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Recession-Friendly Business Tactics

Most businesses these days are seeing a dramatic decrease in sales due to the recession.  Most businesses I’ve been reading about are reporting approximately 30% decreases in this year’s sales over last, but one industry is actually growing: crafting.  According to the New York Times, this past holiday season sales of handcrafted goods and craft supplies were both up over last year.

One reason for the growth of crafting is obvious: saving money.  It costs much less to make your own gifts than to buy them from a retailer.  And on web sites like Etsy, you can often find handcrafted items for a steal because they are not marked up to cover the costs of middlemen.  People are also staying home more often, both because they can’t find work and because they are spending less money on going out.  This means more time to spend on crafting.

Another reason for the uptick in sales is that people are considering each purchase more carefully.  When customers have to be extra choosy about how they spend, they consider not just the upfront price of an item, but how long it will last, how safe and environmentally friendly it is, and whether it goes to support a local artisan (and therefore our own economy) or a large factory overseas.

Naturally, the largest increase in sales has been in craft supplies.  There are sales figures from Michael’s and JoAnn to back this up in the New York Times article, but it’s easy to see anecdotally as well.  One of the products I sell is a cross-stitch pattern for a “Meat is Sweet” sampler.  Normally I sell only one or two of these per craft fair, but at the last SF San Francisco Bazaar I sold out of the ten I had halfway through the day.  I also visited the Stitches West knitting expo last weekend and all of the yarn and supply booths were packed.  Jamie’s own Urban Fauna Studio had three people working their tiny booth but it was not enough to satisfy the throngs who were clamoring to buy.

According to Entrepreneur magazine, the most popular craft right now is sewing.  This makes perfect sense.  From what I can tell, most clothing (and accessories, and home decor items) currently available is extremely overpriced, poorly constructed and made in less than ideal labor conditions.  But with the help of the Internet, you can design your own fabric using services like Spoonflower, and then turn it into a dress, a bag or an apron using any one of millions of free online tutorials.

So how can you use these trends to help your own craft business?  Firstly, thank your customers for what good choices they’re making.  Tell them you appreciate their choice to buy a product that is made to last and that helps to stimulate our economy.  You can include this type of message in your newsletter or in a note you include with each shipment.  Throw in a special repeat-buyer’s-only coupon, too.

Secondly, give the people what they want.  Convert any designs you can into kits, patterns, and materials, especially sewing projects.  Offer one or two of these for free and promote the heck out of them.  Submit them to blogs like Craft Magazine, and bulletin boards like Craftster.  You’ll pull in lots of traffic for the free stuff and if people like what you offer, they’ll be back to buy others.

Third, create combo deals.  In tough economic times, folks love the Value Meal.  Offer a free pattern when you buy three, or make sets of products that are cheaper than three or four individual ones.

What are you doing to make the most of the recession?  Share your ideas and comments below.

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