Do You Want Scale Or Magnitude, Or Both When Selling Handmade Items Online?

What am I talking about? Scale and magnitude refer to different approaches of running a handmade business. Your business may operate with scale, magnitude, or maybe both. It depends on what you make. Since handmade businesses are usually run by a single person they are more limited than conventional businesses in the time and manpower department. You do not have the benefit of automated production lines and multiple employees.

Scale – Scale is the maximum number of handmade items you make in a certain period of time. When making handmade items this usually means you sell lower priced pieces, but a lot of them. You can produce a lot of an item if it is simple to make, but simpler items also command lower prices and have lower profit margins.

Limitations with scale – There are only so many items one person can make by hand in a given time. If you can physically make 40 items per week and sell them for $4 each, would you be making enough profit to meet your goals? Your income is limited and if your goal is to make more profit then you will either need to raise your prices if possible or decide to make an item that can command a higher price.

Scale and Success – One thing that can be very frustrating with making handmade items is sometimes you have to turn down orders. In this case I am not talking about the orders you do not want to take on, but the ones you wish you could. If a store came to you needing 300 items, would you have to turn them down? It may be a fantastic offer, one that you dream of getting, but can you physically make that many items in their given time frame?

Scale and Marketing – If you do make a lot of items then you will need a lot of traffic to your store or website in order to sell them. From the example above, are you receiving enough traffic to expect 40 sales per week? Regardless of your price-point, if you want to sell a lot of something you have to have a lot of people looking and wanting to buy.

The good thing about selling handmade items online is that you open yourself up to a global market. It is possible to reach a huge audience. Your customers are out there, you just have to attract and connect with them.

Lets compare the internet to selling locally. You can sell in stores or at craft shows. If you sell your items through one store you can only expect so much traffic and sales and the people who see your items would usually be locals. If you sold in a dozen stores though you would expect a lot more traffic and sales. In order to reach a larger audience and get more sales you would need to have your items in multiple stores.

Craft shows are a little different. You can reach a large audience and those people could be coming from all over. People also come to shows ready to make a purchase. The number of items you can expect to sell is limited by the number you bring to each show, by the number of attendees, and by the fact that craft shows do not take place every day.

Magnitude – Rather than go with the scale approach, you could focus on magnitude. In this case you would be making fewer, higher priced items. This could be jewelry, sculptures, or paintings. You are obviously still limited by what you can physically do each day, but what you do make is worth much more.

Limitations with Magnitude – Artists can fall into this category. If you are well known you can command thousands for each of your original pieces. The problem is they probably take a long time to create. How many high end pieces can you expect to finish each month? Probably not too many.

Can you have scale and magnitude? You may find that you can do both. Maybe you are an artist or sculptor. You can only paint so many paintings, but each one is worth quite a bit. That would be your magnitude. Say you also produce prints of these paintings. The number of prints you can sell is virtually unlimited, even if you are a one person operation. In this case you would be taking advantage of both scale and magnitude.

If you like to sculpt you can choose from many different mediums. Some will be be more scalable than others. If you carve amazing sculptures out of wood you may be able to command high prices but you would be limited by how many you could physically make each week.

What if you worked with bronze instead? It would still take you a long time to make an original sculpture, but when it is finished you could use it to make a mold and produce more. You would still be sculpting everyday but since you could reproduce your sculptures more easily, you stand to have higher revenues by being able to sell many higher priced items.

What are you goals with selling handmade items? – Everyone’s motivation for selling items that they make is going to be different. The business side of it may not even be a consideration. You may simply love making things and your house would be full of them if you did not sell some. On the other hand, a job loss may push you to turn a hobby into an income producing business. That is when you start thinking about what you make, how many you can physically produce, and at what price point you need to sell them for in order to cover living expenses.

What are your goals with selling handmade items?

Richard

Tags: scalability, scale