craft business tips

Craft Marketer Newsletter 
Issue Number 4, July 17, 2000
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IN THIS ISSUE 
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1. Selling your crafts at online auction sites (part 1)
2. Are you making a profit? 
3. Free web hosting for your business 
4. Subscription Management 
5. Contact Information 
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1. Selling Your Crafts at Online Auctions (part 1)
by James Dillehay 
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Auction sites online provide an excellent opportunity for 
craft sales. Ebay.com is the largest and most 
popular auction site with over 1.5 billion page views per 
month. A list of the other major auction sites appears at
the end of this article.

One advantage of getting your products up on an auction 
site like Ebay is that they already get the traffic you want 
so badly - like 12 million customers. 

Auction customers can find your web site when you link your 
auction pages to your web site catalog. This method will 
boost your siteís traffic many times over. Cost to you is 
little but a small listing fee to the auction site.

When beginning to sell at auction sites, spend time visiting 
and reviewing the sites listed below. Check out other arts 
and crafts listings as well as their related web sites. Use 
the search engines at Ebay and the other auction sites so 
that you understand how they work. 

Types of auctions

Reserve auctions - Bidders are aware there's a reserve price, 
but they do not have access to what it is. To win the auction, 
the bidder must have submitted the high bid and must meet or 
go beyond the reserve price. Typically, when the reserve 
price is not met, the seller does not make the sale and the 
highest bidder is not obligated to buy. In general, reserve 
auctions are not to your advantage. Most people avoid 
reserve price auctions because they have no idea what the value 
of the piece is. 

Instead of setting up a reserve auction, simply set up your 
auction prices at a minimum amount you will accept. If the item 
doesnít sell, start again at a lower price or list different 
items.

Dutch auctions - This type of auction is for selling multiple 
copies of the same item. An example would be 10 mugs, 17 sets 
of earrings or 25 pattern books. Sellers list an opening bid 
or minimum price along with the number of items for sale. 
Bidders enter the price they want to pay and the quantity to 
buy. All winning bidders pay the lowest successful bid.

Private auctions - This kind of auction protects a buyer's 
privacy. Bidders' email addresses are not displayed on the 
item or bidding-history screens. When the auction ends, the 
seller is the only one who knows the winner. Private auctions 
canít be tracked by the bidder and so, are less popular.

What auctions cost you

As a seller, you pay an insertion fee to list your item on 
an auction. Insertion fees range from $.25 to $10 or higher. 
When the item sells, you will be charged a value fee which 
ranges from 1% to 5% of the selling price. 

To get your item listed in bold print or as a featured item, 
expect to pay additional charges. I recommend you avoid 
spending extra money in the beginning on listing features 
such as bold letters. Most people will find your auction 
because they are searching for keywords related to your 
product. You might attract a few viewers from a feature 
listing, but your most likely prospects for placing bids 
will be searchers looking for specific items.

How to sell at auctions

Hereís the steps involved in setting up to sell on the 
auction sites:

1. Draft a benefit laden description of your product. Gather 
all your images and text descriptions. Use graphic bullets 
to emphasize each benefit or feature.

2. Determine your minimum selling price. You may have to 
experiment at first. Learn what prices people will start 
bidding on.

3. Set up an account with the auction site. 

4. Write the URL of where your product images will be located. 
Create your page at the auction site using your images and 
text descriptions.

5. Link to your website if your auction prices are not lower 
than prices shown on your web catalog.

6. Decide which categories your item fall under - there should 
be several. Determine other areas your customers will visit and 
list there, too.

7. Save all the above info in a spreadsheet or database file.

8. Enter the auction siteís "sell your item" page and fill out 
the appropriate forms. Since you created the info once already, 
simply copy and paste from your file into the required fields. 

9. You will get a confirmation page or email with a number for 
each auction you are posting. Write this number down or enter 
the number in your spreadsheet or software for tracking auctions.

10. When your auction closes, contact your winning bidder or 
bidders, usually within three business days. Confirm the final 
cost, including any shipping charges, and tell them where to 
send payment. When the bidder sends in payment to you, send them 
your item. 

Check out the seller's guide for more tips on selling at eBay.com. When you master the art of auction selling there, the other auction sites will be easy
to learn.

This article is excerpted from the book:
Selling Crafts on the Internet.

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2. Are You Breaking Even?
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A good recordkeeping system helps you effectively analyze 
your sales and expenses to see where there are strengths and 
weaknesses in the way you do business. Without this knowledge, 
you might be selling thousands of pieces and still not be 
breaking even. 

Break-even is when your total costs or expenses equal your 
sales or income. To learn your income multiply:

selling price x number of units sold = net sales

For instance, say you are a stained glass artist and your 
average piece sells to stores for $50 and your expenses 
average $900 per month. Here is how you would determine 
the number of items you would have to sell to meet your 
expenses given those figures. "Y" is the number of units 
you need to sell.

$50 x Y = $900
$50Y = $900 
Y = $900 / $50
Y = 18

You must sell 18 pieces a month to meet your costs of 
staying in business. That's good to know. But you must also
learn whether each piece is worth making. That is, are you
making a profit?

Figure your material costs, labor costs and an estimated
hourly cost of doing business for each item that you sell. 
Your hourly cost of doing business is figured by adding up 
all non-material and non-labor costs like rent, utilities, 
phone, etc.. Divide this sum by the total number of hours 
you work in a year. The resulting figure is your hourly 
cost of doing business.

Add up the material costs, labor costs and hourly cost of 
doing business. If the sum of these numbers is less than
the price you are currently asking, the piece is priced
profitably. If the sum is greater than your current price, 
you are losing money with every sale.

For more strategies on becoming profitable through
pricing, recordkeeping and tax advantages from your craft 
business, see 
http://www.craftmarketer.com/pricing-crafts.htm.

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4. Subscription Management 
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