Last Blog Post. Really. I think...

Thank you to those of you who have reached out in the last year or so seeking advice on opening your own fabric shop! I wish I could help each and every one of you, but sadly, I cannot. I hope my old blog posts help you sort through some of the decision making process.

I am no longer checking my beesquarefabrics email address, apologies to those who have reached out and I didn't get back to.

Below are some snippets of advice I had previously emailed to varying inquirers looking for advice on opening running an online fabric shop. Enjoy!

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If you have all your business papers in order, look into American Quilt Retailer magazine, and the book they put out called The Answer Book by Jim Salinas. He has a formula for what you should be making per square foot of shop space.

There is a reason that Sew Mama Sew and Purl Patchwork sell their fabrics for what they do - they know that to actually pay people, you need to charge the full markup - which is wholesale cost + what it cost to ship to you x 2.

I don't think you need the best looking website, you just need one that shows up in Google searches.

The only thing I can say about what your offerings are is this - it takes the same amount of time to fill 1 yard as .25 yard. Once in a while I would get an order with 25 different prints all at .25 yard cuts. It would take me an hour to fill - and half of those cuts would be on sale. I just didn't have the capacity to fill those kinds of

orders for such little money. Fat quarters are great, but they take time to cut and fold and bundle up and photograph.

I don't mean to discourage you at all, but I just want to be honest about what it is really like. You have to market yourself all the

time, and when you're not doing that you are filling orders which is physically and mentally exhausting. And when you're done with that there is the bookkeeping, and getting ready for new orders, then getting that new product on your website.... It is a job that never ends.

I think the biggest difference between a fabric shop and a yarn shop is the additional labor. It's one thing to take an item off the shelf and pack it up and another thing to take the item off the shelf, measure, cut, fold, package, put the remainder back on the shelf. It is joyful labor, but still much more physical work. I was also astonished at how much I needed to spend each month on advertising because once you have a fabric for more than 4 months (assuming it is a 'trendy' or designer fabric) it's already old.

Guerrilla Marketing

On April 15th I had to file my last tax return for Bee Square Fabrics. I was pretty shocked at how much money I spent on advertising in 2009. I have also been cleaning out my email inbox and found this bit of advice I sent to someone explaining what my process of guerrilla marketing was.

Enjoy!

Guerrilla Marketing is getting your name out there in a free and active way. It is making a name for yourself without paying money for it. Unfortunately, like all things free, it isn't really free, it is your time you will be paying in.

So it means you need a blog. You found me through mine right? See, it works. :) It's free, it's a place to post specials and deals and giveaways - and trust me, giveaways work! And then it gets your name in the Google arena. The more people who visit your blog and add your blog to their blogs, the higher up in the Google ranking you get.

You need to Twitter. You may already be blogging and tweeting and if you are, then you should have links on your website. (You need a website). The more places that link to you online, the more Google likes you.

You need to search out every quilting related group, message board, list... and get yourself in their directory. Like the Sewingmama's forum, and quiltinggallery.com and you need to make profiles everywhere. It's a total pain, but it works.

Then you go to wists.com and you list your own stuff there.

Then you go and find quilters out there who aren't yet working for anyone else, and who also have blogs and ask if you give them fabric to make something, will they write up a tutorial for your blog which they can also post on their blog.

Then you host a competition of some sort with some sort of prizes. And people will participate! And they'll ask their friends to go to your blog and vote for them, which will bring you more traffic.

But you'll need a Flickr account to host the images, which you'll learn will bring you some traffic as well if you up load images of your fabric there. (But be sure to read the terms of Flickr because they shut you down if you try to mention your shop there).

And if you sell, say, Jennifer Paganelli's stuff and she has a blog, ask her to link to your shop. A listing on a designer's blog could be your number 1 traffic driver. Designers want their fabric sold so they are asked to design more fabric. They will help.

And while you're doing all this, listen to the Indie Biz Chicks podcast (download to your computer on iTunes) she has so much great advice to give. http://indiebizchicks.com/wp/

Oh and then set up a Facebook fan page or group. Facebook is getting bigger and bigger and it quickly targets an audience.

