up for us by a local printer to cut out the handbag with. The Christmas range was personalised for my Groovy Grandad, Darling Daughter etc. as most people only buy expensive Christmas cards for their nearest and dearest.  On average about 17p/25c is spent per Christmas card each year.  I also at this point had discovered pre-cut die-cuts (yes it took me this long!!) and was importing them from abroad to use on cards, saving a huge amount of time and money.  Both ranges did well, and after about 6 months we were selling to over 30 shops, and the card shop chain SWALK had just taken the Pink Birthdays Range on in the city centre shop.

By this point we were making hundreds of cards each week - selling mostly at wholesale prices, and with a lot of hard labour to make the cards.  It was tiring, and I was starting to wonder would it work as a larger volume business.  At the same time, I realised that as a small limited company, we were importing all our stock from abroad (apart from a few items we could get locally) and paying high shipping costs to ship small volumes in, with long delivery times.  I was very frustrated that I couldn't source these things locally and it occurred to me - why  not set up a craft supplies site of our own?  I had the computer skills from my previous career, we had a set of stock already in place, and a registered company which enabled us to purchase wholesale.

Thus www.craftsupplies.ie - Cara Craft Supplies (Cara is my middle name, was alliterative, Irish and is also my gorgeous niece's name) was born.  As it happens, it was born the same month that my son was born - one was early, one was late, and 5 weeks later we were at the Knit and Stitch show in the RDS with a tiny booth.  The response was phenomenal - crafters were so happy to see an Irish craft shop at the show, and one that was online!

About 6 months after that, the craft supplies site was growing and growing and we could no longer sustain the cards business, and so sold it off to a local crafter who took the supplies and existing clients.  A year after launching the craft site I came up with the idea for setting up a Wedding Stationery site which made it really easy for couples to make their own professional looking stationery, and save a huge amount of money in the process.  Thus www.diywedding.ie was born, and a year after that, we launched into the UK with www.weddingdiy.co.uk. 

I still believe that selling cards you have made for a living can work well - with a few caveats we'll cover in the next few blog posts on the topic.

1. Consider whether you want to sell your cards at retail prices - to friends and family/colleagues, or at wholesale prices to shops.  The former has the advantage of giving you a much better markup on your cards, but the disadvantage of being unlikely to grow into a formal full time business.  Selling wholesale is a smaller markup - though this can be gotten around through clever use of supplies and easy to make card designs, and the advantage of greater potential to grow into a larger business.

2. Think about maybe making a living out of your craft by both selling your cards or scrapbook layouts, but also giving some classes, making some wedding invitations etc.  Mix it up and it won't get monotonous or boring!

I'll leave it at that for now - lots more to follow.  Please do add your comments and tell me what questions you would like answered on "How to set up your own Handmade Greeting Card Business!".