STARTING A RETAIL & PRODUCTION SPACE // Business Update #6 Part 2 // October 2020

so this is kind of a joint i guess idea in terms of throughout the whole month i've been stressing out about the kiln basically not having the keon like i said just slows things down way too much um so i'm really trying to find a way to solve that issue and there's a few things i can do i can either buy a small kiln that i can have in this rental house um there's no way to put it in door i might be able to put in this corner if it's small enough i can put it in this corner run the pipe out the window for venting and that could work and now that i'm thinking about it that that's actually feasible there's a small kion if i get something that's the smallest i can get is probably like a 20 liter so and it's about 60 centimeters wide so if i put it in that corner and it's on wheels right so if i pull in that corner and pull it out away from the wall when i'm using it so it doesn't burn the wall that's absolutely doable it just means spending about two no i think it'll be about three and a half grand on the very small kiln and it's a kiln that'll outgrow very quickly so that's an issue at the same time it's like do i spend three grand or four grand on a small kiln that would tie me over until i can basically get a commercial space so the second solution would be to rent a warehouse space something you know roughly 50 meters square to 100 meters square in australia at least in melbourne from what i can see i can get something 15 grand a year to 20 grand a year is doable for warehouse space no retail it'll be a little bit further out from the city um so there'll be a dedicated production space and then that way i can buy a kiln have that set up there and just move move the home studio out basically which is not a bad idea but it just means that the pressure on selling is a lot higher because i'll basically have to make enough money to pay for the rent um and the utility so i think i made a quick budget per year having my own space would cost about 25 grand minimum i think 30 grand is probably a safe bet um so per month there'll be two and a half thousand dollars uh to break even and as someone who's still so new into this business i think that's quite a bit of pressure to put on making two and a half thousand dollars in sales having my own space would mean that i can spend all my time in production and get a decent amount of things made but being a rental warehouse it doesn't increase my sales outlet and that kind of brings me to solution three is to have a retail space or production space in the back or you know it can be a joint space but there needs to be a little bit of separation so the front of the window shop area can be a retail space and then anything behind that can be you know a wheel and a kiln at the back and ideally you've got re-access where i can fence the kiln out either window or through the roof but what happens is it's going to cost a lot more because the retail space is worth a lot more than the warehouse space obviously and the retail space that makes sense would be in the inner city on at least close to like a main shopping strip for example and what i'm looking at so for those who are in melbourne i'm looking at brunswick uh most likely sydney road up more north side so it will be kind of albert street closer to coburg than princess hill and the prices there are probably so what did i say warehouse would be about 15 grand so let's use that as a as a benchmark uh retail space would at least be 20 grand 22 ish would give you something around 15 meters square so you're gonna lose a lot of space and pay a higher price but you get the retail the question is how much is a retail space worth with online sale so basically what i'm doing now with the online only sales all my audience comes from social media and people i know and words of mouth etc it's hard for people to stumble upon your brand like it's a really it's a very conscious marketing decision to get people to follow you for example when i do my streaming when i do a lot of live streams and social media posts and all that hashtag and all that so much marketing stuff to worry about just to get people to be aware of your brand and then try and sell items to those audience it's like a multi-step process that for example i've got a thousand or so followers right now and i made eight to ten sales so that's like what one percent of those people would make a sell where a retail space with foot traffic you get people who have never heard of you people who don't know what your brand is about but they see an item in the shop front and they like it and they buy it uh so how much is that worth it's really hard to quantify and i'm doing a lot of research in terms of like foot traffic and conversions on sales in that space and also the target market because then your audience is a lot more localized where online i could sell to anyone around the world and i guess anyone in australia if i'm doing a retail shop my target market then becomes people who either visit that location or live in that location so what are my demographics so in brunswick it will be a mix of younger people in sharehouses students some young professionals i think the north side is not as i guess professional as the south side so if you go to like south yarra paran turak windsor dazzle of area uh elsterweg you get a lot more i guess people with money the north side definitely will have a larger interest in handmade goods like ceramics and so far there are a few studios in the northern area but there isn't really a retail for handmade goods at least along the city road area i don't think there's any shop i mean i need to do a proper walkthrough i haven't really seen a shop that sells just handmade items made locally and to be fair there isn't a lot of homeware shops in the area either so that's that strip of sydney road is kind of known for all the wedding stuff so there's a lot of wedding dress designers and outlets um wedding cake but that's kind of changing because i think that industry is kind of going away especially in the retail base being on the main strip and i think sydney road is being developed soon and when i say sooner i mean like the next five to ten years um so i think there's gonna be a shift in terms of the kind of shops you're gonna see um in that area and it will be it will be really fun and interesting to kind of be at the forefront of that shift because the rent is actually still relatively cheap um compared