Staying in Business ** Nice People! (Sorta Long)

April 18, 2006

> Hi Kat, Dave .. other good folks ..

>

> Lemme comment a bit on the below. There's a bit more to it than has

> been presented .. and if some of you grow .. you will find yourselves

> learning some things that haven't been presented. Its not about getting

> into the ideal .. its about facing reality.

[Dave:] Butch, thank you for good food for thought, and a dose of sober

reality. I often ask myself where I stand - and where I wish to stand - on

the hobby-to-business continuum. As things stand, I hope to grow the

business to the point where I can semi-retire and do what's fun. I think on

the one hand that's utopian, but on the other it might be possible. People

keep telling me things that amaze me...like the HR director who told me I'm

onto something " really big " ...or the strangers who simply pick up a bar of

soap and go on about being able to " feel the energy and love " or similar

nonsense. Is it nonsense? Seems to me that most folks don't make comments

like that about soap, so maybe I am onto something " really big. " Right now

I'm making soap in my kitchen and simply cannot keep up with the demand.

That next step, to an " approved kitchen, " is one that seems impossible on

the face of it, but who knows.

--

Version: 7.1.385 / Virus Database: 268.4.2/314 - Release 4/16/2006

April 18, 2006

Hey there Butch (and all the other nice people here <grinz>)

I haven't been my computer much since this weekend - we're having a heat

wave here (not quite as hot as Dallas which will be over 100 today - but

hot enough nonetheless) and my upstairs A/C unit went kaput on us. They

can't come and perform the costly fix until Friday so I, and my

essential oils, have decided to hide downstairs for the next several

days *lol*

Anyway - I want to say the following about your post below - AMEN! I've

been doing this for 6 years. If I kept that expensive hobby mentality,

which I suppose most crafters & artists do have when they very first

start out selling their arts & crafts, I wouldn't still be in business

today. I realized early on that it was important for me to take this

seriously as a job and as an investment.

But growth is a b*tch!!!!!!

I have more on my plate than I can handle by myself these days. While

doing it all myself and my way is great for the control freak in me, it

is bad for the actually getting things done part of reality - and then I

get mad at myself for being a crappy employee and bad rep. for the

company!

Another issue is that I have several 1000 lbs more poop than I can fit

into the 25 lb bag I've been stuffing it all into (aka - my house). So

my goal which once was to be able to work from home - now has changed to

being the goal of getting my biz OUT of my home *lol* Amazing what

changes in perspective and goals a little time and life experience can

bring!

Anyway - I digress ... the point I was making is - I am expecting to get

some help in here shortly, cause I am one frazzled woman and I am hoping

to find a commercial space too. Those things could help make my business

grow to new levels ... and right there are two new HUGE expenses too

which have to be covered way before the potential payoff!

You are right, with all the added expenses that growth has brought (and

that is without even counting a new person on the payroll and rent on a

commercial space) - my profit margins end up going down, yet the amount

I need to have invested in the biz at any given time (inventory, etc ..)

has gone WAY up!

So when I am not on list as much as I should be, or not answering

e-mails as fast as I should be, or updating my website as fast as I

should be (or updating someone else's web site as fast as I should be

*wink*), or talking about drinking margaritas probably more than I

should be : :wink: : , please remember, I am working my butt off - I never

leave my job (since I work out of my home right now) and I probably

would be more sane, less stressed, and actually draw a paycheck by being

a grunt at any retail outlet .. then again - being totally sane has

never been my strong point - growing up I was basically dubbed most

likely to become eccentric *lol*

Have a great week - and get ready for another round of awesome prebuys

to be announced as soon as I get the ad written up *lol*!

*Smile*

Chris (list mom)

All Natural Handmade Olive Oil

Bar & Liquid Castile Soap

http://www.alittleolfactory.com

>

> on Behalf Of Butch Owen

> Hi Kat, Dave .. other good folks ..

>

> Lemme comment a bit on the below. There's a bit more to it

> than has been presented .. and if some of you grow .. you

> will find yourselves learning some things that haven't been

> presented. Its not about getting into the ideal .. its about

> facing reality.

