Hammering it home

by Cinda Baxter on February 20, 2009

in Discounting, Independent Retailers, Retail

home_studio_1Before I even get started, let me be clear: my heart and soul are with storefront retailers, not home based businesses who purchase the same product being sold to brick and mortar stores, then sell it at a discount.* Having taken plenty-o-kicks in the shins the past two weeks from the kitchen table crowd, I fully expect the following post will result in my photo being plastered to dartboards everywhere.

Oh well. Just be sure to use one with me smiling.

Storefronts, it’s time you make a concerted effort to distance yourselves from people selling out of their homes. I don’t mean just the paper crowd, either; gift and home accessory lines are popping up in residential areas faster than you can say “How the heck did that happen?”

So how do you begin? By fighting back on two fronts:

Online
Fight fire with fire, using your website as the match. Home studios rely heavily on the internet (who do you think most of those online discounters are anyway?). It’s time to bring your A game, straight to their favorite turf.

Offline
Home studios are buried in the ‘burbs, mixed in with swingsets and garage doors. You, on the other hand, are in a trafficked, public area with loads of visibility. Time to use it.

Now…let’s go….

1. Got a photo of your store on your home page? If not, do it and do it now. Show the public you’re a legitimate business factoring into the community landscape.

2. Does your business support local causes? Non-profits? Silent auctions? Does your staff get involved in events like cancer walks and bike races? Set up a new section on your home page touting those organizations, complete with brief write ups about what you did, how you helped, and how dedicated your business is to supporting the community. This is called “cause based marketing.” Use it.

3. Band together with neighboring stores then create a neighborhood PR plan. Come up with a name for the group (ex: The Linden Hills Collection) or, better yet, partner businesses with a community development group. Create an annual event that supports all the stores involved (a weekend sidewalk sale, an art walk, a three-day bridal stroll, etc.). Pool your advertising resources to get more bang for the buck. Use press releases to publicize events and achievements.

4. Cross market with other stores that fit into your retail category. If you sell tabletop, partner with someone who sells home accessories and furniture. Loan them table settings for their window displays, providing small signs that attribute the items to your store. If you’re a stationer selling wedding invites, find the nicest bridal gown store and florist around, then partner with them. Hold after-hours events in your store featuring arrangements by the florist and accessories from the bridal store (use the frames you sell to feature photos of their favorite gowns). Pool your customer lists to build buzz.

5. Get verbal about all the ways a brick and mortar store is better than a total stranger’s house: more selection, better lines, ample parking, and secure, well-lit public areas. Go ahead and get ballsy in the language (“We won’t even ask you to sit in the basement”)-—now is not the time to be shy.

6. Also get verbal about the difference between an industry professional and a home hobbiest. You provide a professional environment, a fully trained staff, an extensive knowledge base, regular business hours, and contribute to the local economy via taxes and payroll contributions.

Don’t stop with your website. Think about window signage, bag stuffers, flyers, newsletters, and the myriad of opportunities you have in the store every time a new set of eyeballs strolls in the door.

These next several weeks, you’re going to see a lot on the blog about the plague of home studios, discounting, and other practices that dilute brands and diminish value. No industry has seen its reputation damaged more by these elements than retail stationery; with NSS quickly approaching, the conversation is quickly heating up.

Whooooosh….. Was that a dart sailing past my head? Oh well.

* Editors Note: “My bad” for not more clearly defining which home based businesses are being addressed here; fifteen years in the stationery industry, where “home studio” has one very clear, very distinct definition is the culprit. Thanks to Annalee and Claire for calmly pointing out the need for clarification.

Karen February 20, 2009 at 11:56 am

What are the vendors saying about the home “studios”? They surely have no control, much less visual assurance, about the service or display of their products that they might have in a retail store. And it seems that there is even a segmentation of the online sales sector. I think I am hearing that there are on-liners who just take orders, never see customers, do not stock a thing, and possibly don’t even have the “albums” from which to sell since no one sees them first hand but rather just the images online. And then we have “home studios” where a person might actually have a space that is dedicated to “albums” etc. and from which they do sell to walk-ins (that is scary enough right there). Actually in most residential areas they couldn’t have walk-ins but would have to have appointments etc. And there are usually some restrictions on how much delivery traffic is allowed on the streets.
So it looks like it is a battle being fought on two separate fields. And throw in bricks and mortar who also sell on-line and you have a full-fledged war going on. I don’t have any suggestions for a good solution – but I would love to hear what others are thinking about this. It is as if all niches in the industry are being segmented into on-line businesses vs. the storefront business. There has to be some recognition of that by the vendors and some way to support both, but not at the expense of either. Wishful thinking perhaps .
No darts, Cinda!

