I'll begin by saying I am not a business person. I'm a stay at home mom and wife, and occasionally, I have a creative thought or two. ;)
Over the past year, Commonfolk has gone from me making all the bears and doing everything in my little company, to hiring help with sewing so that my husband and I just run things (social media, customer service, bookkeeping, collaborations, events, etc). It has gone from a profitable hobby to a legitimate company, and I have scrambled to keep up with the pace of it all, doing my best to maintain grace and learn as much as I can every day.
Late last year I realized my business was in a little bit of trouble. Somehow I wasn't making as much money as I should - and by that, I mean I wasn't making enough to really even cover the expenses to keep business running. It was getting to where I might need to close. I went from being able to have my shop open every day to having to restrict when it was open again (only one or two times a month), and cut off all wholesale orders (even though I absolutely adore my retailers). I've never had a business before, so I admit, I was a little confused.
I hired a consultant to come in and tell me what I was doing wrong. We went over all of my expenses and income, and I learned how much it really cost to make each size of bear (and it was a lot more than I had estimated). I learned that wholesale was really not working for me, so I very sadly closed my accounts with the incredible stockists I had been working with, planning on opening it back up once I figured everything out. My migraines got to their worst point so far, to where I was unable to do anything - read, speak clearly, think, leave the house (not exaggerating here) - it was tough. But I kept business open, and issued lots of apologies for late packages and delays in customer service.
Throughout this month, I've done slightly better migraine-wise. This has allowed me to take a look at the business and the things the consultant and I went over. Imagine my surprise when I found out that due to the cost of materials and labor alone, I need to be charging way more for bears then I am currently. I have no idea how I didn't realize this before.
Long story short, beginning March 1st, I will need to increase the prices of almost every bear. It will be a big change. I have raised my prices before, but this time, these prices will accurately reflect my actual costs.
To give you an example, because I think details are important, it costs over $15 for a tall bear to be made. This includes the materials, labor, and bare minimum packaging. This does not include any costs of running my business, or any other materials or services I might need to do so.
In my last blog post, I talked about why my bears are so expensive. I laid out the pricing formula that everyone uses when deciding what their retail prices should be. This formula is:
COST x 2 = WHOLESALE PRICE (the price a store pays that wants to sell my bears)
WHOLESALE PRICE x 2 = RETAIL PRICE (the price customers pay)
I'm sure just looking at that, that you can do the math. $15 times 2 is $30. $30 times 2 is $60. I will need to change the price of the tall bear to at least $61 to make a profit and stay in business.
There is no way to sell at a lower price unless I compromise my values and personal ethics by having my bears made in a factory in another country. I choose to employ hardworking, dedicated people in the USA for their passion and skill. The women that work for me take months to perfect their talents until they get it just right. They raise their children all day, then work when their babies go to bed at night. They love what they do, and I pay them appropriately for their quality work. That is part of what you pay for when you shop with Commonfolk. That is what you support.
I will open my shop two times in February, and the prices will remain what they currently are now for those openings. After March, the new pricing will be applied.
I will have sales, and I will also be coming out with several new products. I plan on putting a lot of effort into creativity and making my turnaround times much faster (if you've ordered lately, you'll notice I've been shipping within about 2 weeks instead of 6!). I'm starting up wholesale again, so you can buy ready-to-ship and exclusive bears from your favorite boutique shops.
Thank you so much for your support of my business. Every single time a bear is purchased I am so humbled. The fact that my artistry is so well-loved by so many people is incredible.
I could go on and on about how much this company means to my family, and how it has allowed my husband to stay at home with us and take care of our kids, and take care of me through my daily, severe migraine aura symptoms. I could tell you how I stare at disbelief every time I open the shop and watch the orders pour in. I could tell you that I wish I could hug every single one of you, from customers to other shop owners, who have purchased from me, shared my bears with their friends and family, or given me constructive criticism and advice.
Instead, I will just say that I am very grateful, and I love what I do. Thank you for being the reason I can do it.