>

> If you are not in the business of selling products this post will bore

> you .. read at your own risk .. you've been warned. ;-)

>

> >>i am just sick of seeing people just out to make a buck,

> regardless of

> >>how they treat others.

>

> Most folks will go along with this .. someone (I think it was

> Chris) pointed out that this is the way YL operates .. and we

> know its the way the pharmaceutical companies operate. Last

> year, I posted the profit margins on certain medications ..

> some were in the 3,000%-4,000% range.

>

> >>[Dave:] Right on, Justine! I think we need a new

> paradigm. In the past,

> >>it's been: what will the market bear? I think it should

> be: what's

> >>the least I can charge and still thrive?

>

> The established companies .. particularly the pill pushers

> and such .. operate using both of the above principles. The

> latter principle comes into play when they are competing with

> another pharmaceutical company for sale of a similar product

> .. same goes with soaps and cosmetics and whiskey and whatever.

>

> The difference is .. I think .. interpretation of the word " thrive " or

> " survive " . An example which I got off the I-Net just yesterday:

>

> > DALLAS (AP) - A $69.7 million compensation package and $98 million

> > pension payout to Exxon Mobil Corp.'s former chief executive and

> > chairman Lee R. Raymond has some shareholders and

> economists asking,

> > " how much is enough? "

> >

> > " Some folks will ask the question, 'Is this more evidence

> of big oil

> > taking an enormous windfall and retaining all the riches?' "

> said Mel

> > Fugate, assistant professor for Southern Methodist University's Cox

> > School of Business.

> >

> > The Irving company has drawn criticism from politicians and

> economists

> > for becoming the most profitable company in history - at consumers'

> > expense, they say.

>

> This example supports your words .. and it will likely remain

> true in the world of big business .. however .. it is NOT

> true .. can NOT be true .. in the line of business each

> seller on this list is involved in.

>

> When folks on this list begin to grow .. and find they are

> selling 100% or 200% or 300% more product than they were when

> they began what was most likely an expensive hobby .. they'll

> find that their profit margin percentage will NOT increase

> along with Gross sales .. it will DECREASE.

>

> This is because production costs will increase way beyond

> what they were when the business was run out of the home as a

> Mom or Pop operation.

>

> As time passes they'll see a need to reduce some frills and

> fancy stuff, or they will be forced to raise prices. I'm now

> considering cutting a number of frills and making some major

> changes to our standard operations procedures .. my choices

> are to do that or raise prices on some items.

>

> Raising prices (while still keeping them fair) will chase off

> some old buyers because folks are resistant to change .. but

> odds are great that the profit previously lost from retail

> sales to those who leave will not be noticed .. because they

> were not quality sellers anyway .. they were bargain basement

> shoppers and they will be happy purchasing less quality for

> less cost .. which they can find by disregarding Origin of oils.

>

> In 1999, when I went from major export (minimum 100 kilos)

> operating from my Turkish company .. to mostly retail .. some

> wholesale .. both in small volume and operating from my

> company in Maryland .. I found that I could do $400 a day is

> gross sales and still stay in business. There was me here in

> Turkey and one employee in MD .. we were operating out of

> that employee's Health Food Store.

>

> As time passed .. I gained more wholesale customers in 50

> states and 71 other countries .. I had to grow .. I needed 10

> times the space so I rented two side by side stores in

> Friendsville. The volume of work was so great that the

> employee who ran the Health Food Store could not handle my

> work and his too .. so he quit and I had to hire two full

> time employees. As time passed .. I had to bring a third

> employee on board.

>

> My modus operandi has always been to sell tested oils and

> provide a copy of the analysis to those who asked for it.

> This is an administrative nightmare .. a requirement that

> ties up at least 2 hours a day of an employee's time because

> as volume of sales goes up one will turn over oils more

> quickly and often that means one is dealing with a different

> batch of oils. Two hours from an 8 hour work day is a

> negative cost factor that must be considered .. a 25% loss of

> one person's labor. But I will continue to operate in this manner.

