Why We’re Crowdfunding to Grow Our Handmade Business

Many people have asked me how I first got started with my artisan-made business Kakaw Designs. The short answer is this: through a small Kickstarter project for $2000. That was my way of figuring out if people liked the idea of custom-made boots using traditional Guatemalan textiles. The answer was yes, and we’ve grown so much in the three years since inception.

Now, we’re doing another Kickstarter project (until November 20, 2016) and I want to explain why.  Because clearly, ours is an existing business, not a recently launched one.

And it’s been going really well. So why another crowdfunding campaign? There are three main reasons…

We want to shift our business to work more with women artisans.

We started the business using beautiful repurposed textiles here in Guatemala. But the goal has always been to focus on our work with weavers and embroiderers. Because by working together for new textile designs, we are more directly contributing to supporting these dying traditions.  

The downside is that this is more costly both in time and money. There is always trial and error involved, and the cost of making even samples is much higher because we need to prepare an entire loom of the commissioned textile. This all makes sense, it’s fair and that is how it should be, but it is an additional challenge that comes with ethical practices.

We want to balance both direct sales and wholesale.

This has been a challenge. In order to get into different retailers, we’ve had to increase our final price on some products, and develop new products specifically with wholesale in mind.  

Related Post: 4 Most Common Dilemmas of an Artisan Made Brand

So in case this is all new to you, this is how it works: Kakaw Designs sells 10 bags to Boutique A, and this is called “wholesale.” Boutique A then sells those 10 bags at a mark-up (they’re a business too, of course) and so the price generally doubles from wholesale to final retail. But in order to keep our final prices aligned both in stores and online, some adjustments had to be made, which means that we’re probably losing some direct sales beacause of the price increase.

This is a tricky balance that we’re still trying to figure out. How much should we dedicate to wholesale, and how much to direct online sales? We don’t have a clear answer yet, but we do realize that we need to have both things going for us – both wholesale and direct sales.

We want to have our products ready-to-go, which means stocking plenty.

All our bags and accessories are ready for quick shipping both in Guatemala and in the US. We have a shipping person in the US so that our delivery time is reduced. She also ships international orders because it’s just not feasible to ship directly from Guatemala to the UK, for example. We also keep stock here in Guatemala to sell within the country at different retailers, and people come to me directly as well. Word of mouth is a powerful thing!

This is all great, don’t get me wrong. The business is expanding; we are growing. But again, the extra stocking investment is something we can feel as a small business.

Related Post: What Launching an Ethical Fashion Brand Really Looks Like

That’s why Kickstarter.

We’re using this platform to take pre-orders on our newest products focusing on increasing the impact with the women – for weaving and embroidery. The groups of orders are not even that big (ex. 10 Picnic Blankets), but it just means that we can go into production mode without having to invest in stock first, and wait around for a potential sale. By taking pre-orders, those products already have new homes, and that way we can also reduce our prices per product. We’re also not undercutting any wholesale opportunities because this is a one-time only project, limited-time. The prices will increase once the products make their way to our website. We’ve already developed the new products, and now we’re ready to gear up for production.

I feel like sometimes there’s so much emphasis placed on the growth of a business, it can seem like a linear, positive progression. I think growth is good, but it does come with its own challenges. Kakaw Designs is at a critical point right now, one that I’m sure many small businesses have experienced as well.

It’s a great, exciting step for us in increasing our social impact and staying true to our mission of working with female artisans here in Guatemala. It’s the perfect opportunity to check our work and make sure that we are on the right path. And joining forces and grouping orders allows us to take that next step with ease.

Want to support the Kakaw Designs on Kickstarter? Check out the Kickstarter campaign here.

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