1. I want our yarn to be more accessible to Canadians. There is a big push right now to buy, and to support Canadian, on both sides of the border (
which we deeply appreciate by the way, and I’m pretty sure I speak for all Canadian small businesses when I say that!). I feel that, if I’m asking Canadians to support me, I need to support the effort from my end too, particularly as we anticipate an economic downturn and reduced buying power.
2. I want our yarn to continue to be accessible for our US customers as well. Our US customer base make up about 75% of our annual sales. This is partly because of our dollar value; US customers are getting an automatic 30% discount (more these days, as I write this our dollar is at .68 cents), and partly because the US is a bigger market. However, that will change if tariffs arrive. And that tariff may go up if our government retaliates in kind.
3. We are very little, it’s just Tito and I running the show, which means we can pivot at need to best serve the needs of the community and keep our business afloat. One has to be flexible these days!
I hope that makes my reasoning clear :) I am simply adjusting my model so we can all continue to get what makes us happy! Let’s answer some of the questions I’ve gotten since we made our announcement, shall we?
How can you afford to change your margins?
The short answer is, we can’t. But we can produce more yarn than we currently do. The same overhead costs, divided over more skeins, means a lower price per skein. So we have decided to take on the extra hours, and are hoping that our customers will respond by sending us the extra volume. As long as the sales are there, the numbers can work. If we lower our costs and the sales don’t come in, we will have to re-assess things. It will be a little hard at first, but we have weathered hard before, and we are nothing if not dedicated.
Your fulfillment time is already super long, how will you handle this?
We agree, it is super long. So my solution is threefold; I will work longer hours, yes, but I also hope this pricing model will provide adequate cash-flow for the company, which means I can stock raw materials more readily, and even overstock when possible, thus allowing me to maximize my painting time. Hopefully this mitigates some of the supply chain uncertainty we may be facing. Finally, I will divide what I dye between order fulfillment and ready-to-ship inventory, which will result in a percentage of orders (ideally 50/50) that can be fulfilled quickly.
I hope that answers the main concerns I’ve heard so far. It’s an experiment, if it works, it has to work for everyone, across the border, and it has to work for us. It’s a little counterintuitive, but I believe it’s the right move. Here’s hoping :)
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