Molly February 21, 2009 at 9:23 am

I can’t speak for other cities, but can tell you that here in the our area, home studios break all the rules. They don’t charge sales tax, they discount heavily, they lie to vendors about having stores so they can pick up lines they shouldn’t have, they’re located in areas not zoned for business, and they never ever ever contribute to community projects or not-for-profit fundraisers. They paint us brick and mortars as price gougers in consumers’ eyes when in fact they are operating illegally then using the “savings” to fund their so-called businesses. I am disgusted and angry and amazed over how many vendors support these activities by allowing home studios to carry their lines.

penny February 23, 2009 at 9:31 am

Hello – What an interesting, well written thread. I would like to make a few comments. I am the owner of a home based business – we have no bricks and mortar store and we are very well respected. We do very respectable gross sales every year right from our home. We pay taxes – and lots of them because of the tax bracket we find ourselves in. Not only that but we also bring that money into the community and spend it at all those perfect little bricks and mortar stores that you like to defend. In our community there was no perfect bricks and mortar storefront to house our growing business. So the option was to open our business at home. No one ever asks us where we are – we charge full professional rates – in fact you may even know our business and would probably never guess that we are home based. We support local charities, and fundraisers more than most of the local store fronts do.

Many of the local bricks and mortar shops that you seem to represent are being supported by businesses like ours – we have local and international clients. Some come to our home based studio but most have no idea where we are located – and don’t really care.

It’s up to the bricks and mortar stores to pick up the slack – be more resourceful and community minded. Be open and inclusive. Embrace the home based business owner because they are your customers too – their dollar is worth every penny as much as yours. And they are spending it in your stores. Don’t bite the hand that feeds you.

So be careful when you criticize home based businesses because in economic times like this they are keeping your community alive in ways that you obviously don’t realize.

J.A. February 23, 2009 at 9:31 am

First of all, why all the hatred? Your post is very similar to racial profiling. Why assume that all businesses that don’t operate from a storefront operate in the same way and who do you presume is the “kitchen table crowd?” I operate a business out of my home studio and frankly, I use my kitchen table for eating meals – not conducting business. I support many non-profit organizations – hospice, susan komen foundation, just to name a few. As for asking someone to sit in a basement – ?? Many, many of my contemporaries have beautiful home studios filled to the brim with gorgeous artwork where they and their client are surrounded by an incredible amount of inspiration. To make the assumption and insinuation that home based businesses are “hobbiest” and that we don’t pay taxes borders on libel & slander. If you, or Molly for that matter, personally know of businesses that do not pay their taxes, perhaps you could pass on the particular information to the IRS or your local state agency. I’m sure they would be happy to take action on any facts you can provide them with. Your post does nothing to bring together like-minded professionals – no matter where they locate their business. It appears that the purpose of your post is to drive a stake through the middle of the industry to promote separation instead of unity. Very sad indeed.

kelly February 23, 2009 at 9:39 am

Alright… I have to weigh in here. I guess I am very confused as to where all this animosity towards ‘the kitchen-table crowd’ comes from. I have a lot of associations with both home-based business as well as storefront owners and have not had issue with either nor have I ever heard as many ridiculous assertions by either group as I have heard on this website in the past few weeks.

Firstly, for “Molly” to insinuate that all home based business are illegal operations that don’t pay taxes or give back to society is just nonsense. Many of the home based business I have relationships with are independent designers who also work closely with brick and mortar stores, have accounts with them, exhibit at trade shows, have sales reps, and certainly pay taxes. I am curious about these store owners (who apparently don’t want to fully identify themselves in their comments), where they get their stock from? I assume they do not sell lines for independent business who most likely are home-based? How many people on Etsy have been courted by storefronts, the media etc because they are home-based, independent designers?

I guess what I find most distasteful is that Cinda’s articles, while they do have very helpful suggestions, does not focus on the positive but rather seems to encourage a distrust and animosity towards home based business. (the ‘kitchen table crowd’ comment is a perfect example of that).

I have a business that has operated from my home studio for several years, all the while, I was paying taxes, getting appropriate business licenses, donating proceeds regularly to kiva.org, donating items to local charity fundraisers etc. I also recently became the proud owner of a storefront and have been working hard to get my brick and mortar space up and running. So I feel I have a good view from both sides of the fence. And I will proudly say that as a storefront owner, I will carry lines from many sources, including those who may happen to be home based business. Perhaps I will even look for a nice kitchen table to put in the space, for meeting with clients of course.

