Econ 202: International Business Super-Duper Simplified

I just answered an Etsy forum post (yes, the movers are coming in an hour) and realized it should be an Econ-for-Etsy blog entry. Also, I need to make all these Econ-for-Etsy things into a book and sell it. Oh, EtsyLabs! Storque! Where's my advance?

From the forum:

talkingbeads says: Message from U.K. seller
I have just listed a Handbag charm and have priced it at $6 including postage. Is this a good price. Too High or Too Low? Advice Please x

My response:

1) Find out the REAL cost of mailing your items to various locations. You can include handling, etc, though if it gets too high compared to the cost of your item itself you may want to shift and up the charm's cost some to absorb the shipping so people don't freak out when they go to the checkout. Convert to US$. US$ suck right now compared to the pound. Cringe a lot when you see this.

2) Ask "what's the most someone would be willing to pay for this charm?" Try to remove yourself and your attachment to it and just think like a buyer. Convert to US$. Cringe a lot again and realize you're best off selling to other UK people and buying off US sellers because, as previously mentioned, the pound is killing the dollar. So is the euro.

3) Market your brains out. Probably to others on your side of the Atlantic because your shipping will be cheaper and exchange rates won't make your prices seem high so you can actually charge more.


I'm only half joking. US tends not to sell much to Mexico, but the US gets flooded with Mexican goods because of exchange rates and the relative cost of labor, etc. You can make value judgments about free trade and such all you want, but for Etsy sellers, it is what it is and we'll do best if we can understand the market and deal with it accordingly.

For me, the cost of shipping to the EU/UK may or may not be worth it for buyers from those countries to purchase my products. It might be worth a promotional blitz, it might not. Offering cards in Spanish and making a major push for more American business south of the US is probably NOT worth it for me, since the shipping costs will be higher AND the exchange rates mean most people would be willing to pay less.

Isn't economics FUN???

No matter what country you are from, it's useful to keep in mind what other countries' goods are considered less expensive and where your currency has little value. People are more likely to buy from you if you are considered a "cheaper" country, but make sure shipping costs don't kill your prices. And if your currency is currently on top? Your fellow countrymen (and countrywomen) are more likely to pay top dollar for your products, so market locally and if somebody from elsewhere wants to pay for what you make, more power to them.


DISCLAIMER: This whole post is SUCH a generalization. There are perfectly fabulous ways to do business from any country, with any country. There are tons of complicating factors I'm not going into. But theses are some super-simplified basics to start. Feel free to yap about the various exceptions and other ideas in comments. Or ask questions. Or tell me I smell. I like comments.

The Price of Starting Over

Moving the big stuff via actual movers tomorrow. Spent weekend in Madison. Head is so far up butt right now you wouldn't believe it.

NiftyKnits wrote a lovely little pricing/econ post this morning in her blog. For people who replace things in their shops when they sell (felted booger-makers), she poses a great way of looking at the lowest price you should charge:

A complete stranger asks you to create an item (something you currently sell in your shop). That's not all, they want you to photograph, list and promote this item as well.
Whew! "Is that all?", you ask.
No, they have one more request: package that item, print a shipping label and drop it off at the post office. Now imagine they want you to do all this for the price you currently have this item listed for in your Etsy shop.
Would you do it happily? Would you grumble? Would you deny this task altogether?

Now, keep in mind this mental exercise doesn't really apply if you make things when the moment hits and don't change your production (ie don't make more) based on what sells. But if you do, then sweet mother of monkeys! hurry up and ask yourself the "how much would you have to pay me to do it again from scratch?" question and use that as the lowest price you're willing to charge for your item! You can charge as much more as people are willing to pay.

Econ topic for another day: start your pricing by looking at the final product and judging what buyers would be willing to pay. (There's more to it than that, so don't jump down my throat just yet.)

Merry Christmas.

