Thread: Making a buck from your woodwork?

Let me share my experience with some real numbers.

my accountant just completed my annual account.
sales: $80,000
cost of sales, $30,000
expenses, $24,000
Net profit before, $26,000

I spent on average 30 hours/week, 1500 hours/annum on my hobby, 15 on production, 5 on driving, 5 on delivering product, procuring material, the other 5 other be business related, say planning, visiting client, free quotes, etc. If you take my net profit and divide my own time, I make $17 an hour BEFORE TAX, if you include my time in the expense, the net profit is $0, or its a loosing money business if you want to get paid more than $17 an hour.

Albert, if I may ask, what is included in the $24k expenses?

Originally Posted by Spyro

Albert, if I may ask, what is included in the $24k expenses?

Spyro, no problem.

Depreciation, home office, motor vehicle expense, 80% in these 3 items.

repair maintenance, telephone and internet (not a lot), general expense, freight and courier are the remainder 20% or there about.

Originally Posted by Albert

Spyro, no problem.

Depreciation, home office, motor vehicle expense, 80% in these 3 items.

repair maintenance, telephone and internet (not a lot), general expense, freight and courier are the remainder 20% or there about.

Ok just asking, because in reality these are really tax benefits for expenses you'd mostly incur anyway even if you didn't have the business, right? It's really just a side benefit of having a business, that you get to write all that off in your tax return.

Not saying that your overall conclusion is not true, it does look tough cash-wise, but if you stopped the business this is one thing that you would miss (I think).

Originally Posted by Spyro

Oh man, this is nothing, you should see what I went through with paypal as a seller on ebay.......

Well now, that explains a lot. I am not a masochist, and prefer to avoid the repeating pain.

Originally Posted by GraemeCook

Well now, that explains a lot. I am not a masochist, and prefer to avoid the repeating pain.

No, absolutely.
I guess what I was trying to say with all this, is that if you happen to have a favourite shop or favourite product on etsy, there is no need to miss out just because they're on etsy, all you have to do is ensure this particular shop is reliable and your payments are covered by your bank and/or paypal.

If you have alternative places to shop then do that obviously, but for my needs etsy is pretty unique, there are some small businesses and niche products on there that I can't reach any other way (unless I deal with them directly through their website, which is even more risky).

Originally Posted by Enfield Guy

Your a brave man Gungadin. Fortune favours the brave.

to go from hobbiest to a woodworker relying on income is a hard road. But it can be very satisfying.

i had been selling my wares for many, many years at a hobby level. I developed a few products, joined Etsy, and went from there. Identifying what the market wants is key. I had a good gig going making serving platters and the like for restaurants and cafes and I did quite well out of that. My prices were about 30% more than the imported garbage, but the longevity was far greater. I have product in industry that is still in service 5 or more years after initial supply. Generally hospo replace their boards and platters at least annually so the value proposition was easy to sell. Then came the great stuff up, as I like to call it.

A dish pig didn’t do their job properly, left food remnants on the board, stacked them close together, thus encouraging the development of bacteria in the food remnants. Food was placed on those slightly damp boards and folk got sick after eating at the particular establishment. Council mandated that there had to be a piece of baking style paper placed between board and food at service. The concept and style died in the bum. A whole market share lost virtually overnight. I’ll add that it was not one of my pieces that was involved. The risk though is there.

about three years ago I sold my house to buy a commercial space to set up my equipment. A big jump. I had a year off pretty much. I sold well, bought well, had a fair stack of cash and set about making my space workable, and liveable. I’ve still a long way to go before I can say I am comfortable. But I am happy, prolly the happiest I have ever been. I live a frugal existence. I make food, I don’t buy it in cause I cook well and hate paying $25.00 for something I can put on a plate for less than $5.00. I don’t really see the point.

i have a number of outlets around Australia that buy my products to on sell. I do not do stock on consignment, nor will I rent space in an outlet. My products have a healthy margin for the retailer, and for me. My products are sought after and turn over in the outlets that carry them. As far as Etsy is concerned, to me it is passive income, fairly healthy passive income. The selling costs average out at less than 25% so greater than what you would achieve with a wholesale arrangement. That number included packaging costs as well. Often the cost to sell can be as low as 10%. I like sitting in my local bar having a couple in the middle of the afternoon and hearing my phone make a cash register sound. Hmmm, can I afford to have another? I have sold product to more than 17 different countries and regularly have folk in the states pay $15.50 for a product and pay $18.00 to ship it. Then they leave a 5 star review.