Are there shady home based business? I am sure. There are certainly some b&m operations that might fit that bill as well. I think we can’t and shouldn’t make general claims about either.

I think if you want to give helpful suggestions to store owners as a way to make themselves stand out, then that is great. I totally support that. But to do it at the expense of others and to also encourage (while claiming not to) this sort of “disgust” and “anger” towards smaller companies seems unprofessional and quite frankly, a waste of time.

Annalee Sarton in San Francisco February 23, 2009 at 11:51 am

From kelly’s comment:

“I am curious about these store owners (who apparently don’t want to fully identify themselves in their comments)“
* Interesting comment coming from someone who herself hasn’t given her full name

“Many of the home based business I have relationships with are independent designers who also work closely with brick and mortar stores, have accounts with them, exhibit at trade shows, have sales reps, and certainly pay taxes.”
• Those are called “vendors” or “manufacturers,” not in-home resellers of wholesale product, which I believe is the topic

From Penny’s comment:

“We pay taxes – and lots of them because of the tax bracket we find ourselves in.”
• Sales tax doesn’t have brackets. Are you charging and paying that too?

To Cinda:

THANK YOU for the wonderful ideas that we are already implementing in our business, a store that sells beautiful gifts and home decor. There are several “kitchen table businesses” in the area we know for a fact don’t charge sales tax. Unfortunately J.A.s suggestion to report this to the authorities is unrealistic, since the first thing authorities ask for is proof. Finding one of their customers who is willing to say “no, I didn’t pay sales tax” without fear of retribution is a bit of a long shot. Of course we hear them brag about it all the time (the home businesses, not the customers).

THANK YOU for speaking up on behalf of all storefront retailers who have to deal with shady home businesses. Maybe the three who have posted here are above board and are the exception to the rule. Most (all in our area) are not which reflects what I hear from other retailers around the country.

Ann February 24, 2009 at 7:13 am

This is an extremely interesting thread to ponder. Consider this:

My business partner left last April. Since then, she has had a couple of “home parties”; i.e. knock-off purse parties, home dec parties, jewelry. She does not see this but these type of “parties” are in direct competition with my (and her once owned) B&M. It really burns me up. Need I say more about the partnership?

Also, the legit home parties where I have bought merchandise charge each customer shipping. Being a retailer and having knowledge about shipping charges, I know someone is making a hefty profit on shipping.

The first thing I ask a vendor is if they will protect me in my territory or zip code. This is where the value of a rep comes in; if the vendor has a rep they better be working to ensure that I am the only B&M selling the line and not going to my competition just to make sales goals.

Just my two cents worth. . . .

claire wagner February 24, 2009 at 7:53 am

Annalee, Cinda, et all:

As I read this post, it uses the phrases “home businesses”, “the kitchen table crowd” & “home studios” (actually, the “plague of home studios”). This language does not differentiate between independent designers and simple resellers as Annalee states. Perhaps that is the subtext of previous posts, but anyone coming into this new, would not know that based on this post.

Honestly, I am embarrassed to be a store owner if this is who my colleagues are acting. My business fully supports home studios and embraces them. Some of my best accounts are from up and coming designers who also work from home. And I can tell you from some photo tours I have seen of their home based studios, they put some store fronts to shame.

I do think that manufacturers must be diligent in making sure that any reseller (home based or otherwise) sets a competitive price point and does not undercut the very market it is representing. But that should just be good business and not inherently be a knock towards “the plague of home studios”.

When I promote my store in the community, my customers like that I support home based businesses. They don’t care if someone made something in their basement or garage. They like knowing that they are supporting a small business and in return, they support me and my business.

If this post and future posts are specifically about irresponsible resellers who may or may not have a storefront, then you need to make sure you target those individuals. Your generalizations are really irresponsible and work to cause a divide.

I appreciate the positive suggestions you give and hope to act on them but don’t think I can continue to support a website or writer who continues to bash the very home based studios that allow my storefront to thrive.

Jess February 24, 2009 at 8:29 am

I completely understood what was meant and agree that we B&Ms need to set ourselves apart from home studios. It’s interesting that so many commenters are focused on two or three sentences in the introduction instead of the several paragraphs of great recommendations. We’re taking pictures of the storefront today and have our webmaster ready to update the site asap. Setting ourselves apart is exactly how we’d like to educate consumers regarding the benefits of buying from a professional retailer.

