Saturday, January 14, 2012

14:365 Yelp You

Oh to be a business owner in the era of Yelp.

So, we received a new Yelp review; a new 3 star Yelp review:

i think they dye most of their yarn here.
they have some really nice yarns, found plenty of fingering yarn. sample projects are provided, which is a plus.
downside is that their selection is small, especially the colors that i like and prices are high. havent been greeted by anyone here since my last two visits here.

Hey, 3 stars isn't too bad. It's fair. Too bad I strive for a straight A record. Though if there is one thing my business has taught me, is teaching me, is to accept the lack of control I have, and the fact of the matter is that I must not get bogged down, and to keep reaching, growing, and learning.

In light of this being my year in which I post daily to my blog about being a business owner in the year 2012, I would like to address a few things that this Yelp review states. And my hope, by addressing this is that folks reading this might consider a few things when analyzing, critiquing, and judging businesses especially on Yelp.


1. As a business owner, it helps me to know what you are looking for. The more you can help me understand what you would like, the easier it is for me to purchase those things. For instance, in Anita's review, she states that we don't have a large selection and that we don't carry colors that she likes. Fair enough, though, it would be great to understand what she would like to see - both in terms of size of yarn and color. I specifically reserve a portion of my budget, and choose not to overstock my shop, so I can bring in yarns that customers would like to seem - or to see more of.

There are vendors that have 300+ colors. I do my best to select a range of colors. Though any help you can offer would be great knowledge for me to have. Also, know that we constantly have product on order, so what we have during one person's visit, can be different than another person's visit. We tend to work with hand dyers and the time it takes for them to process an order can be longer than mass manufactured yarn. So sometimes, I will be the first to admit, there can be a lag time between shipments, and the shop can look a bit picked over. Though, I have spent so much time hand selecting yarn, you might be surprised to find a new yarn you've never met and that we have in stock.

2. Our shop has been open 1 year. We have over $100,000 in inventory. We have over 700 bolts of fabric. I have not counted how many skeins of yarn we have, though I will, and I will post the number here. This is a very large amount of stock. This is the 2nd Yelp review, where we have been nicked for a perceived lack of stock.

Here's a quick and dirty lesson in bookkeeping and taxes.

+ You have expenses: things (office supplies, advertising) you spent money on that can be written against your profit.
+ Then there are assets (things you have spent money on, but can not be written against your profit).
+ And then you have your profit (this is what you have made, from what you have sold, on which you must pay taxes).

As far as the government is concerned, inventory is an asset, it is not an expense. We can not write our inventory off against our profit. Because of this fact, at the end of the year, it is possible to show a profit (of which we must pay taxes), but really all of our profit is tied up in inventory. Point being is that then, a business owner, if not careful, does not have enough money to pay taxes, though are customers desire more inventory. It is an insane conundrum. At this point, the business has to look at lines of credit and more than likely create a cycle of debt. Many small business owners who own shops get caught in this cycle. It is extremely unhealthy fiscally. Yet, we have nipping at our heels once again the conditioning of big box selling strategies, tons of inventory to choose from, always new inventory, big sales. I don't mean to sound like a broken record, I just need to express how pervasive this type of conditioning is and how detrimental it is to the health of our society.

I know this kind of thing can be a drag to think about but it's important especially if we want to turn the boat around in this country, recover from this recession, and maintain healthy debt-free businesses.

3. In addition to comparing our shop to a big box store, it is unfair and unrealistic to compare our shop to shops that have been open 9 - 30 years in this area. We simply, for better or worse, can not match that kind of inventory. On one hand, because our store is new, our inventory is new and fresh. A common instance is the shop who has over purchased, and now can not sell their inventory. Now, because of the lesson described above, they have an overvalued inventory, they can't afford to purchase new stock, making their customers unhappy. I tend to be more conservative in our purchasing. I choose not to overbuy. I would like to see how customers respond to a brand of yarn before purchasing a large amount. I would rather have a mid-size selection of yarn with room for growth than be boxed in by old inventory.  Would it be possible to analyze what our shop might bring to the community of fiber, fabric, and yarn shops? A good Yelp review for us, would potentially, and more than likely, mean more business, more profit, and more inventory. I would love to bring you more yarn!

4. When people bring up that Verb is pricey, it would be more helpful to know what kind of pricepoint you are looking for.