>

> Another cost was/is the commercial styrofoam overlays we

> place bottles of wholesale oil in .. I now use them only for

> oils valued at $50 and up because my cost per overlay exceeds

> $2. They are a good tool for ensuring shipping Monsters

> don't crush oils .. but its a big drain on profits. I have

> offered buyers 150% of their shipping costs if they return

> these to me .. maybe 2% of buyers do this. I will probably

> stop offering this little frill.

>

> Handling Charges vs Minimum Dollar Amount on Orders. I have

> never had a

> minimum amount on orders .. and have never charged a handling

> fee. We

> charge actual costs for shipping. But now I see that I must

> do one or the other. The reason is .. when a buyer orders

> (from my retail site) 3 each 20 ml bottles of oil .. say

> Cedarwood, Atlas .. Citronella .. and Lavandin, Abrialis ..

> the total dollar cost of the order is $19.47 .. the profit

> margin on that sale is LESS than my cost for labor to pour,

> package and ship the oils. Even if we throw in another

> bottle of Lemongrass and add $6.35 to the order .. now

> totaling $25.82 .. I still will LOSE of that sale because my

> folks are paid top dollar per hour .. and that I cannot change.

>

> In addition to the above .. buyers who purchase 3 or 4

> bottles of oil are not getting the most bang for their

> shipping buck in any case because US Postal rates are

> graduated in 16 oz increments. Same goes for the larger

> orders that we ship via FedEx Ground.

>

> The point in the above is .. the difference in time required

> to pour a $300 Retail order and a $30 Retail order is not

> much .. the time used to package the order and take it to the

> Post Office is the same. So .. I am considering placing a

> minimum on Retail sales and throwing in an option for orders

> less than this minimum .. a handling fee.

>

> The same will apply to Wholesale orders .. its possible for a

> buyer to purchase 4 or 5 bottles of oil from that site and

> the cost to be not more than $40 .. that is a loss to me ..

> this will change too.

>

> Bottom line .. in my company, the total number of customers

> served daily/monthly and the gross value of sales has

> increased by over 350% in the last three years .. but my

> costs to operate have increased about the same percentage ..

> and this does not count my time in front of a PC. Though we

> now turn over roughly $40,000 + in oils each month .. my Net

> Profit had not seen much increase because the profit margins

> per sale are just too small.

>

> I reckon those who give employment to three folks in an

> economically depressed area in Appalachia could be considered

> as being Nice People .. but if they're not getting ahead

> themselves even though they're putting in 80 + hours a week

> .. then they are Idjits. ;-)

>

> > [Kat:] I couldn't agree more...I have been trying for over

> a year to

> > sell my aromatherapy products. I just haven't broken through the

> > glass ceiling of doing a $100 show. I would have to sell almost

> > everything to make that much. I sell the soap for $3 a bar

> and room

> > sprays for $5 for 2 ounces. Everyone tells me to raise the

> prices but

> > I don't want to feel like I'm ripping the folks off.

>

> You have seen comments on this in previous posts. Its not

> about gouging the public .. its about staying in business.

> Some folks on this list will continue to operate expensive

> hobbies .. others want to operate a business and make a fair

> profit. Its not easy to do that in this industry .. I could

> quit now and draw my Social Security instead of the salary I

> pay myself from my company .. the SS payment would be larger.

> I could teach English 6 hours a day at any one of the many

> English schools here in Ankara and make more .. those schools

> bring folks in from the UK and USA all the time .. they are

> big profit outfits. Those who have been around a while know

> that I had plans to retire on 1 January 2006 .. but I decided

> to hang in there. From time to time I wonder if that was a

> good decision. ;-)

>

> My advice to the younger folks who are thinking of making a

> living in this industry is .. if you can work outside .. get

> a job at McDonalds and you will make a helluva lot more money

> while working a helluva lot fewer hours .. and when you come

> home at night .. you can leave the job behind you until the

> next shift.

>

> If you hang in there like I have .. you will become addicted

> to what you are doing and find it hard to quit. Addictions

> are rarely healthy.

>

> Y'all keep smiling. :-) Butch http://www.AV-AT.com

April 18, 2006

On Apr 18, 2006, at 1:01 PM, Butch Owen wrote:

>

> If you hang in there like I have .. you will become addicted to

> what you

> are doing and find it hard to quit. Addictions are rarely healthy.