I found I spent 60% of my time filling orders and 40% of my time marketing myself.

Sell on Blogger???

I just discovered this from Google Labs. You can create an online store on your blog. Who knew? All you need to do is sign up for Google Checkout, add your products to a Google spreadsheet and create your widget.

Pretty neat! Check it out...
https://storegadgetwizard.appspot.com/storegadgetwizard/index.html

Visual Design

I am sad to say that I am winding down my blogging (if you haven't already noticed). I am picking up in my old career of Information Architect which, thankfully, has a bit of work available.

In the meantime, I wanted to share some early design ideas for Bee Square Fabrics. These were all homepage options, and as you can see the colors, graphics and overall design go a long way in developing a brand.

Enjoy!

Option 1


Option 2


Option 3


The Keeper


Bigger better images can be found on Flickr.

Your Own Web Shop - Part 2

For me, the 2 biggest issues to consider when building your eCommerce website are Search Engine Optimization (SEO) and Usability. These things are really quite dependent on each other. To build your customer base you need to easily found, but to keep those customers you have to have a site that is easy to use. I always harped on the importance of Web Usability, but having never worked in online retail before, I didn't realize how important SEO was to the success of a site.

SEO:
Unfortunately I'm not an expert on SEO, so I can't advise on how to improve your existing shop. But I can say that if you're starting from scratch, it's important to interview your hires about their SEO experience. It will only benefit you to make a good hire in this department, even if it costs a little more. What you'll save in monthly advertising expenses will be worth a little more money spent up front. Trust me on this one. I spent months trying to get my fabric found in Google searches, and no matter what I did, it all came back to issues with the coding of the site.

Usability:
I'm a big fan of usability. There is a fantastic book called "Don't Make Me Think" which basically explains how visitors to your website will spend more time on there if they don't have to think about how to use it. For example, if your customer has to think about how to add something to their shopping cart, they might not make that purchase. If your customer can't find a coordinating print to the one they fell in love with, they may not purchase either. You may have the most visually beautiful website out there, but if it isn't easy to use, you may not make the sales you are looking for.

When designing my shop, I kept going back to all the things I like about other sites I've shopped on, and thought about how I shop for fabric in brick and mortar stores. I love the color wall in quilt shops, so I wanted to make sure that you could sort the fabric by color on my shop. When shopping online it always frustrated me how many clicks it took to add a bunch of fabric to my cart, which resulted in my Quick Shop. It was important to me that you didn't have to go back to your shopping cart every time you added a new fabric - especially with the Quick Shop - so I designed an overlay that opened up to display the cart and then automatically closed.

From the feedback I have received, I think I had a pretty usable website. I never had complaint about how to find something, even though I didn't have a search function, and the only issues that ever came up were because of a glitch with PayPal. My checkout process needed work, but overall in the usability department, I think I was a success.

When designing a shop from scratch, it is important to ask how you think your customers will expect to shop on your site. Don't make assumptions such as 'they'll find it' or 'they'll figure it out' because they won't, or more importantly, they won't want to. There are other shops out there that may be easier to use. Make sure that if you get that customer to your shop, you keep them there and encourage them, through usability, to make their purchase with you.

I have been busy working on a few projects outside of the selling fabric world. One of these is a usability project that I'd love your feedback on. But before I post about it publicly, I want to get permission from the sites owners. Get ready to do some clicking around and note taking. I'm hoping this exercise will gel the importance of having a usable site.

Your Own Web Shop - Part 1

How do you know if it is time to move on from a venue-type online storefront? If you answer yes to any of these, it may very well be time.

- Have you started paying hundreds of dollars in advertising each month to generate the amount of sales you need to stay viable?

- Do you want some flexibility in the look and layout of your online shop?

- Are you already marketing yourself daily to the point where you feel like you are driving most of your sales yourself?

- Are you comfortable enough with HTML to make small edits yourself, or do you have someone who can make small changes on the site for you.

If you answered yes to any of these, it may very well be time.

