When I started working full time on Tesoro in late 2015, I was full of excitement, joy and hope for my little business. I had a business partner who was in charge of the "business side" while I took on my role as the creative lead of Tesoro. It was my partners job to price the bags, and figure out what we needed to charge to make a profit, however small, off of each bag. When she decided to leave, it was a really tough hit. I had to quickly learn quickbooks, how to do monthly sales taxes, how to budget, run the website, write copy, and so many other tasks that originally fell into her hands. I quickly learned that a lot of the things she was supposed to be doing for Tesoro she had done incorrectly. It was scary and shocking and I had to make many changes quickly.
Two years later as I sit to write this, I do so with a lot of gratitude to all of you amazing humans who have supported this business. You are the reason I am here, the reason I get to do something I am so passionate about. Over the past few years my skills as a leather worker have grown, and I am lucky enough that my skills as a business women have grown as well.
As I sat down after my break this year I did something I have been putting off updating for about two years. My COGs sheet. My fellow business owner friends will know all about this, but if you don't, a COG sheet is where you write down every single thing it takes to make an individual product. It takes hours and makes my head spin. I hate excel and spreadsheets and anything to do with math. lol. But it was time. And after I looked at the numbers, I knew something for sure that I had predicted. I am undercharging for my products.
So, for the next 10 days all the products on the website will remain at the prices they are currently listed as. This is to give you a chance to purchase a bag at the cost they are priced at now. After that, all the prices will be raised by 10% across the board.
This is a really difficult decision for me to make, because I pride myself in bringing you products that are fairly priced. That is still an integral part of this business and I will always do everything in my power to keep my products affordable. If you have any questions at all, head over to my stories and ask away in the question box. I will post responses to the questions publicly to try to be as transparent as possible!
This week we will be breaking down a few reasons why raising our prices is right for us on Instagram and facebook, or you can just head over to our blog to see it now!
Thanks for your support and understanding as we make these changes!
This week we will be breaking down a few reasons why raising our prices is right for us!
1. Inflation is real y'all. Our leather prices change here and there, and although not every single leather price has changed, some of our (and your) favorite ones have. I also often have to purchase some of our more expensive hardware at lower quantities because I don't have the cash flow to buy in bulk. And because of that, the price of hardware can vary.
2. It probably won't come as a shock to many of you that when I got started, I wasn't timing how long each bag took to make. Thats because I wasn't really paying myself an hourly wage. Well in late 2019 I hired Tran, my first ever employee. She was with me fro about 6 months. She left because of a move with her longtime partner to Baltimore. I didn't rehire anyone right away, which turned out to be a good choice, because COVID, but in July of 2020, feeling totally burnt out and overwhelmed, I hired Alexis, my current employee (more to come on her!). She’s s not quite full time yet, but she is getting close, and because of that, I really had to sit down and reevaluate my prices with the cost of labor full included in the equation.
3. Over the years I have invested in machinery and equipment that have greatly improved the quality of each Tesoro bag. Although I don't bake these machines directly into the cost of each bag like some companies might, the overall improvement of the product does deserve a boost in price. I will be working to make even more improvements on my best sellers this year, and those improvements cost money too!
4. Since I closed my retail store, there are a couple of new things to consider. When I had my shop, acquiring new customers felt easy. They could come visit and see the bags in person, they could come to a workshop and learn about leather working, and they could come to big parties and events to feel like a part of the community I have built. Since closing the shop, it has become more difficult to acquire new customers. And the only way for me to do that is to pay a lot of money for ads on social media. This is also something most companies would bake into their COGS (or Cost of Goods Sold).
5. The other thing I have to take into consideration with closing the store is that the best way to get my bags physically in front of people is to wholesale them to boutiques. This is an entirely new thing to me. After looking at many of my bag costs, I realized that wholesale isn't an option at all for me. When you purchase something at a store, the store owner most likely purchased something at a wholesale price, and they then marked up the price 3 times to get the retail cost. Right now, if I divided my bag cost by 3 and sold them at that price, I would loose A LOT of money on each wholesale sale. I am not trying to become a wholesaler at this very moment, but it is something for me to consider.
6. I want to make improvements! Each bag is well made already, but there are a few things I could add to make them even more spectacular. This includes each bag having feet, some custom hardware, and even better leathers!
Thank you so much for checking in and reading this. If you follow us on social media, I will be answering any questions or concerns you might have on Instagram and facebook on Friday!