September 22, 2022 12:10 pm
We see and hear the acronym “DIY” everywhere, and you probably already know that it stands for “do it yourself”. It’s a straightforward concept. But “DIY” can hold a different meaning for different people because it can be about so many things.
Basically, DIY means that, instead of hiring a professional to do a particular task or, instead of buying goods from a store or an artisan, you’re choosing to do that task or create those products yourself with no direct help from an expert. But that means that you need to turn to resources for help – you can use an online tutorial, or a book or blog post to find directions to get your project on the right track and you also need supplies to create your crafts.
We’ll talk about the crafting part today and how it can be profitable for everyone involved in its supply chain.
A profitable craft category is one that tends to have lower production costs. The materials to make the products in a particular category don’t cost a lot and they aren’t time-consuming to make. Due to their typically lower costs, the following categories of crafts tend to have higher profit margins:
Also, there are industries that tend to be profitable because there is always demand. There will always be people getting married, having kids, moving into homes, taking care of pets, etc. So it creates a continuous flow of clients. These industries are:
Let’s take a closer look at how combining a high profit margin craft with a profitable category can be moneymaking for everyone involved in the supply chain.
Let’s take Soap & Candles for Weddings & Movies.
Liquidator –> retailer
The base for these products is the mold. The retailer purchases a batch of 1000 molds from ARLL at a very good price – let’s say 2 eur/piece including transportation. It then sells 100 molds each to 10 craft makers with 7 eur/piece, meaning instant profit of 5000 eur just for the molds.
Retailer –> craft maker
Then each of the craft maker goes on to make their candles by purchasing the wax and wicks to use with the molds. When time is taken to source ingredients and find the best price, and those ingredients are purchased in bulk, material costs for a candle can be kept very low. They can use the molds for years and the ingredient prices (wax and wicks) are very low, so they can reach a fixed cost per candle of 0.5 eur. As for labor costs, the process of candle making is usually completed in batches. Creating a fast assembly line process cuts down labor time for the craft maker.
Craft maker –> end client
The craft maker will sell 3000 (300 x 10 weddings) candles as wedding party favors at the price of 2 eur/piece, which means they can make a profit of up to 4500 eur/season.
When you look at how much consumers typically pay for a candle, selling handmade candles can seem like an unprofitable category. But when taking the time to create unique products and be very mindful of the cost, everybody in this supply chain wins.
We’re here to help you navigate your business towards the most profitable products and categories. To learn more and receive a personalized offer, please contact our sales team.