Tee hee. So true. I used to think I should hang a sign in my studio:

" Fiber lovers beware. This could happen to you! "

Molly

Molly Gordon, MCC

Shaboom Inc., Life could be a dream...

360-697-7022

mgordon

lists

www.authenticpromotion.com

www.shaboominc.com/blog

April 18, 2006

Hi Kat, Dave .. other good folks ..

Lemme comment a bit on the below. There's a bit more to it than has

been presented .. and if some of you grow .. you will find yourselves

learning some things that haven't been presented. Its not about getting

into the ideal .. its about facing reality.

If you are not in the business of selling products this post will bore

you .. read at your own risk .. you've been warned. ;-)

>>i am just sick of seeing people just out to make a buck,

>>regardless of how they treat others.

Most folks will go along with this .. someone (I think it was Chris)

pointed out that this is the way YL operates .. and we know its the way

the pharmaceutical companies operate. Last year, I posted the profit

margins on certain medications .. some were in the 3,000%-4,000% range.

>>[Dave:] Right on, Justine! I think we need a new paradigm. In the past,

>>it’s been: what will the market bear? I think it should be: what’s the

>>least I can charge and still thrive?

The established companies .. particularly the pill pushers and such ..

operate using both of the above principles. The latter principle comes

into play when they are competing with another pharmaceutical company

for sale of a similar product .. same goes with soaps and cosmetics and

whiskey and whatever.

The difference is .. I think .. interpretation of the word " thrive " or

" survive " . An example which I got off the I-Net just yesterday:

> DALLAS (AP) - A $69.7 million compensation package and $98 million pension

> payout to Exxon Mobil Corp.'s former chief executive and chairman Lee R.

> Raymond has some shareholders and economists asking, " how much is enough? "

>

> " Some folks will ask the question, 'Is this more evidence of big oil taking

> an enormous windfall and retaining all the riches?' " said Mel Fugate,

assistant

> professor for Southern Methodist University's Cox School of Business.

>

> The Irving company has drawn criticism from politicians and economists for

> becoming the most profitable company in history - at consumers' expense, they

say.

This example supports your words .. and it will likely remain true in

the world of big business .. however .. it is NOT true .. can NOT be

true .. in the line of business each seller on this list is involved in.

When folks on this list begin to grow .. and find they are selling 100%

or 200% or 300% more product than they were when they began what was

most likely an expensive hobby .. they'll find that their profit margin

percentage will NOT increase along with Gross sales .. it will DECREASE.

This is because production costs will increase way beyond what they were

when the business was run out of the home as a Mom or Pop operation.

As time passes they'll see a need to reduce some frills and fancy stuff,

or they will be forced to raise prices. I'm now considering cutting

a number of frills and making some major changes to our standard

operations procedures .. my choices are to do that or raise prices on

some items.

Raising prices (while still keeping them fair) will chase off some old

buyers because folks are resistant to change .. but odds are great that

the profit previously lost from retail sales to those who leave will not

be noticed .. because they were not quality sellers anyway .. they were

bargain basement shoppers and they will be happy purchasing less quality

for less cost .. which they can find by disregarding Origin of oils.

In 1999, when I went from major export (minimum 100 kilos) operating

from my Turkish company .. to mostly retail .. some wholesale .. both in

small volume and operating from my company in Maryland .. I found that I

could do $400 a day is gross sales and still stay in business. There

was me here in Turkey and one employee in MD .. we were operating out of

that employee's Health Food Store.

As time passed .. I gained more wholesale customers in 50 states and 71

other countries .. I had to grow .. I needed 10 times the space so I

rented two side by side stores in Friendsville. The volume of work was

so great that the employee who ran the Health Food Store could not

handle my work and his too .. so he quit and I had to hire two full time

employees. As time passed .. I had to bring a third employee on board.