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Once you've made the decision to go out on your own, you have several options of how to get a shop up and running. They range from the basic and affordable to the extremely expensive. Every additional feature you want on your site is going to cost you, so keep that in mind when shopping around.

Step number 1. Register your own domain name. If you haven't already done this, take a break and go do it now. Go Daddy or Register.com are places I've used. It doesn't cost a lot, and it keeps you the owner and in control of your URL.

Step number 2. Decide what ecommerce solution is right for you.

This post will briefly discuss the "all in one" ecommerce solution. It is based on templates, fully functional without much work at all and often will cost a monthly fee.

Yahoo! shops is one example of this type. They have a one time set up fee (in Yahoo!'s case $50.00) plus a flat monthly fee ($39.95) plus a transaction fee (1.5%). So if you're making sales of about $5000/month - your fees to Yahoo! are about $114.00/ month. *** Those are fees to your host/provider only. You will also be paying a monthly merchant account fee.

An advantage to this type of set up, it's quick, it's easy and it really doesn't cost much. If it is a tried and true package, it may have good SEO (Search Engine Optimization) which will help reduce your advertising expenses in the long run. It is an important question to ask before committing to a provider.

Another "all in one" solution is Volusion. Their pricing is based on the number of products you sell. An important thing to consider if you're a fabric shop. You may start out with 400 bolts, but when some of them don't sell and you buy more you'll find you're quickly at 600 then 1000 in the blink of an eye.

There are many more of these types of solutions out there - feel free to name your favorite in the comments. The two I've named are the ones I'm most familiar with. When looking into these kinds of solutions, it is best to figure out your own needs first. For example, if you want to sell fabric by the quarter yard, can they accommodate that? What is their administration panel like - is it easy enough to add products? Do they have gift card options? Newsletters? Is the shopping cart/ checkout easy to use? You get the picture. Make a wish list and start doing some research!


Next up: Your Own Web Shop - Part 2

Benefits of Your Own Online Shop

I have a lot to say on this topic, but very little time this week. I'll save the recommendations part for next week.

Pros:
- You are in control of the site design, web functions, branding, messaging etc.
- Setting up your own shop allows for flexibility. (Do you plan to expand your offerings? Want to highlight a sale? Arrange items next too each other that coordinate?)
- If you are selling full time, your merchant fees may be less than selling on a venue.
- You can sell more than one thing at a time without having to go back and forth with your customer multiple times.
- Your customer has the ability to shop how they are used to shopping online. For example, you will have an integrated checkout system.
- All advertising dollars direct customers to your shop, not a place where they can find the same item in someone else's shop.
- You can offer gift cards/ gift certificates that integrate with your shopping cart.
- You can create a community aspect to your shop.
- You can include newsletter sign ups directly on your site.
- Your average transaction price will be higher.


Cons:
- You need to market yourself and drive traffic to your shop.
- There is no built in customer base.
- You will need some capital up front to get your shop up and running.
- You may need to hire a developer to make changes to your shop.
- There is no community aspect, unless you create one yourself.

If selling fabric is your full time job, I personally think the pros outweigh the cons. When I left Etsy I felt freer. I no longer spent my days trying to drum up business in my Etsy shop, stalking the shop hoping for one more view to be posted, and chatting in the forums. I spent my time developing my brand, nurturing my customer base, and more importantly, filling bigger orders.

I guess the question you need to ask yourself is this - If you are selling on a 'venue' site, are you happy there? Is is working for you? If not, it's time to start looking for other solutions.

Next up: Recommendations and options for starting your own online shop.


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For all of you who have asked recently, the reason I closed my fabric shop is not because I wasn't doing well - I was doing just fine. I was going to expand to make the business even more viable. But instead of doing that, I decided to liquidate my inventory to help purchase a new home. I plan to go back to working as a web consultant to help pay the bills on the new loft. I am not sad about this decision - I was for a while - but now I am looking forward to fixing up and moving into our new place.

