Running your own handmade craft business can be extremely rewarding. Not only do you get to create something you’re passionate about, but you also generate income from it.
That’s a win-win!
To continue growing your business, and ensure it is as much profitable as possible, it’s important to reduce costs where you can.
In this post, I’m sharing with you my 3 smart strategies for reducing costs so you can keep more of the money that you make!
Shop your Supplies
My first smart strategy is to take a look at the cost of your materials.
Are you buying in bulk? Are you shopping around online and getting the best price?
Take some time to do this because you can most likely find your materials for cheaper or get a discount for ordering more at one time.
Also, buying directly from the manufacturer will save you money. When you look at the product’s label, there will be a brand name. Look it up online and you can usually buy in bulk directly from them at wholesale prices. However, you may need to have an EIN and prove you have a real business.
If you don’t have that, you can check out https://www.dhgate.com/ and https://www.aliexpress.com/
You can also place an order along with some of your other craft friends and divide up the materials when they arrive if you cannot meet the minimum order value for an order from a wholesaler on your own.
Create Smarter, Not Harder
The next way to reduce costs of your business is to reduce your product labor cost. Once you have an established process for creating your product there are two ways to do this: by batching your craft and/or by bringing on someone to help you.
Batching is a great example of working smarter and not harder. Let’s say that it takes you 1 hour to make one product. If you have someone order 5 items from you then that is 5 hours of your time when you make them one by one.
Once you’ve mastered your step by step process, it’s faster and more efficient to do one step multiple times and then move to the next step. This will help save you time and allow you to create more inventory – bringing that 5 hours to make 5 products, perhaps down to 4 hours to make 5 products.
The other way to reduce costs is to hire someone to help you. Now, I know that sounds counterintuitive, but hear me out.
First, think about, “What is one hour of my time worth?” There is no wrong answer here.
And are you spending time working on your business or doing certain tasks to create your product that aligns with that hourly rate that you sent for yourself? Or do you ALSO spend a lot of your time doing $5 or $10 an hour tasks that someone else could easily be doing?
If you bring on someone for $10 an hour to do tasks that don’t have to be done by you, you’re actually saving money. You’re freeing up your time to work on tasks that only can be done by you.
An example of what you could pass off is, let’s say that a step in your creating process is dying yarn. You could easily have someone else dying 10 skein of yarn at a time.
Someone else could help you with packaging and shipping, posting on social media, and keeping track of inventory. These are things that don’t require your expertise and that you could pay someone less money to do for you than you would be “paying yourself” to do instead..
Save on Shipping
It seems that shipping (price and logistics) is one of the biggest roadblocks my students face.
Now, normally my tip here is to build the shipping price into your products so you can offer your customers free shipping, but that doesn’t technically reduce costs to you. So, I have a few different ideas for you here.
One way you can reduce costs is to offer local pickup. Since the price of shipping was already built into your pricing, you’ll be able to keep that extra revenue.
Also I don;t have to tell you to NEVER pay for retail shipping! You’re losing money needlessly if you are.
Many of the different ecommerce selling platforms will give you a deal on shipping. Shopify offers 15-60% off. And Etsy and Paypal also offer commercial shipping prices to their users.
If you don’t have your shop set up yet, or have PayPal, you can check out www.pirateship.com. There’s even some great sites that include commercial shipping rates for Canada Post too, like Shippo https://goshippo.com/!
Implementing these three strategies will help you reduce costs in your growing biz and make you more PROFIT.
Get my 20 Smart Strategies to grow your handmade craft business on VIDEO! Click here.