Limiting Order for the Sake of My Business
I want to preface this post with this statement: If this doesn’t sound right to you, don’t use this method. I am simply sharing what works for me and what I believe is best for MY business.
So, something popular hits Facebook or Pinterest. Elsa hats are now the end-all-be-all of gifts and everyone wants one. No, everyone NEEDS one.
As a result, 3720 crocheters are now making Elsa hats and selling them like hotcakes. The competition is fierce. People start out selling them for $30 — then someone comes back with $15 — pretty soon there is someone selling them for $8 and she has 125 orders!
I refuse to fall into it.
DO NOT LOWER PRICES TO INCREASE ORDERS. The person with low prices and tons of orders is not making more money than you, they are simply working harder than you.
Make a better product (or a slightly more unique product), and keep your prices reasonable. (Click here for my blog about pricing.)
Let’s do the math:
10 hats at $30 per hat = 10 hours of work, $300 gross profit = $30 an hour.
20 hats at $15 per hat = 20 hours of work, $300 gross profit = $15 an hour.
50 hats at $8 per hat = 50 hours of work, $400 gross profit = $8 an hour.
The person who chose to lower their prices now has tons of orders. They also have a full schedule, sore hands, and only $100 more in their pocket (which they are probably spending on Ben-gay for his/her hands).
The person who limited their orders and kept their fair prices has a nice open schedule for her/his family and other orders, can still move her/his fingers, and is still coming out with $300.
But I take this one step further. This is often where I lose people.
Set a cap on how many orders you will take for a certain product.
Here is why:
1. Prevent burnout.
I have also watched crochet business stay open for one or two seasons and then completely fizzle because the artist is exhausted and tired of making the same thing over and over for very little money. No one can continue this kind of a business for very long.
If you are on row 28 chanting, “Fifteen dollars, fifteen dollars, fifteen dollars,” just to get through the darn thing, you are approaching burn out. You are now taking more of your time than a full-time job and making very little money for it. Burnout kills businesses. Period.
2. Keep quality high and consistent.
To put out more of something, you have to skimp on quality. It is a fact of business. It’s why Old Navy shirts don’t last as many washes as Express, or RoseArt crayons are weak and Crayola are bright and colorful. In order to make a cheaper product, you need a simpler, faster pattern and cheaper materials.
By limiting your orders, you can afford to do fun, intricate stitches and use nicer yarn. Even discontinued yarn that you found on clearance and will never find again. Someone who has unlimited orders can’t buy nicer yarn or take the time to do intricate stitches and still turn a profit. They need yarn that is mass produced, and stitches that can be worked fast.
3. Keep your individuality.
If they can get the exact same thing somewhere for cheaper, they will. It’s basic consumerism. However, if your product is special — if they can’t get something just like it anywhere else — they will not be saying, “Gee, I want an Elsa hat.” They will be saying, “Gee, I want THAT Elsa hat.” Make your work shine. Make the only Elsa hats with little gems in the braid, or with the child’s name stitched into the brim. No one selling them for $8 can afford to add extra time or expensive materials for detail.
4. Create demand and excitement.
Why do you think boxes are labeled “Limited Edition,” McDonald’s sell the McRib for a limited time only, or Amazon lists things as “only 3 left in stock”? It creates demand. It creates a desire in a consumer to act now and not wait to purchase something. And if they miss the run of that item, take their name and send them a message when you start a new run. I bet they will jump at the chance to be first in line next time.
5. You are an artist, not a manufacturer.
You are selling your art. Always remember that. An artist who paints has the luxury of making prints, and they can sell 200 of the same painting without having to touch the brush to the canvas a second time. We do not have that luxury. Our art comes from our fingers, whether it is the first hat or the 200th. When you mass produce your work, you go from being an artist to being a manufacturer. You are better than that. You are worth more than that. You are SO much more than a crochet machine.
Personally, I would rather have a little less business and a little more joy in what I’m doing. I will trade that possible income for being able to continue my business long term. I am not a machine. I choose to turn away that 11th order. And when I do, I remember that I am investing in my long term business by making sure I can still crochet in five years and enjoy it.
I can almost guarantee that if you keep making 125 Elsa hats every Fall, you may feel successful and busy for a short time, but your business will close its doors due to the complete nervous breakdown of its owner.
And trust me, you don’t want to get hauled off singing “Let It Go!” because you forced yourself to make one last Elsa hat to earn $8.
Kati is the designer behind Hooked by Kati. With thousands of patterns sold around the world, Kati prides herself in creating innovative, easy-to-follow amigurumi patterns. She has designed for several publications, including Crochet!, Crochet World, Simply Crochet, and I Like Crochet. Kati finds her inspiration in science fiction, video games, and numerous visits to the zoo — all passions she shares with her husband and two boys.