If you'd like a new wonderful online fabric shop to buy fabric with, please visit my sponsors. :)

Etsy Tips and Tricks

I've been thinking about this for the last few hours, and it turns out - I have none! Etsy has changed a lot since I was selling there full time, and I'm not sure how to best be viewed on Etsy anymore.

This is what I've managed to come up with:

1. Don't pay attention to what your competition is doing. You can't control them, so there is no need to waste your energy thinking about it.
2. Don't stalk your Etsy shop. The views there are meaningless. Don't spend your day refreshing your browser hoping that one more person has viewed your item.
3. Don't put all your eggs in Etsy's basket. Try other venues as well. Etsy Bitch has profiles on all of Etsy's competition. You never know - your style might work better elsewhere. Your items might be found more easily on another venue. You might end up selling more outside of Etsy. You'll never know until you try.

Why do I say this? Because once I opened up my own online shop, I stopped spending my whole day waiting for sales to pop up and started using my time to market myself and enjoy the life I set up for myself. There are so many free ways to get your name out there. It takes some work but is well worth it. I mean, you're here reading this right? Shows that I've done something right! :)


If you do sell on Etsy, I will refer you to the following resources:

The Ultimate Newbie Guide

Secrets of Savvy Etsy Sellers

Etsy Hacks. The number one thing you can do to improve your time management of selling on Etsy. If you haven't downloaded all of these hacks, spend your next hour doing so. You'll thank me. Really you will.

Selling on Etsy

First and foremost, let me start by saying that Etsy is a great thing. A really, really great thing. If someone from Etsy called me up tomorrow and said, 'Hey Diane, we have an opening for an Information Architect. We want to improve the customer experience and usability on our website. Please come work for us.' I totally would. I'd brag that I am an award winning IA and I have many ideas of how they can improve the shopping and selling experience there and how I'd be honored to be a part of their team. One can dream, can't they?

Now that I've stated that, let me go back to telling my story. After spending my entire budget at quilt market, I arrived home full of energy with plans of building my website. I had black and white 'wireframe' drawings that I designed and was ready to hire a visual designer to make the site look as good as I planned for it to function. I had a friend lined up to code the site, and was looking to hire someone to implement the shopping cart.

I thought I'd have a month or so to get this all up and running, but a week or two later boxes and boxes of fabric started showing up. Thankfully I had my shelves ready to store everything, packing materials on hand and PayPal all set up. With the clock ticking (Jim Salina's words ringing in my head about the sizzle stage of the fabric) I knew I had to start selling now!

Thank you Etsy! I was selling baby quilts there already, so I was already very familiar with the site. I knew the lingo, the little tricks of getting noticed, the advantages to posting on the forums and the advantages of making and getting in a treasury. I cut some fat quarters, took some pictures and started selling. Things were good for a while. They were actually really good. Really, really quite good. I was selling fabric at about $9.60/ yard and people were buying.

Things were going so well that I abandoned my plan to have my own website. I was paying Etsy quite a lot of money in fees and I was ready to hire someone to help me pack and ship.

And then Etsy changed the way its search function worked. My business totally fell flat. I survived on repeat customers for about a month, and then, getting desperate, I started renewing my items for the first time ever (¢20 down the drain per renewal). When that didn't help, I started paying for advertising to try and rebuild my business. At this point I realized that Etsy was no longer for me. With crafting supplies out of Etsy's main search and the discounters opening shops like mad I knew it was time to go out on my own.

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Here is what I learned about the financial side of selling fabric on Etsy. I can write about 'tips and tricks' for selling on Etsy in a later post, if you'd like. For now I am going to focus on the money side of it.

For some crazy reason the average price per yard sold on Etsy is well below a profitable price. Below is an example. Figures are approximate, but realistic. I apologize in advance to anyone in the industry who feels I am giving away too much information.

Let's say that wholesale price per yard is about $4.50/ yard (this price varies by manufacturer). Add in your landed cost (what you paid for the manufacturer to send it to you) and you get about $4.55/ yard. Add in Etsy fees (3.5% + .20) which makes it about $4.91/ yard. And then add in PayPal fees (2.9% + .30) and it brings your base price to about $5.34/ yard. (In realty the fees will be higher because they are based on retail mark up, not on wholesale price which I have used here.)

