Why this is a hard time of year to run a small shop...

Below is a portion of my weekly email from 13 June, I wanted to share it about how this time of year is hard for small and ethical businesses.
 
I just wanted to start today's email by telling you something about running this business. So, I wanted to share that this time of year can be/is really hard to run a small shop, and particularly one that stocks only ethical items. The reason for this is this time of year is the big end of financial year sale season, so you'll see now that the big chain stores and department stores are all having huge sales. Also, some small shops will have big sales too, and I wanted to explain why we, and businesses like ours, are different, and I'm going to be really transparent about it.

An oversharing story! 

So at Brown's we stock local, ethical and handmade goods. This means that I know exactly where every item I have in store comes from, I know who made it (often I personally know the maker) or how it was made and in what conditions. With the ethical label though comes an extra cost, if you buy ethical and handmade you will often pay more, and I pay more too. 

My mark up at Brown's sits between about 30% to a maximum of 100%, meaning I buy a ceramic mug from one of my beautiful, talented potters for $31 and I then on sell that in my store for $45, meaning of the $45 price the maker earns 70% and I earn 30%. this might increase to a 50/50 split on fashion, but that will be my highest mark up (i.e. I buy a dress for $75 from my maker and sell it for $150). Now when you look at these figures on their own it sounds like I earn a lot from each item, but with that profit margin I need to pay rent, pay tax on stock, pay staff, pay electricity, pay website fees, pay for bags, tissue paper, stickers, business cards, packaging, and hopefully if there is anything leftover pay myself something. 

The difference is that in the chain stores/department stores and sometimes in small shops that carry mass produced brands (not the ethical or small scale labels that we and other small shops often stock) their mark up is much bigger, sometimes 200 to 500%, therefore they are buying a mug for $10 and selling it for $30 or a dress for $30 and selling it for $120. 

I am telling you this not to be negative about those businesses, but to explain the difference, and to explain why these businesses can then have 40% off sales or more and it is affordable for them to do this. And this is why businesses like Brown's do little discounts and offers, and can put some things on sale but not offer the larger discounts as it just results in major financial losses for us.

Anyway, that was a longwinded start to the email, but I just think it's important to communicate these things as a small business because this is a tough (wonderful, but tough) gig and sometimes it can feel really difficult at this time of year because of the sale culture that exists and I want to explain the situation to our community. 

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