Build Your Own Creative Business: Trim Your Expenses {Day 5}

Welcome back to the Build Your Own Creative Business 31 Day Series! This is {Day 5} of the program (click here to catch up from Day 1), and today I’m talking about how to avoid some costly mistakes and trim your business expenses.

One of the most common errors a new creative start-up makes is to buy shipping supplies or other business needs individually at a local store, rather than from an online wholesale supplier. Here are few tips on how to cut those costs and increase your profit!

Buy in Bulk

Take inventory of your current business supplies and identify which of those materials are used regularly that could be purchased in bulk or wholesale.

It’s been a long time since I’ve priced a kraft bubble envelope (size 6) in-store, but let’s just say they’re roughly $1.26 a piece. I’m going to use PaperMart.com for my wholesale price comparison, as it’s one of my favorite online suppliers. You can also do a quick google search for wholesale package suppliers to compare prices and availability.

If I buy in bulk, I can get the same envelopes for $.30 a piece, saving me a whopping $.96 per order. At a glance, I know that it looks like we’re just talking about quarters and dimes … but quarters and dimes quickly add up.

After 10 orders, the store-bought envelopes cost me $9.60 more. After 100 orders, the store-bought envelopes cost me $96 more!

To buy the box of envelopes wholesale, you have to pay a few hundred dollars up front. I know this is an investment, as is any bulk supply purchase. However and after you’ve reached a few sales, it’s absolutely time to ask yourself if this business is something you’re willing to invest in! I try to keep my shipping supplies (envelopes, boxing, wrap, labels, and business cards) under $1 per order, and to do so, I have to order several hundred dollars worth of materials up front. But it does pay-off in the long run.

Do the same with the products you carry in your online storefront. Sellers often love the idea of selling one of a kind items (which they often abbreviate as “OOAK” in their listings), but I almost always question that business strategy when critiquing a new client’s shop full of OOAK items.

I’m not sure that people care if there’s only one or five made of any given item, but I’m absolutely positive that it’s cheaper to make and sell five than it is to make and sell one. And I can almost guarantee that if you’re making one of a kind, you’re not charging enough to make the sale worth your time and effort.

When NOT to buy in bulk

I’ve made the reverse error of this mistake by purchasing wholesale quantity for a new design that I’m not sure I am going to regularly create, and I’m even less sure if the customer will be interested in purchasing it. The advice to “buy bulk” starts at 10: once you’ve sold ten items in a consecutive short number of weeks, then it’s time to think long-term and go wholesale.

Now that most of my supplies are purchased at wholesale prices, I’m able to keep my product and shipping costs competitive and low. In fact, I love when I’m able to order enough supplies to make 10 of a popular new design, which allows me to carry inventory that continues to profit.

And there you have it for day 5 of the 31-day series. Continue on to {Day 6} where we’ll discuss pricing your product. All the best!

***As promised and in honor of the 31 days to Build Your Own Creative Business Series, I’m offering my complete business-boosting e-program, Shop Fundamentals ($57) for $31 while it runs! Click here to learn more.***