Tuesday, November 29, 2011

Restock Contemplations

We're 2 years into The Great Recession, and we can definitely feel it getting deeper and stronger here in Canada. The holiday season is just not what it used to be. I live in the midst of Vancouver's most packed shopping district (Robson street), which is normally where everyone shops till they drop till at least 9pm at this time of the year. The shops are open late, but the streets are empty. I'm not seeing people with shopping bags either, and whenever I step into a shop I get so much attention it's almost overwhelming. When I go to the post office (and I'm thankful I still need to go there at least once a week), there is no lineup, ever; and I hear that it was no different the rest of the day. It's just me, and maybe a couple of folks picking up an early Christmas gift in the mail from Europe or Asia. That's about it.

Of course, in many ways, this could be great news: less consumerism, less waste, and more focus on the real values of the winter holidays (whichever ones you celebrate, they pretty much were invented for the same reason - the decline of light and the cold weather). The winter holidays were all about getting people together to support each other in the coldest and darkest days of the year, and only recently we got too greedy and it turned to be about things, not about people, and shopping has gone way out of control. The lineups you'd see on Robson street on Boxing Day were a frightening sight. I'm curious to watch and see if they'll be anything close this year.

In other ways, it's just not doing it for small businesses. People get what they need where and when it's cheap. Discount sites, which slash the retail price by at least half, and than give only half of what the customer pays to the business providing the services or goods, are becoming the norm. "Deals" are not enough anymore. People won't buy unless it's a "steal". And yes, it sorta is, if the business giving didn't calculate their offer very carefully.

As a small business owner, who gets most of my supplies in smaller quantities (read: not quite at a wholesale rate), this situation is becoming risky and dangerous. Slashing the price in half is ok, but slashing it into 4 is as good as committing business suicide on the spot. I always did my very best to keep the prices reasonable for my customers. If I were to set my prices more realistically, they would probably be at least double of what they are listed for at the present moment. And only very few people could afford them. The profit margin based on the prices you see on my website are allowing it to be sold wholesale, but there is no room for any other middlemen Keep in mind that distributors usually take at least 30% of the wholesale price. If I were to go this route, at the present prices I offer on my website, that would leave me with nothing to run the business, let alone pay myself for doing all the work. Unless, of course, I were to charge a lot more for my products.

With all that being said, obviously a business person has to reinvent itself if it wants to survive. I'm not really sure if I'm a business woman anymore, because a lot of the decisions I've made in the past seem utterly unrealistic now. For example - giving customers all the choices (about 50 fragrances in the line), and all the ancillary products, which take a lot of work and required a lot of effort for creating their own packaging. Suddenly, having all these scents does not seem necessary anymore. And if a product hasn't sold for relatively long time, I'm simply not going to create it again. So I'm anticipating some major re-structuring of my current line, and truly discontinuing scents that haven't been too popular, even if I think they are one of my masterpieces. I just don't have the resources (space, time and money) for producing them for the 3 and a half folks that love them. And it's not that I don't care about you and don't want you to smell good and have your favourite scent theoretically, at some point in the future when you want to re-stock - but that means me buying some materials especially and only for this particular perfume. And that I cannot do unless there is enough demand for it. It's the harsh reality.

So there are a few things that are going to have to go, and they will once this holiday season is over. The body products will be the first to go. As much as everyone were begging for them, and thought (or at least said) they are great, and loved them when they first came out - I'm not seeing this translate into the shelves clearing fast enough to justify the production. Not to mention having large jars of them taking up my storage space, not to mention carting them to the many trunk shows and Christmas fairs I'm doing this season. I'll keep making them for myself, because nothing makes me happier than my own concoction of sugar scrubs and soaking in a fragrant salt bath with the very scent I've always dreamed of bathing in. But they will remain something I do for myself and my friends only, not for any commercial volumes.

On another positive note, I'm hoping that my new teas will be as well received in the future as they have been these past 2 weekends. The Zangvil tea is all my own original recipe and is packaged in the new tea packaging, which is a 50gr size (but will be different weights for each tea). I've already blended a small batch of 4 tins of Charisma and it weighs 150gr per tin. It is lovely and although the small tins are sold out and Charisma tea is not on the website any longer - it will be shortly - once I've got some photographs taken of the new packaging.


At November 29, 2011 11:18 AM, Anonymous Monica said...

Thank you Ayala for your honest and thoughtful sharing of your evaluation.

At November 29, 2011 12:03 PM, Anonymous Margi Macdonald said...

this is such an important post, as it tells the story of so many passionate and talented artisans, creative folk and micro-business owners.
As customers, we rarely think about the fiscal nitty-gritty and tough decisions that are behind a great product line and great service.
Wishing you a joyous and profitable holiday season!


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