My modus operandi has always been to sell tested oils and provide a copy

of the analysis to those who asked for it. This is an administrative

nightmare .. a requirement that ties up at least 2 hours a day of an

employee's time because as volume of sales goes up one will turn over

oils more quickly and often that means one is dealing with a different

batch of oils. Two hours from an 8 hour work day is a negative cost

factor that must be considered .. a 25% loss of one person's labor.

But I will continue to operate in this manner.

Another cost was/is the commercial styrofoam overlays we place bottles

of wholesale oil in .. I now use them only for oils valued at $50 and up

because my cost per overlay exceeds $2. They are a good tool for

ensuring shipping Monsters don't crush oils .. but its a big drain on

profits. I have offered buyers 150% of their shipping costs if they

return these to me .. maybe 2% of buyers do this. I will probably stop

offering this little frill.

Handling Charges vs Minimum Dollar Amount on Orders. I have never had a

minimum amount on orders .. and have never charged a handling fee. We

charge actual costs for shipping. But now I see that I must do one or

the other. The reason is .. when a buyer orders (from my retail site) 3

each 20 ml bottles of oil .. say Cedarwood, Atlas .. Citronella .. and

Lavandin, Abrialis .. the total dollar cost of the order is $19.47 ..

the profit margin on that sale is LESS than my cost for labor to pour,

package and ship the oils. Even if we throw in another bottle of

Lemongrass and add $6.35 to the order .. now totaling $25.82 .. I still

will LOSE of that sale because my folks are paid top dollar per hour ..

and that I cannot change.

In addition to the above .. buyers who purchase 3 or 4 bottles of oil

are not getting the most bang for their shipping buck in any case

because US Postal rates are graduated in 16 oz increments. Same goes

for the larger orders that we ship via FedEx Ground.

The point in the above is .. the difference in time required to pour a

$300 Retail order and a $30 Retail order is not much .. the time used to

package the order and take it to the Post Office is the same. So .. I

am considering placing a minimum on Retail sales and throwing in an

option for orders less than this minimum .. a handling fee.

The same will apply to Wholesale orders .. its possible for a buyer to

purchase 4 or 5 bottles of oil from that site and the cost to be not

more than $40 .. that is a loss to me .. this will change too.

Bottom line .. in my company, the total number of customers served

daily/monthly and the gross value of sales has increased by over 350% in

the last three years .. but my costs to operate have increased about

the same percentage .. and this does not count my time in front of a

PC. Though we now turn over roughly $40,000 + in oils each month .. my

Net Profit had not seen much increase because the profit margins per

sale are just too small.

I reckon those who give employment to three folks in an economically

depressed area in Appalachia could be considered as being Nice People ..

but if they're not getting ahead themselves even though they're putting

in 80 + hours a week .. then they are Idjits. ;-)

> [Kat:] I couldn't agree more...I have been trying for over a year to

> sell my aromatherapy products. I just haven't broken through the glass

> ceiling of doing a $100 show. I would have to sell almost everything to

> make that much. I sell the soap for $3 a bar and room sprays for $5 for

> 2 ounces. Everyone tells me to raise the prices but I don't want to feel

> like I'm ripping the folks off.

You have seen comments on this in previous posts. Its not about gouging

the public .. its about staying in business. Some folks on this list

will continue to operate expensive hobbies .. others want to operate a

business and make a fair profit. Its not easy to do that in this

industry .. I could quit now and draw my Social Security instead of the

salary I pay myself from my company .. the SS payment would be larger.

I could teach English 6 hours a day at any one of the many English

schools here in Ankara and make more .. those schools bring folks in

from the UK and USA all the time .. they are big profit outfits. Those

who have been around a while know that I had plans to retire on 1

January 2006 .. but I decided to hang in there. From time to time I

wonder if that was a good decision. ;-)

My advice to the younger folks who are thinking of making a living in

this industry is .. if you can work outside .. get a job at McDonalds

and you will make a helluva lot more money while working a helluva lot

fewer hours .. and when you come home at night .. you can leave the job

behind you until the next shift.

If you hang in there like I have .. you will become addicted to what you

are doing and find it hard to quit. Addictions are rarely healthy.