Here's how large corporations / companies that manufacture abroad work (Gap, Nike, etc). They manufacture products abroad paying people very little to make them. I once watched a documentary, China Blue, where the Gap was (caught) negotiating with a Chinese factory and wanted to pay 6 cents per pair of jeans, and the factory owner, wanted 7 cents. This figure included the labor and the material. They were literally bargaining over a tenth of a penny. How embarrassing and demeaning. Ok, so then the Gap goes and charges us $69.95. A large part of the profit from the jeans goes into advertising, promotion, and branding. Of course, as the brand strengthens, the more jeans the Gap will sell. The Gap is counting on selling a huge amount of unit sales because that gives that even more bargaining strength at the factory level. The more factory time they reserve, the less chance a competing demin company (Levis) can come in and win the factory's time, in turn, the more able Gap is to undermine that denim company's pricing at full price, and the less they lose when putting their jeans on sale.

While there are only a few yarn companies that could be even closely compared to the above example, it would be a similar scenario. So, yes, there are yarn companies on the market that create (abroad) a less expensive product. In my shop, we specialize in 2 things. Manufacturing our own yarn in North America and supporting other companies who do the same. By creating and supporting products made or at least partially made in North America, we have to abide by labor laws and I can feel somewhat cleared of conscience that no one's life is severely in danger. That said, obviously labor in this country costs much more. When customers choose to shop at Verb, they are choosing to support humans who are living a sustainable lifestyle; they are paid every 2 weeks, they work an 8 hour day / 5 days a week, hopefully they have health insurance. I hope that makes our customers feel good. It certainly makes me feel good.

It takes money to make our product as well as the other products we carry. In comparison to the above example of manufacturing abroad, that kind of mark-up simply does not exist. The price we charge is extremely close - almost stupid close - to the amount of money we charge for a product. It kills me to know about the pricing structure that common American goods go for, and yet people continue to judge us, and others in positions similar to us, as if we are ruthlessly marking up yarn and material. We are simply asking you to pay for what it costs.

The only thing that is going to change the current frustration with our government and big business and to change how we view our spending habits and our conditioning. If you are receiving a product for a price that seems to be too good to be true, it is. Someone somewhere is paying for it - either financially, physically, or emotionally.

To be totally forthcoming, me, and everyone who works at Verb, income-wise make nothing in comparison to those who would be in a similar position to a large corporation, yet it takes the same amount of brain power, intelligence, and hard work. It would be really disappointing to have to close our shop because we have been wrung dry.

Business is a relationship. It is an exchange. With the imposition of big business, box stores, and chains, it is hard to remember that because the exchange of power is very different. But in locally owned businesses, there is give and take on both sides. What can you, as a customer offer, and what can the shop offer you? This is constantly being negotiated, expectations and demands shifting. Please know that we would like to help you as best we can, though know, that we, as in I, am on the other side of the counter, and can, at the end of the day, only offer so much. I physically and emotionally can only offer so much. What makes business exciting, healthy, and creative is the component of relationship, community, and humanity. Life will feel richer when we re-incorporate human-ness, or humane-ness, back into business.

5. On that note, we love to say hello to people and to meet our customers. And we love it when you say hello to us. I grew up in MN, where the law of the land is to greet people. Walking down the street, you say hello. To. every. person. Ok, I am exaggerating. But really, I find it extremely important to greet folks. In this reviewer's case, somehow, on two occasions, we've failed to say hello. We need to try harder. Just know, as I mentioned before, no one who works for Verb is paid equal to the tasks they carry forth, and the amount of work they have to do. They are asked, and pretty much required to: answer the phone, check-in shipments, add new products to Quickbooks, manage inventory, order new products, sign-up people for classes, create the class handout, field tons of questions, handle online orders and customers, process and ship club shipments (the bread and butter of or business), teach classes. Did I mention breathe? The fact that they come to work and are so damn happy and helpful amazes me on a daily basis. If for some reason, they don't say hi to you, please know that I am 100% sure it is not their intention to ignore you or discredit your trip to the shop in any way. If you come to the shop, say hi, the people who work at Verb are so awesome. They love to create and love it that you want to create too.

6. At the end of the day, it's true, we might not be the shop for you. That is why it so important that there are multiple shops in the area with a range of perspectives. I hope that you will support them and in the meantime, I hope to build a healthy business that will earn your respect, offer quality products, and hopefully have you as a customer.


By the way, in China Blue, the Gap won, they paid their 6 cents, and the young female workers were left unpaid. Shop local and know that you are supporting an alive, creative, and real economy.


Johnny said...

thank you for sharing this. We need more small business owners to be this open and transparent with how and why do they what they do. It helps build trust and I for sure will come in and support your efforts the next time I'm in town.

Anonymous said...

Thank you Kristine for sharing this. Many many people have no idea how hard it is to successfully run a small business with all these big box store shaping people's perspectives.
I love your little store, and would shop there in a heartbeat over larger chain craft stores or yarn outlets.
Your honesty is a gem.

Mutare Posts said...