The last twelve months has seen my export sales decline by 97% year on year, but I sill had a 50% increase in terms of revenue. My projections for the present twelve moths is for 80% growth year on year, just for Etsy sales.

i also offer custom builds, I work with a builder who makes tiny homes and provide his business with fit out products, ( the list is too long for here), I make display products for marketeers and I provide product development consultancy to folk who have an idea that they want to bring to market.

currently I am booked solid till March.

There is money out there. There are folk who are willing to pay for good work. There is nothing easy about working for yourself. But by golly it puts a smile on my face. It takes time to build clientele. That clientele can be ripped out from under your feet through no wrong doing on your behalf. Always do your best work. Always do better next time. Never, ever sell yourself short. Learn and understand what your costs are. Learn and understand how long it takes to make s product. Be better, demonstrate that.

Good fortune in your endeavours. Believe in you. Other people’s opinions do not matter if you are happy in what you do. How important is money to you in the happiness equation?

Best.
B

Some fantastic advice in there. Especially this:

There is money out there. There are folk who are willing to pay for good work. There is nothing easy about working for yourself. But by golly it puts a smile on my face. It takes time to build clientele. That clientele can be ripped out from under your feet through no wrong doing on your behalf. Always do your best work. Always do better next time. Never, ever sell yourself short. Learn and understand what your costs are. Learn and understand how long it takes to make s product. Be better, demonstrate that.

I would add to it, don't stay still. My wife in her ceramics business is always looking at what to do next as other people copy her. There is also a rhythm to her year. Leading up to Christmas is a great selling time, while now is a time for workshops - there is another one happening today in the studio on making ceramic birds. She has a few galleries who sell her stuff. The commission they take is nuts, but she looks on it as marketing. A few places buy from her and then mark the products up.
She stays in touch with people, too, on Instagram and through her monthly newsletter. She often has people who have bought from her in the past getting in touch when they need something (often as a gift) to see what stock she has. Next step in the constant studio reinvention is a shop space where the stuff she has for sale can be displayed along with stuff made by other people who frequent the studio - she will likely charge them a modest commission.

She has a few galleries who sell her stuff. The commission they take is nuts, but she looks on it as marketing.

Yep. A good gallery is doing the work of marketing that would take you out of the workshop if you had to do it yourself. They aren't just selling, they should be able to advise you on what the current market wants, and help with pricing.

At their best, it is money well spent, at their worst, it is money down the drain. Pick your galleries carefully.

Originally Posted by AlexS

Yep. A good gallery is doing the work of marketing that would take you out of the workshop if you had to do it yourself. They aren't just selling, they should be able to advise you on what the current market wants, and help with pricing.

At their best, it is money well spent, at their worst, it is money down the drain. Pick your galleries carefully.

Yep, the couple of places she sells through will ask for specific things depending on what they can sell. Makers need to be guided by the market. There is no point somebody making stuff that they think is great if the market doesn't agree. That is the best way to end up with a lot of dust collectors at home.

Etsy has been my main source of income, i have a five star rating, spend nothing on promotion, do what i list i will do and the steady sales keep coming.
If you want to know about the experiences of store holders and buyers on Etsy just go to the forums.

Apologies if Ive missed posts that cover this but has anyone made a jump from some previous employment (could be very stable or comfortable) into this field of cabinetmaking/fine furniture ? Instead of just making a buck on the side

If so we're you doing it as a hobby first whilst employed doing something else and eventually made the switch or sorta jump in two feet first and start working for someone in this field or go out on your own?

I guess money aside what was the transition like, more fulfilling making tangible products or slower pace or something?



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