In a discussion on
Thornberry's blog asking why crafters do market stalls, one commenter asked if it's possible to make $1,000 profit a week doing craft markets. This inspired me to load up Excel and see what it would take.
$1,000 a week profit is $50,000 a year if you don't do a market in the weeks following Christmas and New Year, at which time most markets are closed. Nice!
For my product I'll use my own W Class Cushions. Let's assume that with wholesale material prices I spend $10 per cushion on materials, and sell them for $60, giving me a profit of $50 per cushion. (Ha! I don't make nearly that much profit, promise.)
The simple maths would be $1,000 per week by $50 profit per item = selling 20 cushions per market. Let's forget the fact they're cushions, substitute in any mass-appeal handmade product which would get a lot of customers at a high-profile weekly market. Selling 20 of your $50 profit items certainly sounds achievable!
But then we have to pay for the market stall. Because we aim to keep $1,000 profit, we have to sell additional products to cover the stall cost. Let's head for
The Esplanade Market in St Kilda. Very scenic, lots of tourists, runs weekly. It has the standard caveat that all items on the stall must be made by the stallholder. The stall fee is $500 for three months, or around $40 a week. Wow, that's much cheaper than I thought! We only have to sell one more product to cover our stall fee. We're up to selling 21 each week.
What about our overheads? Let's assume we work from home and have paid it off, so we don't have any pesky business rent charges. We'll want to claim 10% off our household electricity bill as a business expense, otherwise why would we work from home? Let's call that $2 a week. Because we make over $50,000 a year we are required to be registered for GST, and as we're busy handmaking all our stuff we'll pay a professional to take care of our BAS and bookkeeping. We'll budget $25 a week for that, which may be a gross underestimation. Then we've got premiums on our
public liability insurance, $110 for three months or $8 a week, plus general business insurance - another $10 a week perhaps? These basic overheads add up to $45 a week, or one more product. We're up to 22.
Because we're selling our products at a high-exposure market, we spent months working on our innovative design and it's our livelihood, we want to get trademarks and register our design. The
trademake on our business name costs $450 for ten years, which breaks down to only a dollar a week.
Registering a patent for our product costs $230 for the first year, or around $5 a week. So there's another $6. Not enough to worry about, really.
Of course we need to keep our manufacturing equipment in top condition, because if something breaks down and takes a week to fix, we'll lose a week's production time and won't be able to do our market that week. Say we're getting a sewing machine serviced every three months for $70 each time, or $6 a week, and our overlocker once a year also for $70, or more than $1 a week. That's $7. We'll add that to the $6 cost of trademarks and patents, making $13. So we're happy with a sales goal of 22 items per week.
Anyone call sell twenty two products at a busy market!
But how long has it taken us to make these 22 products which are worthy of $50 worth of skill, time and originality? I believe a standard amount placed on crafting time (in needlecraft anyway) is $20 an hour. So it's reasonable to assume you spend 2.5 hours on each of these products. Two and a half hours to make 23 products equals 55 hours of crafting time each week. Add on the seven hours a week you spend on your stall, plus an hour's setting up and half an hour's travel time each way, and you're working 64 hours a week to earn your $1,000 profit. On top of market day that's 11 hours per day if you work weekdays, or 9 and a bit hours a day if you work Saturdays as well. Working nine hours a day, seven days a week, 50 weeks a year seems like a tough way to earn $1,000.
We could outsource some of our making to a homeworker, although this isn't allowed by the market's rules. Let's pay them less because, even though they can produce the same high-quality work that deserves a $50 profit margin, they didn't come up with the design. We'll pay them $15 an hour (even though they'd make more working on a supermarket checkout). To lighten our load to seven hours a weekday (we need a lunchbreak) we'll get them to work 22.5 hours per week, making nine items while we make the other 14. But suddenly we're not making a personal profit of $1,000, because $337.50 is going to them. We need to make enough to cover our homeworker's wages. We can increase our markup by 33%, if we think people will willingly pay $76.50 for our item instead of $60. We could increase our homeworker's hours to 35 hours a week, the same as ours, paying them $525, selling the 28 products we make between us and increasing the markup slightly to $58 per item, or $68 ticket price. That works!
| Personal income | $1,000 |
|
|
| Expenses |
|
| Market stall | $40 |
| Electricity | $2 |
| Accountant | $25 |
| Public liability insurance | $8 |
| Business insurance | $10 |
| Trademark | $1 |
| Patent | $5 |
| Equipment maintenance | $7 |
| $98 |
|
|
| Profit required | $1,098 |
|
|
| Items at $50 markup | 22 |
|
|
| Hours required @ 2.5 per item | 55 |
|
|
|
|
| Items made in 35 hour week | 14 |
|
|
| Homeworker @ $15 per hour | $525 |
|
|
| Profit required | $1,623 |
|
|
| Markup required for 28 items | $58 |
So yes, we can make $1,000 from our handmade craft market stall. But only if we break the rules by outsourcing half the work, spend 35 hours a week reproducing the same product ad nauseum, and - I'm making a leap here - killing the joy we used to get from our lovingly crafted products.
Perhaps you've got a product that has a much larger profit margin, or only takes 20 minutes to make, or is guaranteed to sell one a week for $1,623 each. But my gut feeling is that if you want to take home $1,000 a week, it's time to hang up your scissors and get a day job.
Further notes...I meant to point out that our $1,000 a week income does not come with superannuation. You'll need to put 9% of your income into your super account to keep up with what you'd receive as an employee.
And if you don't live in a paid-off house, you'll want to cover a percentage of your mortgage or rent using your business income. Which means making and selling more items - another homeworker might be required.
I'd also be interested to know what a self-employed jeweller, painter or other non-needlecrafter values themselves at per hour. Are there any crafts that could earn $1,000 a week working less than 40 hours, not including market day?
Since my meeting with Craft Victoria on Thursday I've been set on the idea of changing my business name. Cravings Frocks was a fab idea when I was making maternity dresses, but it bears no relevance to what I'm doing now.
or style N38 from Namemakers 
? I'm thinking of a navy background with white lettering, probably. Feel free to dissuade me.