Thanks for this indepth insight on the considerations of being a business. I am grateful that you make conscious decisions that have an impact beyond your immediate reach. The organic food and farming industry started similarly. I agree - communication from the customer is essential - however the typical business transaction is one where the customer either complains or compliments - there is usually no dialog, negotiation or exchange of ideas. Your business approach will help change that.

Birdsong said...

Kristine, this is a succinct and awesome description of how business works. There is not equity based on how hard you work or how clever you are. Choosing to shop at Verb rather than at one of the big online yarn retailers becomes an ethical choice, to support local and regional workers and producers rather than cheat someone else out of a living wage so you can consume more. I know that sounds a bit harsh, so I will add that by carefully planning what we want to make with fiber and fabric and collaborating with the shop owner, we can order from you and have much more participation in our projects, even if we have to exercise patience in doing so. Personally, I prefer to know where my supplies come from, and they they get to me by ethical routes.

Fiona said...

Great post. I hope that over time many more people will begin to understand the real costs associated with the low prices they pay in malls etc. It is a shame when people are so self-absorbed that they don't see beyond the end of their own nose. Keep up the amazing job you are all doing.

Casey said...

Key Kristine,

This Yelp review shares some similarities with so so many yarn store reviews that I see:

It's a somewhat negative review posted online by someone who didn't interact with the staff, it includes feedback that the shop owner would have loved to hear directly, and the customer wanted to be welcomed in a way that didn't happen for them (wasn't welcomed, wasn't welcomed enough, or felt excluded for some reason or no reason)

The bit about welcoming is especially interesting.

It's tempting to say that this is a phenomenon that is specific to yarn shops or certain personality types... or relate it to a shift from real life relationships to online ones.. but I know that I personally have struggled with feeling "improperly welcomed" before so many of my relationships were online. In my case, it was record stores (when they existed) and comic shops. When I'm visiting a shop for the first time and I'm hoping that I'll like it enough to become a regular customer - that's when the desire to be welcomed (or inducted) can kick in.

I know that you guys are friendly and welcoming and also busy, and I know that trying welcome every customer can always backfire and make people feel pestered.. I'm just wondering out loud about it all. I think that my best experience being introduced to a new shop was when they person at the counter gave me a super quick tour and explained how the shop was laid out. At first, I didn't want to be bothered but then I felt welcomed and less disoriented. Now when I go in, I feel like it's "my" shop because I know where things are and why they are where they are.

...I'm rambling now...

Mary-Heather said...

love you Kristine!

gusseting said...

all i can say is: i totally have the love for you. i get it. don't stop.

cauchy09 said...

What a great encapsulation of some of the concerns on the other side of the shop counter. I wish that AVFKW could be my local yarn shop.

Michelle (missymarie) said...

Kristine, your passion and integrity in your personal life and your business life are exemplary.

Life can be a challenge at times but always stay true to who you are and what you believe in.

You are an amazing woman doing an amazing job!!!

Erin C-B said...

Some people are just butts.

Sonya Philip said...

My dear, unknowingly, you are giving me LOTS of fodder for my current project. Oh yes, you will roll your eyes. BTW Yelp sucks, like a person who takes the 25 seconds to whip out a nit-picky-two-cents-peanut-gallery-rant-aroni matters or effects real change. Oh the squeaky wheels in this new Age of Hyper-Narcissism.

Sonya Philip said...

@Casey you bring up a great point about when a store becomes welcoming/ownership of the customer. Having worked in yarn stores, I was convinced that it was a Catch22 - when Customer A comes in and you don't immediately talk to them because you are having a conversation with Customer B who's a regular shopper, then Customer A will feel unwelcome or that the store exclusive. But Customer B was once in the position of Customer A. (now who's rambling) So what's the answer? Not have a conversation with anyone? Have a script to equally regurgitate to every customer in the name of equity? That's what a big box or chain store is for. It seems like what many customers want is to vault from new to regular without "paying one's dues" of continued patronage. Shopping at an independent store and supporting local businesses is a choice. I'm just glad that it is becoming more mainstream to do so.

Unknown said...

I'm not a knitter. I'm don't sew. I'm not into fabrics or crafting (beyond being able to appreciate quality materials and their potential). It's actually my better half who is into these things. And this is why I was so impressed, Kristine, with your staff and yourself at how friendly and accommodating you have been toward me, even though I wasn't an enthusiast, and mine both times we have visited your shop. We think you're awesome, we think your shop is awesome, and we're going to sing your praises from the rooftops. We think the customers who belong in your shop do appreciate what you're doing and offering the knitters and sewers and crafters, and some (like us) are even willing to drive a fair distance just to sample and partake of what you have to share. Keep up the good work - it definitely shows. =)