to the other suburbs like if i was going to get a space in south yarra it would cost about 40 grand to 50 grand a year for similar space um i think there are some cheaper but overall it's quite expensive and the amount of vacancy you see on chapel street church street for example it's kind of high much higher than what it is in sydney right right now even though there are quite a bit of empty shops for new businesses like mine i think that's a better way to go and you can capture a market where i find that there will be a bit more invested in the brand um they'll be a bit more loyal to the brand as long as you're you know maintaining that aesthetic and you're i guess sticking to that style and not you know outsourcing things and kind of changing the way the business goes as it gets bigger anyway so that's more on the i guess location front which is very you know original thing so for those who are not in melbourne which on youtube most people are not in australia um where my instagram is a bit more australia-based um so i'm gonna move on a bit and talk about the third idea so the third idea is kind of a hybrid between the two solves the problem of putting the pressure on a new business to make sales while still providing myself with a production space and a retail space and basically that's a shared studio so to me this is my favorite idea because it covers a lot of bases if i do a share space a lot of the revenue of the shop would come from rent so the rent where i rent out the space for other makers um most likely gonna be ceramic focus and i think that's a better way to go than just any makers because then people would come to the shop for ceramics and i think it's a little bit more focused but that could change in the future so if i can break even with just the rent from the residents and their members that puts pressure off me to make a lot of sales while providing me a retail space to kind of grow my small business and also provide other brands so people who will be renting the space in the shop to have an outlet and like i said before it costs a lot to start a retail space this way other makers could come in and spend about a thousand to a thousand two hundred dollars a month the pricing is still being worked out obviously and what they'll gain is a dedicated space a private space for their own practice access to kilns which i think is probably the biggest hurdle for everyone who's trying to do the same thing as i am and a lot of this idea comes from my own struggle basically so i want to capture a market of people who are like myself where we're starting out relatively new trying to expand but kind of limited by space and i think that a lot of us who live in the inner city for example would be limited by that people who don't have a property where they can install electrical work and have a garage where they can have a home studio but most likely the kind of newer brands um i also want to have a few wheels maybe like four to six maybe even eight wheels for a membership area where people could pay about i think it has to be on the lower end so maybe like 300 to 400 a month and that gives you business hour access to the studio um it will include you'll get credit for firing so maybe let's say 10 kilos of firing per month and anything above that you'll pay six to eight dollars per kilo which will be cheaper than the market rate which is about nine kilo nine dollars a kilo right now and yeah full access to the shared wheels so it's kind of like hot desking but for pottery and also a third type of membership would be a part-time membership so you might get two days a week um of your choice or maybe just a weekend uh a lot of the details are being sorted out but that could cost 200 a month maybe or 50 a week but i i'm trying to figure out if that's too much having the part-time and the full-time membership or if it's just just stick it to full-time membership and that's it and like simplify things in terms of tracking and making sure that i don't overbook the space and another reason i want to have multiple wheels in the shared area is for classes as well so if i can do one classes a week so basically the break-even point for me is two full-time residents two full-time membership and one class per week and that will be enough to pay for all the expenses including rent utility and stuff like that absolute break-even point no profit and after that any any extra membership would be profit to the space which is great all right so on to the retail side of things i think the membership there's still a lot to kind of iron out in terms of the details but i think there's a decent amount of interest there that could work but the retail space is where the quote unquote profit is going to come from so i want to have a retail space where i can help and i guess provide a service to other makers to sell their stuff and strictly to people who rent the space i want customers to come to the shop for the people that work there so it's not just random ceramics but you come here because you know that this person sells here and you want to come and visit and see this stuff in person and maybe even a chance to meet the makers and have a chat and all that stuff so there's a bit more backstory to the pieces and i think that increases the value of the handmade ceramics it's there's going to be a difference just a random piece of work versus something that you see being made almost um that has a face behind it um so it will work almost like a gallery space it will be cl it will be more similar to a gallery space than a home ware shop basically there will be little posters with details of the people who make the stuff of their background the material backstory everything just to make it a bit more personal any sales that are made in the shop will take a commission the percentage is still being worked out and i think it's going to be really hard to decide that now it's almost like a trial and error thing and it's going to be open discussion to the people who want to rent a space people are interested in terms of how much they think it's fair and how much i need for the business to be sustainable but considering the value that a retail space to bring to the brands i think somewhere about 15 to 30 would be the range um and they'll have to be narrowed down in terms of what kind of surface i can provide as a space so marketing i think it's a big thing especially if there's going to be a decent amount of social media following for the shop that can be very helpful