Anonymous February 24, 2009 at 1:27 pm

Perhaps you’d like to clarify a little further as your statement still seems to include all home-based businesses that by wholesale from vendors who ALSO sell to B&Ms, correct? Wouldn’t that pretty much be all HBBs? If you’re referring to those that simply resell at insane discounts that it’s not worth my time to even mention, then please clarify.

My problem with such blanket statements is exactly what’s happening here on your blog. Your generalizations and accusations are being regarded as truth, when in fact, I’d bet there are only a small amount of “businesses” who operate in a shady manner. I’m a stationery designer who buys wholesale from vendors who also sell to B&M stores. Oh no- I must be the reason your business is going downhill, right? No- I don’t offer discounts, I pay my sales tax, and I conduct myself in an appropriate, professional business manner. HBBs aren’t the reason B&M stores are failing. It’s a new world and a new retail market. Step up or step back. Take a look at how you are operating. Does your sales staff greet everyone that comes in the door? Do you bend over backwards to talk to people, be friendly and knowledgeable? Or do you stand behind your counters and bemoan your lack of business, or chit chat about your noisy next door neighbor. I’m constantly amazed at the number of businesses who pay no attention to any of these things – do you?

To Claire- thank you for being among the minority who values HBBs, for supporting those around you, and in turn supporting your local economy.

claire wagner February 24, 2009 at 7:05 pm

Thanks Anon…

I agree with you. Quite frankly, I think the internet is the downfall of B&M’s, more so than the home studio. Why does someone want to get in the car, deal with traffic, pay sales tax, yadda yadda, when buying online is so much easier and often doesn’t include sales tax and also has free shipping from time to time.

Anon is right… it is a different world. I think Cinda makes great suggestions as to how the B&M can create a better online presence and quite frankly I feel that the internet should be her true foe, not the home studio. But considering she is (probably sitting at her kitchen table), filling the blogosphere with her posts, she may not want to shoot herself in the foot.

I enjoy Cinda’s helpful suggestions. I think this would make for a more positive and successful direction for the site. Please focus on this more. If you have to start a post with “having taken plenty-o-kicks in the shins the past two weeks” then perhaps you should think about why that is.

Bob Brandt February 25, 2009 at 5:50 pm

Thanks for the creative ideas. I’m following all of your suggestions starting immediately.

To Claire Wagner:
I’m guessing you don’t have a lot of competition from nearby home studios or don’t own a stationery store. Those of us who fall into either category understand what this post is about and wholeheartedly support any effort to curb their unsavory, predatory and/or illegal practices. It’s a rare pleasure to see someone take a strong public stand against something that damages responsible retailers in all categories.

Heather February 26, 2009 at 11:40 pm

I am a wholesale manufacturer of high-end custom invitations. We sell through dealers, home-based and storefront alike. We don’t sell to internet resellers, mostly because I think our product requires a sit-down with a professional; there’s too much selection and educations to be ordered through drop down menus.

I enjoy working with all my dealers and have built great relationships with many of them over the years. My general impression of most home dealers is that they build their businesses through connections and referrals. Rarely are they luring people off the street into their basements. Most are seasoned professionals, some have employees, and often they even make house calls to their clients. And don’t be fooled, it is equally possible for a storefront business to give a discount, or engage in other shady and tax-evading practices as it is for a home-based business.

When people complain about others ‘stealing’ their business, my reaction is to say ‘win it back’. Competition is everywhere, and I think the advice Cinda gives for increasing your store’s visibility is good advice. Anything you can do to build your business is a good thing. You can’t stop home and internet businesses. Focus on the problems in your business you can solve, or find ways to promote how your business is better than your competition.

Meredith in Massachusetts March 5, 2009 at 2:55 pm

My business partner and I constantly battle the home studio problem, as there are several in our area. They continue to pick up the quality lines we’ve loyally served for years (more than 30 in some cases), then discount them heavily while telling vendors they don’t. Rarely (if ever) do they charge sales tax, according to many people I know who have ordered from them.

Cinda, it is so refreshing to hear a voice as prominent as yours speak up in defense of legitimate storefront retailers. The suggestions you’ve made here and elsewhere on the blog are interesting, helpful and achievable. It’s not hard to see why your store won national awards.

You have been more than fair by posting the home studio comments, even though one wonders if given their angry tone they would so graciously accommodate the same. I can’t honestly say my level of understanding or patience would rise to yours, especially in the case of the home studio accusing you of profiling. That kind of childish behavior belongs on a playground (or a lengthy time out).

Thank you for staying true to your roots and for paying it forward to the rest of us out here in the brick and mortars. You are our hero.

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