Wednesday, August 27, 2014

Market Gossip

The other day I got a newsletter from my LNS with a bit of a rant about a market exclusive. Some patterns were available only to shop owners who attended market. They were supposed to wait until the market opened and race over--literally--to place their orders for the limited edition kits. One shop owner flouted the rules and placed her order for all the kits a particular designer created just before the start of market.

It might be unseemly, but I'm not entirely sure this shop owner's actions are illegal or even unethical. All's far in love and war and cross-stitch. It's a business after all, and if you can get a jump on your competitors, why not? On the other hand, designers don't really want to be angering their middle-men.

Market exclusives are a way to get people to attend market. Mary Agnes of Needle Nicely has written thoroughly and convincingly about the costs to small business owners of attending market. So you can see why the industry needs to offer a special draw. And when she says that needlework shops are small potatoes in the world of small business--currently defined as under $7M in revenue--consider that "cross stitch stores' average gross sales increased from $131,000 in 2004 to $156,500 in 2009." That's from a 2010 industry report (pdf). (And because Mary Agnes has a needlepoint shop, let's compare apples to apples: "Needlepoint stores' average gross sales decreased from $221,000 in 2004 to $169,000 in 2006, and then went back up to $192,500 in 2009.") That's just minuscule in the small business forum! (Remember it's gross not net.) This reminds me of a Sayre's law: "In any dispute the intensity of feeling is inversely proportional to the value of the issues at stake...that's why academic politics are so bitter." Henry Kissinger will tell you he came up with this concept; I will grant him brevity: "University politics are vicious precisely because the stakes are so small." And now we can add needlework to the mix. 

Market exclusives bring shop owners to the market, but are market exclusive kits a good idea?

  • They can't be that good for designers: they're only going to make a limited amount of money on their design. It will all be up front money (as opposed to a designer who is still getting small royalties on a pattern she designed eight years ago) and a dollar today is worth more than a dollar tomorrow, but it will dry up quickly.
  • It's not good for shop owners who simply can't afford to attend market. They are going to lose money to the shops who can attend.
  • Now it's not even good for the shop owners who do attend market (and play by the rules). *NB the designer is helping the shop owners fulfill preorders they had received thinking you know they'd get a couple of the kits.
  • Are they even that great for us as consumers? Do exclusives make us buy without thinking (better for shops, not so good for us)? We've all seen what can happen to oop charts on E-bay: prices shoot through the roof (not so good for us, and not good for designers who don't get that money). Does exclusivity have any kind of benefit for consumers? If the answer is yes, why aren't we all making up our very own patterns--the ultimate in exclusivity?
The industry has tried to mitigate some of the drawbacks for shop owners by making "exclusivity" a limited-time deal. Shop owners who come to the market get first dibs. A month later shop owners who didn't attend can order the pattern for their customers. But is it worth it?


Linda said...

Interesting Nikki.


Samplings from Spring Creek said...

All this makes me sad! Can't we just all get along and enjoy the precious time we have to stitch?

Raychill Canuck said...

So, a couple questions/points:

1. Is this only good for the organizers of the market? Than why do the designers agree to this? What is in it for them?
2. If designers agree to this when it's not a good business decision for them, I find it hard to sympathize when I hear complaints about how hard it is to make it this business.
3. We could be missing why it's good for designers. Can anyone think of how it could be good for designers?

Vonna, The Twisted Stitcher said...

You have thoroughly put in words what I've thought about all along. I followed the drama of the designer/exclusive/sold before opening on FB the Friday night the St. Charles Market opened. I agree with all you've said and in my mind, it cannot be good for the designers because they can only produce a limited number, therefore only making a limited profit. I think its the middlemen that are getting the profits, because as you say: it will be bad for the actual hobbyists who have to purchase months/years from now on eBay for that one exclusive pattern...well done!

Kerri said...

Very we'll put. I totally agree that all this drama is never good for the end user and I do buy things that I may not want because of the "limited" stigma.

But this also extends to the teaching pieces that are never released to a broader market. I never understood that logic since how can you make a living teaching to an ever dwindling population that is now aging and won't be able to travel the country for your exclusive designs. It really is a huge turnoff for me.

Donna said...

I say pooh to limited edition stuff. I once bought an expensive kit being touted as a limited edition. Today, seven years later, you can still buy this kit.

Now, the teacher thing I get. Maybe it's because I know so many. Many teachers demo parts of their class - especially the parts where it's difficult to explain in words, but easy enough when you see it.

All food for thought.

Susan said...

Great post, Nikki. I don't understand the thinking behind the market "exclusives" as I don't understand why a stitcher wouldn't be able to wait for a design to be released to the general market. Many of us have very generous stashes and can find something to stitch while we wait for that "must-have" chart.

Needle Nicely said...

Nikki, Thanks for the mention in this post. As a shopowner, I must vote in support for the market-exclusive offers. The designers need to find ways to market the markets since they are expensive for both exhibitors and buyers.
Admittedly, I have a seasonal shop and my customers are oblivious to when I go to market or what I buy there. Also, I have an unusually large needlepoint inventory. However, there are shopowners in year-round stores who have customers at the door the day the owners return from market salivating over the new market purchases. More power to them.
I'm happy to wait a month or in this Dallas market case, until January for delivery of my canvases (I can order them now for delivery in after the January market). Sorry for the dissertation!

Beth said...

I think it is fair that the LNS who take the time and money to travel to market are 'reward' with market exclusive offers and a 30 days 'Head Start'. The point of the market is after all interaction between designers and shop owners - if they have to entice owners to attend, then so be it. I confess to being attracted to the allure of 'market exclusive limited edition' stuff. I don't often buy it, but it does give me reason to read the posted market updates.

Nina said...

As a consumer I had no idea of this. You put the issue very well and provide a lot of thinking points. Thank you always for giving us food for thought.

Jo who can't think of a clever nickname said...

I was unaware of any furore over this issue but I have to be honest, I tend to ignore the Market Exclusives because they are not relevant to overseas stitchers.

I do think that designers are sacrificing long term income in favour of a short burst of interest. They might sell several hundred copies of a design within a week of market but that will be it, Whereas a slow burn design will be still be selling years later and bringing the money in. And be available it overseas stitchers too LOL