Since Etsy is so competitive, and supplies do not show up in the main search, chances are likely you will need to advertise. I understand that Etsy finally implemented Advanced Search so it may be easier to sell supplies there again, I can't say. Because I see Etsy shops advertising in the same places as non-Etsy shops, I will assume this is not the case.

Take your $5.34 and add in advertising. Let's just say you spend a mere 5% of your price per yard on ads. That now brings your base price to: $5.61/ yard.

If you sell everything at 'Etsy competitive' prices, without putting your fabric on sale and without renewing any listings, you are making about $2.00/ yard in profit. You need to reinvest half of that (or more) to purchase more inventory so that leaves you with about $1.00/ yard as your take home. However, it is inevitable that you will end up marking down at least some of your inventory so expect less than that.

Of course, this math assumes you have no help. And that you don't pay for insurance (health or otherwise). And you don't pay for storage/warehouse space. And you are including the cost of your shipping materials (printer ink, labels, plastic wrap...) in your shipping charges. Oh wait, this isn't the case? Your profit just plummeted to pennies.

And that is exactly why the 'big' shops sell their fabric at $9.00 - $10.00/ yard. Because they have to if they want to be viable businesses.

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I think Etsy would be a great place to sell fabric if they made a few changes. I think it would be better if they didn't display prices in the search results. It would help if it were easier to gain access to supply-buying customers by allowing supplies its own portal/ homepage, or were even featured more on Etsy. Most of all, it would benefit all fabric shops if every fabric seller decided to implement manufacturer suggested pricing at least during that important 'sizzle stage.' And let's face it, the advantage to selling on a place like Etsy or eBay or Artfire is that you should have a built in customer base. You should be selling there to reduce or remove your marketing and advertising fees. Otherwise, you have to ask, what is the benefit?

This is just my opinion, and I know that many of you reading this are fabric shoppers, not fabric sellers. I personally love buying fabric on sale. I know how great it is to purchase fabric at a bargain.

Fabric is expensive, and if you're making a lot of stuff, you need a lot of it. Having been on the other side of it, however, I can't help but wonder how long these shops can last selling fabric at Walmart prices. Walmart can't survive selling at Walmart prices, so I'm pretty sure the independent seller can't either.

I know this is a long post, but I'd love your feedback on it.
:) Diane


Next up: Benefits of Your Own Online Shop.

Random Thought of the Day

As you know, I'm moving. I am spending nearly every moment of every day purging and packing. One of those purges was to go through all my old Martha Stewart Kids magazines and decide which to keep and which to give away.

What struck me as overly geeky, was as I flipped through the pages, looking at the sewing craft projects, I stopped looking at the project and started identifying all the fabrics by pattern name and manufacturer. "Oh there's Alexander Henry's Hot Dot in brown mixed with Michael Miller's Ironwork scroll in lime."

When I read the magazine the first time, those thoughts were nowhere near my head. I only looked at the color and pattern and almost always sized it up as 'pretty' (Martha's staff does have impeccable taste). It just goes to show how I've come to look at things very differently after handling fabric for over a year.

:)

Best of the Best

Jim Salinas has more than 35 year of experience in the business, the last 10 of these has been as a sales rep for Moda. He lectures regularly at International Quilt Market in Houston, and writes a column for American Quilt Retailer called "Just Ask Jim."

Sitting down to the Best of the Best lecture in Houston was an experience into itself. You could feel the excitement in the air. I couldn't imagine what was going to be so great, but yet here I was in one of the larger rooms in the convention center and nearly every seat was filled.

What I am including here is some of the points he brought up that I think would be of general interest to anyone who is curious about the selling side of the quilt shop business.

• Retail fabric purchasing has changed over time from an apparel/necessity business to a creative sewing industry. Quilting and creative sewing are continuing to grow, while sewing as a necessity has gone away.
  
