Our Most Expensive Shop Owner Mistakes (And How To Avoid Them)
In today’s blog post we’re going to revisit Episode 3 of our Big Plans Podcast: “Revealing Our Most Expensive Mistakes.”
Someone once asked us whether we’d ever lost money while running our business. The answer is yes! We thought this was a really good question because definitely one of the risks of running a business is not making back the money you put into it. We’ve learned some hard lessons along the way, but honestly they were really good lessons that lead to growth for our business.
Here are a few of our biggest mistakes and what we learned from them so you don’t have to learn the hard way like we did.
- Using envelopes with stamps instead of tracked shipping.
When we first started out, we used envelopes with stamps to mail out our orders instead of regular standard shipping with tracking numbers. We thought this would save us money, however, once we switched to tracking, our return customer rate increased from 30% to 70%.
- Ordering from China (or any manufacturer) with little or no samples.
Make sure to ask for multiple proofs and samples from multiple manufacturers. For our first planner, because we were in a time crunch, we had only one sample made. This was super costly because we ended up placing a huge order and what we received had several quality issues that we had to sell for less.
- Cheap Customers.
Your cheapest customers may end up being your most costly customers. *Unpopular Opinion* It’s not always worth it to bend over backwards for these types of customers who always find something to complain about as they may end up costing your business more time and money.
- Not valuing your time/labor costs.
In the end, time is money. Before we invested in multiple printers, cutting machines, and label printers, we wasted hours of time that could have been better spent on more revenue-generating tasks for our business.
Questions From Our Listeners
Q: How do you find your manufacturers?
A: Alibaba! Literally head to their website, plug in what you want to make into their search engine, and start messaging manufacturers that come up. Keep in mind that you will most likely need to purchase a large MOQ (minimum order quantity), which might not be realistic for a small shop. For example, there are manufacturers who have a minimum order quantity of 1000 planners. That means you will have to purchase a minimum of 1000 planners, typically of one design. So if you had 3 designs you wanted produced, that would be at least 3000 planners. Even if you think you can sell it all over time, you will also need to figure out where to store this many items. Then there are freight costs, such as shipping by sea or air. There are times we have to wait several months for a shipment because it is traveling on a ship.
If you are a small shop, I highly recommend checking out the shop co-op. The founders of the group wanted to create a space for shop owners to come together and bring their creative designs to life, in an affordable fashion. They work really hard to offer quality items at low prices. Keep in mind that the prices may not be the lowest that you can possibly find on the market, but their items are tried and tested before they run any buys. This is also perfect for smaller shops, because they are able to place large group orders that allow you to order less items individually. They do a great job of facilitating the communication between you and the manufacturers.
Q: How do you know how much to order for supplies/product so that you’re saving money on the quantity but not buying too much that it won’t sell?
A: Look at your history to see how long it took you to use up or sell the product, and then use that to calculate how long you think it’ll take you to use it in the future. Also, think about how much you will price this product for. Our tip is to price it higher because you can always put it on sale, versus pricing it too low and you can’t put it on sale because you will lose money.
Q: I only get customers during sales, and they never shop when I’m not having a sale. How do I get people to purchase more consistently?
A: There are a number of ways to have more consistent purchases that don’t just occur during a sale. First, have consistent releases. Second, don’t have your customers depend on sales. In order to do that, don’t offer sales all the time (at least lower the frequency) and offer lower sales percentages. If you do have sales, you can have a minimum purchase amount or offer other promotions like freebies and free shipping.
We hope you’ve found our advice to be helpful and that you can avoid mistakes like these too. Mistakes and failures are a part of life, especially as small business owners, but it's not our failures that define us, but how we bounce back afterwards.
Be sure to listen to the full podcast episode #3 for all the details!
How to subscribe + review:
Want to be the first to know when new episodes are released?
If you enjoyed this episode, please consider leaving us a review on iTunes and five stars on Spotify. Your five stars mean everything to us.
Share on social?
Did this episode help you? Help us get the message in front of more people by sharing it on social media. If you do, tag @stickerguru and @bigplanspodcast so we can repost you! :)
Thank you SO much for being here. See you in the next episode!
xo, Lisa & Lucy
Hey!