Y'all keep smiling. :-) Butch http://www.AV-AT.com

April 19, 2006

At 08:13 AM 4/19/2006, you wrote:

>Why do I care? Because when you

>truly thrive, when you earn more than enough from your work, your

>work can only get better and better and the energy you put into it

>can only become clearer and more joyful. It's not about fleecing

>people for the highest possible price, it's about paying attention to

>how much energy (in every sense of the word) it takes to envision,

>develop, manufacture, and sell products you LOVE and taking 100%

>responsibility for replenishing and even increasing that energy

>through your relationships with your customers.

Molly, your message was WONDERFUL.

I am reminded of the first Reiki master I knew, back in the mid

90's. Sometimes folks expressed the thought that she should give her

services away. (Sometimes she did. AIDS victims were her 'special cause'

and she treated them and empowered them to treat themselves as a

gift.) But for the rest of us, she charged.

her rationale? If I don't charge, I'll have to go work in an office

somewhere. And I won't be available to use my gifts on people who want

them. One way or another the rent must be paid, and I'd rather it be paid

by my being able to do massage and reiki all day long.

Made perfect sense to me.

And I totally agree with Butch's comments about the expense of growth. I

remember the springtime that we moved Nature's Gift out of my house and

into the building we are now renting. I was terrified. First of all

because we took on a huge load of debt renovating the building to suit our

needs (and wants!... we have one of the PRETTIEST offices I've ever been

in.) And because when it was HERE, the business paid most of my mortgage

and utilities. So the business was taking on a huge extra expense, and so

was I, personally.

It was a scary leap. And now, four years later, I am looking at making

that leap again. Our lease is up next spring, and we've outgrown this

space. So here we go again, looking at finding a larger space, and

renovating IT to suit our needs.

There's all sorts of other expenses with growth. Yes, you hire more people

to cover the load. You add more products, and some of them take 'making'

rather than just pouring, and you have to figure the time involved in

that. And if your inventory doubles, your insurance costs go up. (I know

the property insurance when we move, will be higher, because the space will

be bigger and cost more to insure, for one example.) I just finished

paying all the corporate taxes. And Unemployement insurance, and

liabilitiy insurance, and Worker's Comp in case someone gets injured, and

and and.

I would LOVE to be able to offer health insurance to my staff. but most of

us are uninsurable. I have several part time staffers who are on

disability. Limited in the hours they work and the amount they can

earn. (And what they can do.) That's another dilemma. If I give them a

payraise, I have to cut their hours back, or they lose their disability.

It's a challenge

And I love it!

Over 10 years online supplying Aromatherapy and Healthcare Professionals

Essential Oils, Hydrosols, Accessories, Hard to find Books and Videos

<http://www.naturesgift.com>

April 19, 2006

Butch, when is your Birthday?

Because I could have written the 'graph below

I had it all worked out. My former assistant and I had a contract...she

was going to start buying me out 10 months after I turned 65... I would

'retire'...stay on as a consultant, ... and was cutting my hours back

somewhat turning more and more of the day to day stuff over to her.

That... didn't work out. (I guess she thought she already owned it

... so now I'm back doing her job and mine, with my retirement plans up

in smoke.

At 08:13 AM 4/19/2006, you wrote:

>The other factor(s) is/are Social Security. If you intend to draw it

>where you retire will be a consideration .. and having someone who can

>technically take control of the company is another .. which could be

>offset if you file a joint return. I get the impression you are at or

>near 60 .. I'll be 64 in July and if I take SS now I am big time limited

>on the amount of income I can take without an offset .. I must wait

>until I am 65 and 10 months to be free of the restriction.

Over 10 years online supplying Aromatherapy and Healthcare Professionals

Essential Oils, Hydrosols, Accessories, Hard to find Books and Videos

<http://www.naturesgift.com>

April 20, 2006

This message was GREAT – both Molly and Marge’s part. I printed it and

stuck it on the wall. Molly, you’ve described perfectly the path I wish to

follow with this. And Marge, your story is my vision. Thanks to you both

for the inspiration.

Dave

Ultimately, the earth is a single community. We are all of one blood and

one flesh - we have only to become of one accord to begin to enter paradise.

_____

Marge Clark