Originally Posted by mardi
Prices are higher, and fabric is a luxury not a necessity. Though everything is costing more, small shop owners are feeling the pinch as well as their customers. Many are trying to keep their stores open and are combatting larger retailers, not just Joanne's, but on line stores that have none of the overhead costs a small local shop has...
Please let me try to correct your incorrect impression of online stores if you will...
First, over 90% of the quilting fabric sold in the USA is sold by several large chains and several large online stores; notably JoAnne, Beverlys, Wal-mart, Ben Franklin, fabric.com (a subsidiary of Amazon.com), Keepsake Quilting, Hancocks, and a couple others.
This leaves the thousands of Mom&Pop and Mom&Mom LQS's and small online stores, i.e. "the independents" competing for the other 10% of the market. Many of the remaining online stores are run by people as an extension of their B&M stores.
Second, an online store has different, but not necessarily lower operating costs than a brick and mortar (B&M) store. While B&M stores are paying more for store-front rent in many cases, it's not that much cheaper than warehouse space rent. As far as wages go, there are additional and expensive skillsets needed to operate a web store, like web developers at anywhere from 60 to $150 an hour and a lot of specialty packaging and shipping equipment as well as lots of computer software, huge security checking fees, software licenses, hosting fees and other expenses not found in a B&M store. We also pay exactly the same business license and incorporation fees to the state and county as does JoAnne or Wal-mart.
Additionally, online stores pay higher merchant processing fees than B&M stores for credit card processing, typically 1% or more higher, and since literally all of our business is done by credit card, the total fees paid add up to a lot more expense.
If you operate a web store in a residential area, like we do, shipping costs are higher. We typically pay 15 to 30 cents more a yard for fabric delivery, delivered by the same UPS truck, as the quilt shops a few miles away, because our area isn't zoned commercial. One of the reasons we don't offer UPS or Fedex shipping is because of the huge residential area pickup fees charged by those carriers, that would have to be passed on to our customers.
If you are going to make a successful online business, it takes years of hard work before the search engines find you, and that's what drives most of your business. There's very little impulse buying in an online store, and there's no guilt in walking out of an online store like there is with walking out of a B&M, so for every sale in our store we see hundreds, even thousands of people "walk" through our store. People are also ruthless comparison shoppers online, much more so than in your B&M stores.
We've been building our online store for over 3 years now and have yet to take a dime out of it. We've also put much of our savings into it. Someday, if we don't burn out first, we might be able to supplement our fixed pension income, or make it successful enough to be able to sell the business. That's our hope.
Anyone who thinks they're going to get rich overnight by selling fabric on the internet is in for a rude awakening.
But at least Cindy gets her fabric cheap. :mrgreen: :mrgreen: