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My Journey As A Scroll Saw Pattern Designer #798: We're Still Standing

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Blog entry by Sheila Landry (scrollgirl) posted 08-23-2012 11:19 AM 1192 reads 0 times favorited 12 comments Add to Favorites Watch
« Part 797: Business Decisions Part 798 of My Journey As A Scroll Saw Pattern Designer series Part 799: Cutting Again Today »

The past 24 hours were not the most pleasant for Keith and I by any means. They were filled with anxiety and stress and negotiations and many of the things that I try so hard to avoid. But being a growing business, we all know that it isn’t possible. These things are all part of the process, and since they aren’t avoidable, we banded together and met them head on as a team and as a result, we think we came out of it alright.

Part of me feels like I have been through a war. Perhaps that is over reacting just a bit, but some of the decisions that were made yesterday would impact our business and our lives for a long time. Not only that, but it would also dictate how we were viewed by the other company and certainly affect the level of respect that they would have towards us. It was as if they were testing us to see just how far they could push us, and we didn’t like the feeling at all.

It has to do with some production work that we are doing. We have been involved in this for over a year now and so far, it has gone well. While we know that eventually we won’t be able to do much production work ourselves if we are to truly grow into a larger business, at this time we can’t afford a laser cutter or equipment needed to expand in this direction and have to cut our kits and pieces by hand.

Now this isn’t a huge problem for us, as we are focused and can get the job done quickly (a couple of months ago we cut 6000 pieces in six days) but as things get busier, we need to carefully watch how much we submit to companies that would require this labor-intensive process so that we don’t overextend ourselves and are not able to meet the demands that may be put upon us. It is somewhat of a tightrope act, as you can imagine.

“Why do we do it at all?” you may ask.

We do it because at this point in our business life, we need to have the extra income to help keep us sustained and even growing. The spring and summer is traditionally a slow month for scroll saw patterns, and with the heat and the poor economy, it is even slower. Designers around us are all suffering from these circumstances and we have seen so many of them have to fold up shop because they can’t afford to stay in business. These side jobs – labor intensive as they are – help tremendously in getting us through these dry periods and still keep our income coming in so that we are able to function and grow. That is very important.

So things were going along quite nicely and our kits were selling very well and we were keeping up nicely with the orders. I recently submitted just one kit for consideration because I didn’t want to over-burden us during the busy fall and winter seasons, yet I still wanted a presence in the catalog with a new product. The new item was accepted and all was well – so we thought.

In setting up the initial order, it was mentioned that the company decided that they wanted to outsource the wooden pieces to be cut by their own wood cutters. This didn’t sit well with us because the actual cutting of the wood was one of our main reasons for doing this. The profit per kit was small, but Keith and I could cut as quickly as a laser cutter, and as accurate and for the time being we wanted this part of the job to remain with us. Also, they were asking that I sign the rights over so that they could do the outsourcing and sell the pieces themselves – with NO profits at all to come to me. They would only pay me a percentage for the pattern. and any income from the wood pieces would go to them.

This would not do.

I must take part of the blame myself for perhaps encouraging this idea. Each time I talked to them to negotiate terms, they naturally were pushing to cut the pieces themselves and outsource them. Each time in the past I have told them that I did not want to – not even asking or knowing the terms – because I knew that would take away a major part of the profit for our company. Initially, I adjust our price to them so that we would be competitive with their wood cutters and we would still be able to make a profit that would make it worth our while. For a bit, everyone was happy.

But as these kits continued to sell well, it seemed that they were pushing more and more for me to allow them to cut. On the last big order, there was a glitch at Customs because the shipment was valued over $2000, which threw it into a new category at the Customs office and it required additional attention to be cleared. It was held up for almost a week, and the agent actually told us to avoid this in the future, just make sure the shipments did not exceed the $2000 value mark. Easy enough to do.

But it seems that the company took advantage of that to fuel their argument that they wanted to do things on their side, and only wanted the patterns from us without the pieces (at a very small profit – less by far than we give ANY of our distributors) and they would have all the rights to market and sell as much of the wood as they wished, without giving us any profit at all. They presented us with a couple of different ways that they did things – all which cut us out of the picture almost completely. One scenario included forfeiting the rights altogether for 90 days (from the catalog ship date) for a flat fee, which was smaller than I get for a magazine article, and they would be able to market everything and even allow free downloads of my pattern on their site. That made no sense at all to me because even when the rights did come back to me, which would of course be after the season passed, who in their right mind would ever want to BUY the pattern from me that had been available for free?

The funny thing about it was that the current terms we were on were terms that THEY set up only a couple of months ago. It wasn’t as if we were asking for MORE. We had compromised a bit back then, as we weighed the above mentioned facts and still felt that it was worth our while to do, but with these new terms, we just didn’t see it being to our benefit, and were willing to walk away.

After much back and forth, we finally told them that we needed to keep things as they were or we wouldn’t be able to continue. This is still good for us, but as I said yesterday – giving any more would sour the deal for us and make it not worth our time and effort. It was difficult to take a stand like that, but necessary for the health of our business.

When we presented them with these terms, they realized that at least for the items already in the catalog they would need to honor them. They placed a large order, but told us that they were not sure that they would take the new item (on the terms that they had set only days before). We told them that was fine and would do the order for the previous kits in the same timely manner we have been doing them. They said they would get back to us on the new item when they decided.

I don’t know if they thought at that point we would compromise, thinking we were ‘losing their business’ but we held firm. I wasn’t sure if they would take it or not, as the other things were selling well and they knew that they would be walking away from a good product. They were making a substantial amount on what they already carried from us, and to me it would have been their loss, as I would find another way to market them to another source.

A couple hours later, we received an order for 150 kits of the new item (this was in addition to the order placed earlier) I suppose they decided that we were worth it after all.

While I am happy about the outcome, I look at the company through different eyes. From their point of view, they are trying to make the most money they can. I had the delusion that these business relationships that I have with these companies are somewhat ‘friendships’ and I imagine that yesterday was the day that the lights came on for me and I figured out how wrong I am.

Perhaps working with Creative Woodworks Magazine for over 15 years has trained me to think that way. They are a family owned business and many there ARE my friends as well as my business colleagues. There is a human factor with that company that doesn’t exist in business. But as this little bird is leaving the nest and working more with companies from all over the world, I am realizing that there is no such thing as what I have come to know with Creative Woodworks and All American Crafts (the parent company of CWW) Oh! How I am growing up!

To end this (LONG) post – I will say that all is well. Keith and I are revving up our scroll saw saws and we plan to ship this order out by Tuesday (and that is with us heading to Halifax for the weekend for his brother’s wedding!) It is a tall order, but we are geared up for it and will start cutting today.

Last night, after going out for a bite to eat to decompress, I came home and took the photos of the new plaques and ornaments. Below are the example of three of the twelve:

I will save the other nine to show you in the next day or so, as it will give me some pictures for you.

Keith spent the evening applying the patterns to the boards so we are ready to begin cutting today. It will be an exciting day for both of us, as we feel that we did the right thing standing our ground and not selling out. I’ll talk more about things in upcoming posts, but I realize that this has become quite lengthy and I will sign off here.

I wish you all a wonderful and productive day, and thank you all for your advice and support!

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"



12 comments so far

View joewilliams's profile

joewilliams

88 posts in 812 days


#1 posted 08-23-2012 12:27 PM

In a former business we were often pushed by customers to compromise (reduce) our price for services or let the customer buy the gear (a major source of our profit) and have us install it, when our business model was “designed installations of equipment” as a single package.

On those occasions that we lost a bid to a prospective or repeat customer, we almost always got their business again later on. Why? I think it had to to with quality, and sticking to our guns on pricing….I think the price I charge for my services says something about what I think those services are worth. If I don’t think a service or product is worth much, nor will anyone else.

Of course there is that delicate balancing act of being competitive.

Glad you guys stood firm!

-- Joe - - - something witty should go here - - -

View Roger's profile

Roger

14855 posts in 1491 days


#2 posted 08-23-2012 01:01 PM

I really like the way those all turned out.Very classy

-- Roger from KY. Work/Play/Travel Safe. Kentuk55@bellsouth.net

View MsDebbieP's profile

MsDebbieP

18615 posts in 2848 days


#3 posted 08-23-2012 01:04 PM

what I see is that in a slow period for the type of work you offer your products are doing well. They want your stuff.
Thumbs up!!

As for the business relationship, it sounds like you have a clear picture in your mind about what you do, why you do what you do, and how to achieve that vision. If the rest doesn’t fit then move along to find something else that does. .. and then regardless of the outcome know that your choices were right for you at that time!

Enjoy your post-challenge breather.

-- ~ Debbie, Canada (https://www.facebook.com/DebbiePribeleENJOConsultant)

View BritBoxmaker's profile

BritBoxmaker

4400 posts in 1723 days


#4 posted 08-23-2012 02:23 PM

Well done ,both of you. Presenting a united front and standing firm appears to have paid off. I hope all goes well with the new order. Your latest pieces are amongst the best of your work, that I’ve seen.

-- Martyn -- Boxologist, Pattern Juggler and Candyman of the visually challenging. http://www.theartofboxes.com

View BigFoot Products Canada's profile

BigFoot Products Canada

620 posts in 2080 days


#5 posted 08-23-2012 03:37 PM

If you are looking for a good buy on a Laser I will be putting mine up for sale soon.
We now live in St. Catharines Ontario, and we just bought a house in Summerside PEI. I’m going to buy an even bigger one than I have now..
This unit is two years old.. I paid $25,000 for it with taxes and shipping, and if I decide to sell it I’m going to ask $15,000
Here is a link to what I have now.. MY LASER
It is a very large unit.. You have to have a workshop with a LARGE door opening or you can’t get it in..
Anyhow if your interested you can “private message me”

View Jamie Speirs's profile

Jamie Speirs

4146 posts in 1543 days


#6 posted 08-23-2012 03:48 PM

Well done both of you.

Here is to the independents

jamie

-- Who is the happiest of men? He who values the merits of others, and in their pleasure takes joy, even as though 'twere his own. --Johann Wolfgang von Goethe

View Sheila Landry (scrollgirl)'s profile

Sheila Landry (scrollgirl)

7749 posts in 1607 days


#7 posted 08-23-2012 04:16 PM

Thank you all very much! We are on ‘lunch’ so I will answer everyone at once.

Joe – we are trying to be as competitive as we can with “their woodcutters” He tried to make it seem as if he can order from them (for the same price) and 2-3 days later they have the pieces in the Ohio warehouse. Whether it is true or not, we can’t imagine it being that much more beneficial to the company. There is usually set up time for laser cutters, and that usually requires a minimum order to be most efficient. We can’t imagine him ordering say 50 sets at a time and still getting a better deal than we are giving him. The laser guy has to make money too, I would imagine. Also, shipping lots of smaller orders would in the long run cost more than shipping a couple hundred at a time. Even within the USA.

But that is neither here nor there. Bottom line is if they did the cutting, I would be signing away any chance of making anything at all on my own designs – and that is just wrong. They are already selling these kits for several times the cost they are paying us. For doing nothing but putting them in their catalog and shipping them. And you can bet the customer pays the shipping for their own kits too.

It just irked us that even though they were making a lot on our designs, they still wanted more. It wasn’t enough. I asked Keith “How much is enough?” and we both just shook our heads. Greed is an ugly trait. I am sure there are many designers that are just starting out that would give in to their wishes – just to be in the catalog. But as I said, we were willing to walk away rather than work our butts off for nothing. We never mind working (I think production can be fun!) but I am not working for nothing and neither is Keith.

I really didn’t know if they would come back or not and take the new design. Part of me thought that they would not just to ‘show me’ that I was too demanding. I was OK with that though, and ready to accept that fate. When they called and ordered the new kit, I was a bit surprised. Apparently they would rather make some of the money than no money at all. That was good.

Thank you for the comments on my new designs, Roger and Martyn. They kind of got lost in the drama of yesterday’s events. I will show the other nine tomorrow.

So far we are really rolling today. It looks as if we will have this order of 250 kits cut by tomorrow. We are getting faster at our production and it is not tedious at all. Good music and some breaks make fast work of it and it is worth a couple of days of cutting for us to know that the quality of these kits are up to our standard. We are printing the patterns as we cut and have extras of the bags and wood. I am going to order some more now so that we are ready for the next round of work.

Thanks for the info about the laser cutter. We aren’t quite ready yet, but we appreciate the information and hopefully in the future we will find we have the need for it. :)

Well . . . I hear the lunch whistle blowing and it is time to get back to it. Thanks as always for your support .

Have a good afternoon – Sheila

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"

View Druid's profile

Druid

646 posts in 1482 days


#8 posted 08-24-2012 12:49 AM

Good to see you standing your ground. Your products, and the level of quality are first rate, and offer excellent value for for the money. To give away your control of your creativity (as you have expressed) will devalue all that you have worked for, and that’s not fair to you, Keith, or your existing customers. I like the way that you are dealing with this, and I think that the road you are taking is the best. Your business ethics are where they should be, and they will benefit you in the long run.
Keep smiling.

-- John, British Columbia, Canada

View TripleB's profile

TripleB

79 posts in 1355 days


#9 posted 08-24-2012 03:54 AM

Kudos to both you and Keith, I’m sure they were simply testing out their “Starving Artist” tactics on you to see how far you would go. By standing your ground, I’m sure they have a new respect for you (which is proven by the new order) and they probably will not try such tactics again.

I read your blog every day in my email, my apologies for not coming here to comment. I do want to thank you for your calling me in regards to buying the EX-21, I have had it about a month now and my productivity has increased three fold, thanks for your help.

Bob

-- Join me at http://www.scrollsawparadise.com/

View TopamaxSurvivor's profile

TopamaxSurvivor

14862 posts in 2363 days


#10 posted 08-24-2012 07:13 AM

Glad to hear it worked out OK. AS I’ve said before, knowing when to say “No” is one of the most important judgements you need to stay in business. Everyone operating who was operating in my little niche of the local business world when I started in 1985 is gone. All but one bankrupt.

You never want to get so busy doing things that don’t pay that you don’t have time to take on things that do!

-- "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

View Sheila Landry (scrollgirl)'s profile

Sheila Landry (scrollgirl)

7749 posts in 1607 days


#11 posted 08-24-2012 10:11 AM

Thanks guys! I am also sure that they were seeing how far they could push us. But setting boundaries is an important thing in any relationship – business or personal – and I think that is exactly what we had to do. To me, it will be interesting to see the next time that I submit to them what their response will be. As far as we are concerned, there are no bad feelings and we will just move on from there. We had to do this with another of our wholesalers last year and since then, things have been good for both sides. Hopefully this business relationship will be the same.

If there is anything that I can stress to others in our position it is to define your boundaries BEFORE you negotiate. I am very fortunate that when they first called and left the message Keith and I were out. It gave us the evening to talk to each other and set our limits of what would be acceptable. Then when Keith talked to their rep, we still didn’t make any commitment either way before we broke off the conversation and once again discussed the options that were presented to us. Ultimately, we feel we made the right choice.

Making commitments and decisions on the fly or under pressure certainly clouds things over. The rep is going to be on vacation after today and they were pushing this sense of urgency on us, even though I submitted the pieces a couple of weeks ago. All of a sudden, there was little time to answer and I hate to say it, but I think they tried to put us on the spot so that we would answer quickly.

When they expressed concerns about the shipping times, Keith suggested they order a bit sooner, as they could see the pieces were selling. “We can’t do that” was the reply. “Our system isn’t like that.”

Well, then – they would have to wait, wouldn’t they? It sounded a bit ridiculous to us. We think it was just another way they were trying to ‘encourage’ us to allow them to cut the kits.

Oh well . . . on to better things. :D

Sheila

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"

View ArtistryinWood's profile

ArtistryinWood

97 posts in 2374 days


#12 posted 08-24-2012 08:29 PM

Hey Sheila

I to understand the realities of running your own small (1 or 2 person) business and trying to deal with larger corporations. I have a similar situation dealing with two companies, one is like family, the other is all about $$$.

Good on ya for standing your ground, hard to do in this economy.

Whenever it gets to stressful I read this, hope it helps

-- It seem's to me i could live my life, a lot better than i think i am. Andrew, Midland, Ont.

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