5 Observations about Makers, Product Businesses, and Wholesale in a COVID World
A quick note that this post was written in early July 2020. As things continue to evolve, we’ll continue to write and share our observations with you.
As a country, we’ll be experiencing the effects (and after-effects) of COVID for a long time to come. Most of us have faced severe upheaval to our lives, businesses, and income and that isn’t changing anytime soon. Further, many of us are engaged in a reckoning around race, police, and our vision for our communities in the US. If you are struggling to balance a reinvention of your work alongside caregiving or 24-hour-a-day parenting or attending to the deep hurt in the world and in yourself, you are not alone.
It’s hard to be a business owner right now -- but I fervently believe that what you are doing matters. When you start and grow a creative business, you are stepping out of the status quo and the limitations around you and creating a new way of being and working. This is world-changing work, in a very literal way. When one small business succeeds, especially a creative, handmade, art-driven business, it has ripple effects to those you hire, those you source from, those you sell to, those you partner with, and your families.
Although things are not “back to normal”, many of the makers we work with are settling into a plan for the next several months. That’s crucial. That said, it can be hard to plan when you are not sure what broader dynamics exist outside of your community, your state or even, in a time of social distancing, your own home. We have the benefit of working in-depth with hundreds of makers and store owners around the country, which gives us insight into what folks are facing. You, in turn, can use that to inform your plans for the coming months. So today we’re sharing a few observations about where things stand in the maker community.
5 Observations about Makers, Product Businesses, and Wholesale in a COVID World:
This community of makers is strong, important, and growing -- even as revenue is unpredictable. It’s true that there are business-threatening challenges for both stores and makers right now. Makers have been hit really hard -- we estimate that our makers are experiencing an average income decrease of 60-90%. Despite that financial reality, as a community, you are not throwing up your hands -- you are digging in. Makers are adapting their approaches, tightening their already-tight budgets, and shifting their approaches. When COVID hit the US, people asked me whether makers would close their businesses. And I’m finding that except in some extreme situations, the answer is no.
Success is unequally distributed. Yes, folks who make things that are relevant for stay-at-home orders (care packages, puzzles, craft kits, etc) are doing well -- but it’s not just them. We’re finding that there is a group of makers who create exciting, interesting, beautifully photographed lines that are doing as well as ever. We’re also seeing makers of very affordable items thriving as consumers tighten their budgets. Of course, some makers with extraordinary products and storytelling are struggling to sell in this market -- through no fault of their own. But we still want to highlight the opportunities that exist within the challenges.
Stores are facing very real, existential, challenges. It’s a scary time to own a store. Some retailers have been able to quickly shift to a model that is at least partly online. But others have had to be closed for an impractically long time, had challenges that kept them from transitioning to online models, and had cash challenges going into COVID. Many stores have very little savings and a lot of debt. That makes it hard to find or create the resilience necessary to survive this time -- and as a result, we’re seeing some gorgeous, well-respected stores close their doors for good. Others, of course, are making it through, but big hits to their sales. These challenges will likely continue through at least mid-2021 or 2022. And that doesn’t mean that stores won’t be buying products from makers -- but it does mean that they’ll be doing so judiciously, with an eye on what will sell well right now, and prioritizing lines that do well in an online context.
Our community is searching for better ways to advance diversity, equity, and inclusion. Not everyone is in a time of reckoning with race, diversity, and inclusion. But many people in this handmade product space are. Some stores are opting into the 15% Pledge. Others are doing a lot of internal work and inquiry. We are seeing a lot of attention -- and we do expect it to be sustained -- around buying from and highlighting BIPOC makers.
Online teaching, community-building, and storytelling are more important than ever. Every single maker we talk to is interested in developing what they tend to call “online marketing.” The reality is that online marketing is a huge field that has dozens of aspects, only some of which will be applicable to a given maker. So in some ways, this is a distracting and confusing way to think about your path forward. But the reality that teaching online, building connections with your community outside of craft markets, and improving your storytelling across all channels -- these are things that will continue to grow in importance.
So what are you to do with this information? Each business owner and maker has to chart their own course moving forward. Your best strategy will depend on your goals, your geographic location, your unique strengths, and your specific experience of what is growing and what is shrinking right now. Hopefully, the above observations can give you a bit of context for those decisions -- and assure you that you’re not crazy if you’re finding things quite topsy turvy right now.
We’ll also share an article next week on what to do about doing outreach to potential wholesale customers right now. So if you’re looking for more practical guidance, keep an eye out for that.