Market Research Crafts

Liza Schmitt

This in-depth article explains how to do market research to establish what the market is for your crafts, who your customers and competitors are, and the industry design trends to follow.

So, you want to sell your handmade crafts?
Begin with thorough market research to establish the craft industry related info you'll need to know to get going.

Your market research is going to be about finding out:

who buys products similar to yours (your customers);
who makes products similar to yours (your competitors);
what particular styles and types are popular (trends); and
an idea of what the market related prices are.

The internet is going to become one of your best friends during this exercise – it's like a giant library with virtually unlimited access to all the information you need!

Who Buys Products Similar To Yours?

According to The Greeting Card Assocation, Americans alone "purchase nearly 7 billion greeting cards every year"! "Cards range in price from 38 cents to $10, with the average card retailing for $2 - $4. Cards featuring special techniques and intricate designs are at the top of this price scale."

If you're selling handmade greeting cards or a craft which is popularly bought as gifts, you're basically entering the stationery and gifting market, so a better question here would probably be: who doesn't buy products similar to yours?! Do you know anybody who never buys cards or gifts for friends and family at various special occasions during the year? The GCA's research indicates that "the average person receives more than 20 cards per year, about one-third of which are birthday cards."

"The most popular card-sending holiday is Christmas, which accounts for more than 60 percent of all individual seasonal cards sold. The next most popular holidays in order are Valentine's Day, Mother's Day, Easter and Father's Day. The most popular recipients of seasonal cards are parents, who receive about one out of every five seasonal cards."

"The most popular everyday card is the birthday card, which accounts for 60 percent of all individual everyday cards sold. The next most popular everyday cards in order are anniversary, get well, friendship and sympathy.

The most popular recipients of everyday cards are friends, who receive about one out of every three everyday cards."

Although the above info is about greeting cards, remember that gifts usually go along with cards…!

What we're talking about here is the consumer – people like you and I who purchase these and other types of goods from (mainly) retailers. So what really needs to be established is how to get your crafts into their stores!

You can sell either to wholesalers or agents who then sell on to retailers, or you can sell to the retailers direct, or both. This is determined either by your particular choice and/or how good your sales and marketing is – for example, you might choose to sell to retailers directly, but if your sales and marketing is not done properly you might not get your foot in the door, so the next best option would be to work through wholesalers and/or agents who are already established as suppliers to some of the major retailers, and they can market your products for you.

Selling to retailers is clearly the best route, because you cut out the "middle man" and you therefore make more profit on your products (a step up from this would be to sell your own products in your own retail store!). When you sell to a wholesaler, your price will have to be lower than that which you sell to a retailer at, so that your cards can maintain a market related retail price. When you're working through an agent, some will work similarly to wholesalers and buy your products direct from you at a set price, others will market your products at your price, but will take a commission from the value of the orders they get.

Your research is going to involve finding all these people and compiling your first Contact List for when you're ready to get stuck into your sales and marketing. Yet another aspect to consider at this point is: local, national or international?

I personally recommend starting with your smaller local market. As the saying goes, you have to learn to 'walk before you can run'. Starting small has a number of benefits, especially if you are new to becoming a business owner and inexperienced in all the aspects that are involved in it.

The experience you gain by starting small will be invaluable when your business does grow to the national and possibly international markets. You'll gain a better understanding of all the processes of your business by working hands-on, and you'll also build a lot of confidence, especially in areas in which you don't feel yourself to be particularly strong at this point in time. To use another cliche: 'practice makes perfect'!

Who Makes Products Similar To Yours?

The answer is: a lot of people! But don't let that thought daunt you – remember there's a huge market out there and it is possible for you to get a share of it!

Think of just about any product or service available, then have a look in your local Yellow Pages and see how many people or companies offer the same thing. However, they don't all do it in exactly the same way, and that's what sets them apart from each other and, in most cases, that's what also determines the level of their success.

What you really want to establish in this part of your research is:

Who your competitors are.
They will probably be a combination of small and medium businesses and larger organizations. You want to concentrate on the smaller guys, to see:

What they're doing, and how they're doing it.
Have a look at their products, their marketing, and their prices, and try to establish how successful they are with their concepts – this is also done by finding out who they supply.

If the small guys have their crafts in the big stores, it's great news for you! And therefore especially important for you to pay attention to their styles and methods.

You may not always be able to find out who they supply, but most small companies are very proud of their accomplishments and will probably mention a client list somewhere as a point of reference.

Some of these companies might also be or act as wholesalers or agents, so instead of being your competition, they might have the potential of becoming your customers.

When you're out shopping, go past the greeting aisles where items similar to yours are stocked and have a look at what's on offer – turn the products over and see if there are any website addresses or other contact details for you to get more information from, then look them up. Keep your eyes open for what's in the stores at all times.

At every opportunity, let people know what business you're in – you never know what information you may come across, or what opportunities may become available to you.

What Particular Styles And Types Are Popular?

Trends obviously change all the time, so this is something that you'll have to research on an ongoing basis – what's hot, hip and happening!

Retail stores are a good place to assess this – they usually pay exorbitant amounts of money to research and get information on the next season's colors, designs and styles, so just follow the trends.

Of course, once you're established as a retail supplier you'll also be privy to this information, because the buyers will give you briefs of what they want you to produce to fit in with their next season.

For now, however, you need to see what's selling so that you can create your products to fit in with that – it may be along the lines of ethnic, floral, marine, natural, or any of a number of other themes, styles or color combinations.

Another good source for this type of information is your own suppliers. Most of the major craft product suppliers also follow the trends and come up with new products to fit in with the seasonal styles, so check out the websites of some international suppliers too.

This probably all sounds a lot easier than it actually is, because once you start looking around you'll see lots of different styles, and it might be difficult to pinpoint the few which are actually the determining factors.

I've found that apart from the above, one of the best places to look is the top retail clothing stores, and those selling soft furnishings and home decor. Walk through your local mall, and look at each of these stores from the outside – you will see a dominant theme prevailing.

But this won't necessarily give you all the info you need, because these are for the current season only, and most stores (excluding some of the smaller, owner-run ones) have already planned their purchases for that season and budgeted for them, which leaves no room for you.

To get ahead, you need to know what the styles are going to be for the next season, so that you can submit your designs in time to be included in the buyers' budgets. Your local fashion and home décor magazines are the answer. They've always got the styles for winter, before winter, and so on.

While you're doing your research, try to uncover a need in the market for a product that sells well but is not offered by many manufacturers or suppliers, possibly because it's too labor intensive for some of the bigger companies to produce, which could be an advantage for you.

For starters, I'd recommend going with what's currently popular, because your suppliers are geared for that (going with something different can become expensive to make if nobody else is doing it) but always be on the lookout for new opportunities for product development.

Also, chat to friends and family to find out:
what they're buying;
why they buy it;
where they buy it; and
what they're prepared to pay for it.

This might seem like a tedious and/or daunting task, but it's important to get it right – good luck and have fun!

For more free craft business info and resources, visit [Craft Business Home.com] (link: http://www.craftbusinesshome.com/morearticles ) - the free guide on how to turn your craft into a profitable home business!

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