Mar 8, 2006

Kit Clubs are the new Scrapbook store...

In the past 5-7 years, it seemed like anyone who loved to scrap thought they could open and run a successful scrapbook store. The result is the situation we have happening right now with stores closing right and left. According to my industry sources, in 2004, more stores CLOSED than OPENED. People naively assumed that because they loved scrapbooking, that they possessed all the skills necessary to open a scrapbook store. Not true.

Now, I see the same thing happening with kit clubs. There are literally hundreds, if not thousands, of them in the industry. Some are run by the manufacturers themselves while others are run by well-established names in the industry. Now, it seems that anyone who can match Bazzill with brads thinks they should have a kit club. After all, "how hard can it be"?

Well, it's a lot harder than you think and many people are completely surprised by the degree of difficulty. I wonder how many kit clubs didn't make it out the door even once. Matching products is the easy part.

Points to ponder are:

  1. Product availability - you will be at the mercy of vendors. If you need 50 sheets of stickers and they only have 40, what are you going to do?
  2. Membership management - what happens if you have 50 members and assume that 5 will join so you put together 55 kits only to have TEN people join and you're 5 short?
  3. Payment issues - not everyone's credit card goes through all the time. Just try to get someone to give you a good card number... But, if they don't get their kit - they'll eat you alive!
  4. Design Team- you won't have a lot of money to pay so you won't be able to afford "the best of the best". Will they be reliable or will they be there just for the DT experience?
  5. Cash Flow - you must plan your kits MONTHS in advance and buy products for the DT to work with. Therefore, you end up overbuying to meet minimums at vendors and to give your DT a good variety to choose from. How much of it will never get used??
  6. Timing - if you are planning 4 months in advance, how will you make sure you have the freshest, newest products? If you plan your March kit in December, by March, everyone is going to be looking for the new products from CHA.
  7. Members - what would make YOUR club more desireable than any of the others? If you don't round up ENOUGH members, your costs will eat all your profit and then some.
  8. Marketing - how are you going to get people to join? They won't come running, you'll have to advertise and convince them that YOUR club is best. Advertising will take a sack of cash!

These are just a FEW issues you'll run into. Those that get their kit clubs off the ground quickly discover that pricing is tricky. You will have an unbelievably thin profit when you get done with all the money eaters. Not to mention you'll have to balance boxes in line at the Post Office each month. That gets old really fast.

1 comment:

Scrapbooking Tips and Techniques said...

Some very good points. I've noticed a lot of new scrapbooking clubs popping up. I certainly does seem like a lot of work for the profit.
What scrapbooking type business do you think is the most profitable?