Twitter Stuff

Twitter and I get along fine but aren't BFFs. It's useful for sending out links to fabulous things and good entertainment when I'm looking for totally new random things to stimulate my brain, or that strange extremely limited yet personal contact without the immediacy of a chatroom or the length and intimacy of a blog.

I like people who know how to use Twitter. It's much like Blogland in you can frequently tell who's comfortable with the medium and who's just on there and confused because the universe is currently tweeting its brains out and they think they should be in on the action.

But thanks to the "should," all these major and minor news outlets are now publishing direct Twitter addresses, making a quick marketing message to the right person at the right place an extremely easy way to work towards some great free press. I need to get my act together fast and start sending http://offthewallgreetings.etsy.com/ stuff to appropriate people at RedEye and a number of other venues. Unlike the ol' press release which was a bigger pain to both produce and read, just tweeting my shop with a potential story hook-line (still "making it" in Chicago during the bad economy) is much more likely to be seen and responded to. Happy writers and editors, happy me.

There are a number places now that are trying to make directories of Twitterers by things like topic and zip code. I tend to sign up for them when they come floating around my Twittersphere and then forget that they exist. I don't know about anybody else.

Latest thing to float my way: the TweeterGetter pyramid scheme. I signed up for that one, too. Sign up and automatically follow the last five people through whom you signed up (ie me, my friend I got hooked by, her friend, etc.). Then the idea is it gets sent on and keeps multiplying, like those chain letters with the post cards or stickers or recipes that I never got more than one or two back when I was little but frequently sent on anyway. I ignore the email versions and things involving money or Bernie Madoff.

Join my happy commune.

Shiny Room Things

I now have the greatest dining room in the greatest condo ever. Except it's empty and I want a different light fixture.

The ceiling is now gold (though you can see all the paint strokes...I've been looking around online and this seems a common problem with the Benjamin Moore Studio Finishes Metallics line. Ridiculous at over $25 a quart. I wonder if a sponge or other decorative finish would make it look less strokey). The room is pure drama and I've been dreaming about crystal chandeliers from the start. The store that had my gold paint (they were very nice at JC Licht...I should go back and ask them about the streaks) was near Antique Resources.

If I ever slip into a semi-permanent vegetative state, just park me inside Antique Resources. Hundreds of absolutely gorgeous crystal and bronze hand-carved antique works of art line the ceiling in a gallery of sparkly heaven. $13,800 will get you this 1900s empire style Dore bronze and crystal amazingness that's bigger than I am. You can't quite tell in the photo, but those are lions heads carved in the bronze.
Smaller and less expensive chandeliers are there, too, dipping down into my "under $500 so maybe I can long-term think about it" range, but I really want to wander into an estate sale or find an ad on Craigslist with something completely perfect and dirt cheap.

I've been playing around in Photoshop, trying out various chandeliers in the room. Yes, this is the best use of my time when I still have to pack.

Here's my dining room with the current light fixture:

and with a $1900 empire bronze and beaded crystal chandelier from Antique Resources:

It's waaay over my budget and not even right for the room, but you get the idea.

Then I started on window treatments. I'll talk about this more later I'm sure (long enough post already) but those kind of need to get priority over changing my chandelier. What I wanted in my head turns out to be Austrian or London fabric shades. So some more half-assed Photoshopping with not-quite-the-right-thing and voila!


If you're feeling creative, feel free to decorate my dining room. I even changed to creative commons licensing on my Flickr photo to allow for derivative works, so derive and conquer! Make it beautiful! Find even better chandeliers and the perfect fabric for the shades and the magical ability for me to sew said shades!

Show off your interior decorating talents! I'll post them in a later blog entry, and if I actually steal your idea I'll give you a permanent ad on my blog! Yay incentive!

Searching for Gold

I close on my condo tomorrow. I had a wonderful time choosing my paint colors once I came to the conclusion that it was my condo and I could do what I wanted and I really do have a good sense of color so my choices wouldn't be psycho or anything so I should trust myself and go for it.

