The handmade business model is a trap.
I learned this hard truth while running my nursing necklace business, Oh Purple Panda, back in 2015.My first daughter had just been born. I wanted to stay home with her, but also earn a living. So I started making necklaces and selling them on Etsy and Shopify. I quickly started getting some sales here and there, but no matter how much I posted on Instagram or paid to renew my listings on Etsy, sales were painfully slow.
I was spending so much energy on trying to get each sale that I got to a point where I didn’t have time to actually make the products. I would cringe a little every time I got a sale, because it meant more work for me. I was in a trap of spending time doing things that didn’t make me money and resenting every time I did make money.
Heartbreakingly, many women are lured into the handmade business model because it’s sold as an easy way to support yourself and your family.
That’s the dream, right? To have it all?
Too often, however, only after she’s invested countless hours of her time, her own seed money, her hopes and dreams, and possibly even her reputation, does the woman learn this truth about running a homemade business.
After struggling with the business for more than a year, I finally realized that the problem wasn’t my lack of dedication, or hard work, or passion. The problem was the business model itself.
Let’s look at why the handmade business model is flawed.
When you have a handmade business you’re essentially runningtwo businesses intwoseparate industries: one in manufacturing and one in retail. You’re making the product (what a manufacturer does), and selling it, too (what a retail store or site does).
Running two businesses means double the work.
Let’s illustrate this a bit more using business organizational structures.
Structures define all the roles and responsibilities within the business. In general, the organizational structure of a manufacturing business includes the roles of CEO, development, production, marketing, and finance, while a simple retail business usually has a structure that includes a CEO, marketing, operations, and finance.
In short, that’s a lot of roles that need to be filled.
One person cannot do all of that work (at least not in an optimized capacity). And, maybe more importantly, one person does not have all the skills needed to fill all of those roles.
Running ONE business as a soloprenuer is hard enough. Running TWO, in two different industries? That’s downright impossible.
In this handmade business model you’re:
- making the product and marketing it
- juggling relationships with suppliers and end consumers
- managing inventory for manufacturing (supplies, materials) and sellable inventory (finalized products)
All while trying to make a profit and still have time to raise your kids.
This is why you’re both exhausted and spinning your wheels. You’re not failing. You’re trying to do the impossible. Making things worse, you’re also disappointed, because it isn’t the dream path you thought it would be.
The handmade business model is sold to women as a way to find freedom and balance. “Make something you love and sell it! It’s the easiest way to make money!” In reality, it’s the easiest way to get stuck in a trap of constantly working, feeling stressed, feeling burnt out, and feeling like a failure when the money doesn’t start rolling in.
You’re not a failure. You’re trying to do too much.
Of course, running a business is never truly easy. But therearemodels that are simpler.
Right about now you might be thinking: “Hey! Aren’t there a lot of handmade businesses making money on Etsy?”
This, too, is a fallacy. It’s the image Etsy projects, yes. But what are the best things to sell on Esty to make money? Well, they’re not handmade.
If you dive into the top selling items on Etsy you’ll find that most are selling supplies (not finished products) or they’re selling “semi-handmade” or “handmade” that is not handmade by them.
In fact, as of April 2021 the top 10 Etsy sellers were selling:
- party supplies
- jewelry supplies
- minimally customized jewelry
None of these top selling stores are selling fully handmade products. And that’s because that’s an impossible feat.
So why is nobody talking about this?
Well, a big reason is shame.
Since women are told this is an easy business they can run (while somehow raising kids, managing a household, and doing everything else that’s expected of them), when the business doesn’t pan out, she feels like it was her own fault it didn’t work. And others will blame her as well. “If she had worked harder, then the business would have succeeded.”
But really the failure is that of the business model. Not of the individual.
So what’s the alternative?
After struggling with a homemade business that was draining my energy and bank account I realized I didn’t have to make the product I was selling. Instead, I could work with a manufacturer. And I could even work with a manufacturer that hand made a quality product I was passionate about selling.
So does this mean I shouldn’t follow my dream of being a handmade artisan?
If you truly want to be a manufacturer, I recommend you focus on selling wholesale rather than trying to run your own retail shop. Wholesale is the traditional business model for manufacturers. This allows you to focus on what you’re good at, which is production. Then, instead of selling one item here and one item there, you sell multiple items to one client.
This gives space for product development and production and reduces the time needed for customer service and marketing.
Most manufacturers do not sell to the end consumer for this reason. They’re good at manufacturing. They’re not good at managing a retail business. If your strength is also in manufacturing, consider going wholesale.
If, like me, you prefer the retail business vs. manufacturing, your best option to start an ecommerce business is to have your product manufactured by someone else.
You can find a manufacturer to make your proprietary product or find a product that’s already being manufactured and brand it (this is called private label or white label). Private labeling is the route I took when I pivoted from my handmade nursing necklace business to my Turkish towel company.
Note: This does not mean you hire anemployee to make your product for you. Because you’d still be responsible for running two businesses. Working with a manufacturer means they handle all the production responsibilities for you and you get to focus fully on what you do best, which is retail.
This is now the repeatable method I exclusively use in all my businesses, and teach others how to implement themselves.
And what happened when I stopped trying to run two businesses and focused instead on running one? I built up and sold The Bali Market in less than 5 years.
Isn’t private labeling soulless?
You got into a handmade business because you wanted to sell something you’re truly passionate about. Something high-quality. I get that. But keep in mind that selling a product made by someone else doesn’t mean you’re reduced to selling junk.
You just need to find the right product, the right manufacturer, and back it with your own values and integrity (and this is done through branding).
And the best part is you only need one product.
When I started selling Turkish towels it was because I truly loved using Turkish towels. They fit my lifestyle of minimalism and simplicity and I built the brand around those values.
But how did you know the towels would sell?
With passion and values dripping from the brand, selling the towels was the easy part. I took my time and was methodical about choosing a product I knew would sell. So, before I started an ecommerce business, I started with a product I believed in.
And yes, you can maintain high standards for quality when using a manufacturer.Andyou can find unique products. There are more options than just Alibaba and China (though both are viable options to use, depending on the type of product you sell).
Manufacturing happens all over the world and certain countries are known for certain products. Many manufacturers are willing to work with you on minimum order quantities. Working with a manufacturer doesn’t automatically mean you need to order 50,000 units. I’ve placed orders for less than 500 units (some just 100 units) with every manufacturer I’ve used.
>>> I tried the homemade route, and then overcame my own doubts about working with a manufacturer and I’m here to tell you that it is 100% possible to find and sell a product that fully aligns with your values, that is truly high quality, and that sells well.
It's fully possible to love what you sell, even if it's not handmade by you.
But first, you need a product. A really good product.
Uncovering the right product for you to sell is the first step to creating a business you truly love (and is also profitable).
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