5 Success Tips for Artisan Businesses

AOW connects with Carol Campbell, a former furniture industry executive who decided to change direction and dedicate her life to artisan enterprises. Today she acts as a consultant to artisan-based businesses seeking to develop a market in the United States. AOW ask Carol for her five tips on how to be a successful artisan enterprise. See Carol's response below: 

"The US market has changed a lot over the past ten years.  While the level of consumer interest in artisan-made goods has never been greater, the path to reaching that market has never been more challenging. With the decline of independent retailers and boutiques, the type of buyer who is willing to foster a long-term relationship with a smaller artisan producer has nearly disappeared. Ten years ago, I took an artisan product's wholesale business from $15,000 to $1,000,000 in 18 months. Today, the customers who made that possible are no longer around.

Artisan businesses who want to succeed need to be much more strategic about how they approach the US market. That means understanding the market including distribution channels, then planning and budgeting for success. I recommend taking the following steps before coming to the US:

1. Make a Plan.

Decide what you want to do and how you want to do it. Be specific. “I want to sell my products” is not a plan, it’s a pipe dream. The US market, like any market anywhere in the world, is competitive. Who do you want to sell to, what do you want to sell them, and how much do you need to sell to make your efforts worthwhile? How will you reach new clients and get them to notice you? What are their needs, including packaging, shipping and payment? How are you going to address those needs? Are you prepared for their questions?

2. Know Your Target Customer.

The first question to ask yourself is always “Who is the customer?” Do you want to sell wholesale, direct to retail or direct to consumer? All these channels are reached in different ways, require different strategies and, most importantly, differentiated budgets. Focus on one channel initially. Within that channel, what is the design and market profile that fits your product line? If you make traditional, culturally specific products, it may not be realistic to target a contemporary retailer. Try to understand who will respond to your products and anticipate their needs.

3. Price Appropriately.

Pricing isn’t one of the things, it’s the only thing. Fortunately, it’s never been easier to do pricing research. Just pick an online retailer that is either on your target list or has the design/market profile you have decided on. Take the retail list price of a product that is similar to your product and divide by 5.  Repeat. After you’ve done this a dozen or so times, you should have a target FOB price point range.

For a good sense of “better” pricing, I recommend going to West Elm at www.westelm.com.  Find products in your category – it doesn’t matter if they look like your products or not. For example, if you sell pillows, analyze the pricing of other pillows whether they are printed, woven or embroidered. No matter how special your products are, they still need to fit into the buyers’ price point range. Buyers rarely buy outside their price point range!

4. Understand Categories.

Big-store buyers buy by product category. For example, a wall décor buyer will only be able to buy wall décor. These are, for the most part, the only volume buyers – the only ones who will give you a big order. To interest that buyer, you need to communicate that you are committed to that category. Don’t think that you can put one mirror on the wall and attract a mirror buyer. You need to understand which categories are important and what kind of critical mass of products you need to offer to be considered as a resource. Or be content with selling one or two mirrors instead of a container full of mirrors.

5. Have a Sales Strategy.

Whenever I’ve presented a business plan, I’ve noticed that potential investors focus on two things: the executive summary and the sales strategy. It’s not enough to have a product, you have to know how you are going to sell it. Online retail platforms, wholesale trade shows, sales representatives, showrooms – they all have different requirements and different associated costs that need to be budgeted for. It’s not all design and flowers. You should have a plan to get your products into the market and be prepared to pay for it.

Keep in mind that the days when you could show up at a trade show and expect to sell a lot are over. A trade show is not a sales strategy. Today, you need to treat your trade show booth as a clubhouse, not a storefront. In other words, a place to meet the clients and potential clients that you have already reached out to via marketing and sales representatives.

So be thoughtful and be successful! Good luck!"