Apparently, it's all done. All, except for the gold paint on the barrel vaulted ceiling of the dining room. The store didn't have the paint. The seller's Realtor called me, knowing I work from home, and asked if there was any way I could pick up two gallons of the gold paint from another Benjamin Moore store. This is such an extra thing for me to do, but if I want to walk into my condo post-closing with my keys in hand and see my awesome gold ceiling, this is the way. And I want to. Holy damn I want to. So I search for gold.

Econ in Action: Barterer's Dilema, HSN Pricing

A few days ago I was cruising the Etsy forums (much like cruising for chicks, yeah baby) and came across the following:

BirdTrouble says: A customer is saying they cant afford my bag but they really love it. I have it included with a cosmetic pouch for the total of $38. She's asking if she can buy the bag without the pouch.
I barly even included the pouch in that cost of the pouch in the price. Gahhhh I dont know what to do, I don't want to lose out on a customer but I dont wan't to sell myself short. What would you do?

PERFECT econ example! BirdTrouble was kind enough to be my economic explanation guinea pig, so here goes!

BirdTrouble makes her bags when inspiration hits, not when they sell or to fill orders or repeats of identical bags. From the forum thread:

I make when I feel like making. Pouches are easy, bags are fun. It really comes to me when Im walking my stinky dog into the door from a walk and I'm like OH MAN that fabric would look awesome with this, WHERE IS THE PAPER!!!!

This is not a bad thing. It's an artist thing and it brings us happiness and I do it all the time with many creative and some non-creative aspects of my own life. I'm not putting it down in any way.

That being said, it puts her in the fish swimsuit maker category from my past economic example posts (don't worry if you haven't read them). She already made both the bag and the cosmetics pouch. She can never get back the time and materials she spent on them. They are sunk costs. Now, anything she gets for the bag and pouch is better than the bag and pouch just sitting there, and the goal is to get the most money possible in the least amount of time she's willing to wait.

She's priced the set at $38 for both pieces. Her customer is offering her a lower price (I don't know how much it was, let's say $25?) for just the bag. Now BirdTrouble has to ask herself if it's worth $25 now with the possibility of selling the pouch later, or if she'd rather take the risk of holding onto the set for the chance to sell them together for the full $38. It's a game show:
"BirdTrouble, you have already won $25 from the magic Etsy fishing pond. You can keep that $25, or throw it back for a chance to win $38!"

So what did she choose?

Neither. At the advice of some clever forum responders, BirdTrouble offered her customer a layaway plan to buy the set at the full $38 but over time.

In retail stores, layaway plans are usually a terrible idea for the customer. They involve fees and/or interest and customers always end up paying more in the end for the privilege of waiting to pay it. But in Etsyland, we have the power to make our plans more customer-friendly. In this situation, if BirdTrouble makes the full cost truly the $38 in four monthly installments of $9.50, then even though her customer gets to hold on to the extra money and the few cents it may accumulate in a savings account over that time, BirdTrouble is still way better off than she would have been at $25 or if it had taken more than a few weeks for another customer to buy the set at the full $38.

Thing we can all learn from the story and/or Home Shopping Network: TWELVE MONTHLY INSTALLMENTS OF $19.99! are much easier to swallow than $240, particularly in this lovely current economy of ours. Try offering a pricing plan on some of your more expensive items. But if you don't have a collections agency at your disposal, consider not sending the product until it's paid in full. Just a thought.

Color Thought

Color by COLOURlovers

Far from perfect, but I was reading How Color Choices in Stores Can Influence Your Shopping Decisions (again, found through COLOURlovers.com) and I'm thinking I want a combination of light and dark greens accented with something bright in the yellow/orange/red area for subliminal messaging purposes (placating and wealthy but fun and active!) except just those colors looked ugly so I played with them until I got this thing which I could live with.

Other potential favorite:

Color by COLOURlovers

If I go with the yellow "optimism" concept instead:

Color by COLOURlovers

thoughts?

Also, I have an econ post coming as soon as I write it...must...write...it...