@OgLakyn tweeted this important lesson to small business owners. It starts with a story about a girl who wanted to sell sweaters. But the main takeaway here is; “Selling to people who do not value your work properly will not benefit you nor is it your responsibility to make the fruits of your labor accessible for everyone. You can’t run a business off vibes. Price yourself correctly.”
Source: @OgLakyn
(via: Vivat Novum)
$30 X 2,000 (i.e. unspecified “thousands” of orders, but at least two to qualify as plural) = $60,000. She could have afforded to hire help.
$30 was specifically stated as the cost of materials plus a few bucks. Hiring people to help, at over minimum wage, to find people that will do a good enough job. Profit per dress is a few bucks. Cost to hire someone is a more than a few bucks per hour, and probably also the cost of another sewing machine. If the people hired didn’t need to be qualified to do a good job, then all the people who placed orders could have done it themselves too.
You’re both ignoring the text in trying to make your point. The materials cost was $30, she sold them for $100. That isn’t ‘just a few dollars’. ‘Cost to hire someone is more than a few bucks per hour’, sometimes, it depends on if you pay per piece or by time. Per the #s stipulated of at least 2k orders at $70 over cost per order, she had $140k over cost to deal with. Theres a lot of help to be had with that. If she didn’t want to do it for that.. great, but its not some massive lesson or everyone.
“a few weeks ago I saw another girl”
The example of the girl who made clothes for 30 dollars is not the same as the one with the 100 dollar dress.
Two separate instances.. one was a dress being sold for $30 which was the cost of materials plus a few extra. The other was a sweater that she tried selling for $100/ea and found out she was losing money on each sweater.
I once worked as a grant writer and got to see how much money it costs to hire someone, which is substantially more than their salary. And I currently run my own business.
$60k? No, that’s not really enough to hire help.
You could pay someone minimum wage to work full time, that’s $15k/year, but you have to pay 1.25 to 2.5 times more money than that for benefits and the like, which brings it somewhere between $18,750 to $37,500. For the sake of ease, we’ll say 20k. Which leaves 40k for materials, equipment, taxes, license (you’ll want an LLC at the least otherwise you might end up paying a LOT more in legal fees), loss (returns, etc), shipping costs (oh my god, shipping costs… if we SUPER low-ball it at $5 per item, which it will undoubtedly cost many times more than, that’s 10k right there), packaging materials (again, you could be looking at another 10k), and all other business expenses…
you’re not earning any money yourself. your employee makes more than you and you are deep in the red.
Common lack of understanding about basic economic principles.
For the “girl on TikTok”, the ‘cost’ of the sweater was only the cost of materials because she chose to make it for herself during time she had available AND, luckily, she already had the skills and know-how to make it.
The value-cost of a for-sale sweater needs to include the equipment costs and a living-wage for the hours used to craft each sweater, because it is no longer a personal ‘volunteer’ act. The hours devoted to sweater-making are hours that the crafter is not working to provide for themselves.
Sadly, one of the reasons most fashion-ware is fabricated in dirt-poor locales is so that the designer/manufacturer only pays pennies per piece to the crafters (usually far less than the local living-wage) and then charges far more to their consumers — There’s a real reason why these designer companies are wealthy … it’s called ‘profiteering’.
I got one thing to say.
$300 dollar sweater?
Losing money charging only $100?
First-world problems
This is only a clever take it if you ignore that most clothes these days are made using slave labour.