• Department stores used to carry fabrics, and WalMart is the last of which to which to do so. At the same time, they are reducing and eliminating their fabric departments. Every 7 years WalMart renovates a store, and most of the time they eliminate their fabric department during the renovation. Hobby Lobby has started to only carry solids and basics, and JoAnns has turned themselves into crafting stores. The only shops growing in this industry are the independent quilt shops.
• For the small business owner you may have an easy time building up a great balance sheet, but have a hard time making a profit. It all comes down to inventory management. Quilt shops should aim to turn their inventory 1.5-2 times per year.
• Designer/ Trendy fabrics have 3 lives. The sizzle stage is when new fabrics have been in the shop 6-8 weeks. After that they become old and need to move to the color wall separated by color and style. They can live for 10 months in a color wall. The 3rd stage is clearance. After a year, it is more important to sell these fabrics for shelf space over making profit on them. (This advice is aimed for a brick & mortar shop, but still applicable for an online shop.)
  
• Dress up your sale section. Nobody wants to buy fabric that looks like a stray.
• Old stuff in this industry is 2 months old (for Designer/Trendy fabrics - not basics).
• Most customers come into your shop with 2 mind sets - "What's new?" and "What's on sale?"
• If you don't manage your inventory, your customers will. They'll take the cream off the top and leave you with the rest.
• Managing and understanding expenses is important. It takes $300 in sales to make $30. Keep this perspective when considering expenses.
• It is harder to break even than it is to make a profit.
• You need to increase sales each year by rasing prices.
• Your cost of fabric is the landed cost = the price you paid for the fabric + what you paid to have it shipped to you. Mark ups need to be based on landed cost, not base cost. (I would add: consider merchant fees as well - Etsy, PayPal, Merchant Account...).
• Time management: Plan time for the things that you need to do every day (in your shop), how often do you need to update your books, restock inventory, etc.
• Your first hire should be a stock person (I would add: for online shops make it a cutting/ packing/ shipping hire).
• Implement a good loyalty program and build relationships with your customers. (Good business advice for anyone).
• Remember no two shops will ever be exactly alike. There are so many offerings out there that it is impossible for two competing shops to have the same exact inventory.
  

At this point, Jim started talking about the industry in general. The popularity of sewing lounges and indie crafting. This was in fall of 2007, and when he mentioned Etsy as a place to see what 'young people' are making, nobody had heard of it. I could tell this by the sound of a thousand people scratching the word Etsy on their notepads. He recommended that you think of your shop as a Creative Sewing Center and not just a quilt shop. Over the last few years crafters are making more than just quilts and you want to embrace them as customers.

There are more gems of wisdom, formulas of what type of inventory your shop should carry, and markup percentage suggestions in his book, "The Answer Book" available to retailers.


Next up: Selling the Stuff - Etsy

Colonial Dress

Never in my life did I envision myself sewing a colonial style dress. One 7 year old obsessed with American Girl dolls plus an upcoming trip to Colonial Williamsburg equals one mom's attempt at making a modernized but passable colonial style dress.

The fabric was easy enough to find - I have long admired Kathy of Pink Chalk Fabrics and she thankfully, thankfully had this one below on sale. My daughter took one look and exclaimed 'that one!' and looking closer I saw it was from Windham's Centennial collection 1780-1880, perfect.


Then we needed to select something for the bodice, and ordered this one below to coordinate. It's a little bigger and bolder, but only a small piece is needed, and the color was perfect, so I think it will work.


On to the pattern. It will take a bit of a hack to make it, um, wearable - in Virginia, in August - but I am going to use a pattern from Rocking Horse Farm as a base to work from. ETA: That pattern never, um, arrived. (I unsuccessfully tried ordering from a new place) so I found the McCall's one on eBay for $5.00. Hopefully it will arrive soon!!!

In searching for the pattern, I found this blog post by Mama Made, where another mother had the same exact idea. I love how it came out, and love that she used some Amy Butler as the main print. Had I seen that blog post first, I might have gone with the McCall's pattern, but it's always good to start a new adventure.

The trip is planned for August 1st, so I have a few weeks to complete it. I'll post pictures when it is complete. :)