Why Support Artisans and Makers?
We’ve heard time and again that handmade items are pricey, or not affordable!
Some customers may not fully understand what an artisan or maker puts into their craft. For many of us, our craft is our full-time job - the means by which we support ourselves. In order to build a successful and sustainable business, we have to factor all costs into the final price tag.
So I thought I'd shed some light on the business of handcrafted items and why it's important to pay what such products are really worth.
A DECADENT PRICE TAG?
Consider a simple pair of earrings with a price tag of $25. Overhead costs can be extremely high, especially for those with brick and mortar stores, but even those of us working from our home offices and studios incur overhead, as we have material costs and labour values. In order to make a profit, we add a margin to sell our goods wholesale or retail, while considering local markets and competition.
First, factor in overhead costs (rent, heat, insurance, electricity, tools, office supplies, marketing, storage, bookkeeping, etc.), then material costs including shipping, and finally, a profit margin.
Using a low margin of 40%, the maker would need to sell more than 3300 pairs of earrings in order to make $50k per year, which is the average Canadian income. That breaks down to approximately 64 pairs of earrings per week.
Notice labour costs were not included in the above calculation. If the profit margin is lowered, say in the instance of a sale, the overall annual income drops.
An artisan who makes what they sell would struggle to keep up with that sales volume, even if they were able to attract enough business. They would also need to find time to do the marketing involved in finding those customers, find time to do markets and events, pack orders, run a website, and perform administrative tasks. Oh, and let’s not forget have a life.
How do we resolve this?
The obvious and easiest option would be to up the price substantially and aim to sell a lot fewer products to earn enough income from them.
Another option might be to outsource work to a country where labour costs are vastly lower (which will probably still add to production costs and require a price increase anyway).
There is nothing wrong with outsourcing production of finished designs, provided it's done in an ethical and sustainable way (some of our own components are made this way), but it does change the nature of the business: you can't both want to buy entirely locally handmade products while also expecting those products to be very inexpensive.
Apart from showing that $25 is far from a decadent price tag for even a very simple handmade item in Canada, my calculations are also a good illustration that making very basic designs assembled from mass-produced components is unlikely to build a successful and sustainable handcrafted business in the longer term.
SHOP SMALL: CELEBRATE & SUPPORT LOCAL MAKERS AND ARTISANS
I encourage you to support local and Canadian enterprises. Please recognize the value of artisans’ work. Keep in mind that very few Canadian artisans are able to make a viable living from their craft.
Being truly supportive of independent artisans and small shops means embracing the fact that that we need to generate enough income from our businesses to get by in our local economy.
If you're shopping from local artisans, always bear in mind that their cost of living is likely to be much the same as your own. If we aren't able to make enough income to get by, then we will have to find other work and the businesses you love will simply disappear.
Artisans and makers should be celebrated for their skills and knowledge, the uniqueness of their products and for keeping these sorts of creative, micro-businesses alive in your community (and all of the benefits that come from doing so).
Often customers are used to buying very cheaply made mass-produced imports, many of which are created in pretty grim circumstances.
Celebrating cheapness will ultimately kill off small shops and handcrafted businesses. Instead, let’s celebrate and support our local community of artisans and makers by recognizing the value of their skill and creativity.
Adapted by Diane Bossé and Leslie White