for new brands to reach a market that they might not have initially obviously the foot traffic and stuff like that you don't get as online business so we also gonna take care of the sales and you know dealing with customers and packaging and all that stuff so basically if you're a maker who's renting out the space the only thing you have to really worry about is how you present your own shelves and your own kind of selling area and everything else is sorted out by the shop so i think that's worth quite a bit in terms of the convenience and also just the value it brings so yeah so a combination of all this would i guess allow a space to be sustainable in terms of um as a business and i think it will be something interesting for people to visit as well like it at least to me i believe it can be some sort of a destination where people would come to the area just to visit your shop and especially if there's gonna be a mix of interesting artists and brands we can capture a wider market and it's almost like uh it's almost like an arts and crafts market but a little bit more upscale a little bit more refined and just a little bit more focused so instead of having like 20 stores and 20 different makers and 20 different i guess medium it's gonna be a lot more focused into handmade ceramics it could be functional way it could be decorative it could be fine art it doesn't really matter and to be honest the more diversity the better so there's not like a direct competition between the people who rent the space i think that one makes it a little bit awkward between the members and to just dilute the sales a little bit um where if we have a whole range of items it's just gonna be more interesting that way um and like i said a little bit more of a wider net so to speak and it's funny because all this kind of came from just me wanting a kiln i guess you could say that it kind of like the idea is kind of blowing up and but then it doesn't seem far-fetched each time the idea grows bigger it seems to be a logical step so it just depends on how much how much risk i'm willing to take in terms of um startup capital which i think it's going to have to be a full video on its own because this is already getting a little bit long and i want i don't want to go into too much of that nitty gritty stuff by the way because i'm still working that out in terms of the costs um but yeah so i'm most likely gonna go with the share space and retail idea even though it's gonna cost more to start i think it's going to be more sustainable in terms of profit it's going to it makes a lot more sense and it also provides a bit of i don't it sounds weird to say as a business but it does give back to the community a bit in terms of like the ceramics community because if there's if there's a business that offers that sort of service right now i would take in a heartbeat like this is basically what i want but no one's offering it yet so i'm just gonna have to do it myself and the fact that i'm so desperate for a space like this means that there will be other people who will be a similar boat and that's why i'm you know relatively confident that i will at least be able to get enough people in to break even and make it sustainable and any other profit is just bonus and most likely reinvested into the business it's weird because i go into this making money is never the priority um with this share space obviously when i think about dle as its own brand yes i do want it to make a profit i do want it to expand and be more well known basically and i want to make a living out of it but this share space like the profit side of thing is never it's never an issue it's more about can it be sustainable can it be beneficial to the people and can it attract customer that will enjoy that experience and i think if those things work the profit will come naturally and it's not really a concern if that makes sense as long as i provide a good service the money will come like i'm not doing this to make money i think there's a difference in the approach and the overall business i think it changes the way the business is and i think it makes it more authentic and makes it more welcoming so it kind of comes hand in hand like if i if if i don't focus on the money i would probably end up making more money but that's who knows if that's actually going to happen so in terms of putting everything into motion i think it's something i'm going to work towards no matter what um if it works or not we'll see but the first step is which is weird because the first step is actually buying a kiln and that's because the kilns that i want and actually any kills even the kilns that you buy in australia um there's a decent amount of lead time i think it's at least two months more like four because everything's made to order um so i'm going for a road kiln most likely a 200 liter one and that has to be imported from america so there's a distributor in or imported in south australia who i'm having a chat to and basically they're saying the earliest will be april april may would be a safe bet so if i leave the space now that's about four or five months of space with no kiln and i think the space with account is basically useless just because i can maybe bring in stuff to sell at the retail shop but i just it's gonna be logistically annoying and it's also i don't think it presents the space as its best initially and i think that first impression is gonna be really important like the launch of the space is gonna you want people to talk about it you want people to have a good experience with it you want people to basically spread the words and do the marketing for you and if they come in and the space is like not really nice it's not renovated yet it's just a couple of shelves with some random item here and there it doesn't it's not memorable and i think i rather wait a few months uh even though there are spaces i've inspected so i did like four inspections already and there are spaces that would be perfect and i think i can see it in my head exactly how i want to kind of renovate it and set up the space and make it usable for the people but if i rush into it now it's just gonna too much of a depth space in between here and the kiln so if i order the kilns now and i said kilns because there's gonna be more than one just because if you're going to have multiple makers there having just a single kiln it's going to be too much weight in between where if i have at least two kilos on rotation then things would move a lot quicker so i'm gonna do a front loader for the main primary kiln which will be 200 liters and then a secondary kiln which will be a top loader because it's cheaper by a lot and probably around 140 liters so that gives a bit of variety so for people who might make less volume they can use a smaller kiln and for people who make more functional wears and plates and stuff like that they can use the larger kilns and that's optional and the pricing will be different for each kiln um nitty-gritty stuff again so let's not get into it um so i guess the biggest decision now is do i order both kions right away or do i play it safe and order one kill and by the time the kiln gets here depending on what size space i get i can either all the second kiln or or the second larger kiln um where if i order two kions now and then turns out i end up with a much smaller space than i anticipated and i'll have less members and less i guess demand for kilns than is it waste of money but if i buy one at a time that means it's going to be an extra four months wait for the second kiln and they're stacking the slow things down too much and is that gonna would that make it less appealing for people to want to come in and rent the space and be a resident artist there so that's kind of decision decision and i guess the difference is eight thousand dollars for the second kill and it's like how much of a risk is that because i know for a fact if i want to sell that kiln for basically the full price i can um the demand for kion is so big and especially a kiln that you can get right away without that two months six months wait time i can easily just resell that if things don't work out the way that it goes so maybe the risk isn't as big as i thought anyway i think that's kind of enough for this video all these idea came within the last week so it's kind of still being worked out but it's just funny how fast things are moving in terms of like deciding okay this is what i want to do this is how i want to do it yeah it's funny how i always choose careers that has so much like physical limitation in terms of like space and equipment and all that there's so many times like maybe i should have just been a graphic designer and just work off a laptop in the cafe and be you know flexible like that but anyway it won't be fun if it's easy so yeah so that's october done um november is going to be a quiet one i'll just make a few things and hopefully get a sale up on first of december i think the exciting things like with the studio and share space and stuff that's going to happen more early kind of q1 next year maybe even q2 but i'm gonna keep all the updates on instagram and i know this is a you know for me it's a very interesting and exciting journey and i think it's the same for a lot of people who are watching from the outside and people who are curious as to how all this actually works out and there's a decent amount of interest of other plotters who would like to have a space like this and i guess it's a matter of how much it's going to cost them and if it's going to worth paying that amount to move into a space but it will be so much fun to share space with people who have the same interest and the same kind of passion i've shared spaces before with photography and it's it's it's so helpful to be able to bounce ideas and just create a community and actually one thing i didn't mention was having the share space could mean that i can do workshops i can do classes for the people who are renting the space and obviously people who have a membership for the pot desking hot wheeling system um they will get a discount on any guest speakers so i would like invite established artists they can you know specific techniques so maybe someone could come in and talk about a specific hand building technique or a throwing technique or even marketing so i could bring in a social media expert for example and they can talk about how to build a community and how to build your social media followings for artists and makers and stuff like that so like you know not just craft based but also business workshops i think that would be really popular with people like me basically yeah so it's yeah again i it's hard for me not to keep talking about it because there's so much ideas there but i'm gonna stop myself and just call it because i think this video is gonna be like way too long already so yeah um if you don't already follow instagram subscribe blah blah very typical stuff i actually don't really care about followings anymore in terms of like the number it's more people who follow and also engage i think that's really important and it's it's really nice to have all this conversation with a lot of people who are either makers or just people who like ceramics that's probably been the most enjoyable experience in terms of social media because it is the marketing style thing can be a bit td is trying to like chase numbers and i'm trying to change the mindset again it's a similar thing to the whole profit versus um what would be the other side of the profit so it's very similar to the share space where it's like profit versus value like how much failure are you bringing to your customers basically and i think the social media thing is the same like i can chase the numbers by just trying to mass market and get as much followers as i can or i can create a social media presence where it provides benefit to people who follow me so like all this behind the scenes kind of video i'm very targeted towards people who are in the same boat as me and i think that's more interesting because people message me and we have conversations on all this business ideas gives me an outlet to bounce ideas off and again it's all these community-based things i think that's what attracted me most into this shared space which is funny to think about because it all started off as let's make ceramics and let's make a brand and now it's like let's make a ceramics community and let's bring in all these people and yeah uh i'm going off topic again i'm trying to wrap up this video and i don't know how to end this so i'm just gonna stop here yeah there won't be many videos coming in but i'll definitely do the next business update so see you in the month or maybe actually less than a month see you in three weeks you

Channel: dear Ali Ceramics

Views: 1,782

Rating: 5 out of 5

Keywords: pottery, handmade pottery, handmade, studio potter, pottery wheel, clay, ceramics

Id: 6jyS0VnbL6g

Length: 26min 3sec (1563 seconds)

Published: Sat Nov 07 2020