Made by Magpie

I had an interesting conversation yesterday with Maggie Stephens proprietor of Made by Magpie out of Austin TX. Maggie’s angle is accessories and most recently, Ipod carrying cases. Here are some notes from our conversation.

So how did you get your start?

My background is in advertising, I was a full-time freelance copywriter but I like to make things. I’d made some fabric flower pins that people really liked, enough that they tried to buy them from me so I started making up a few. My first break came when I wore them into a store and the owner tried to buy them from me. It’s been a couple of years but now I only do wholesale, selling to about 50 different stores across the US and most recently, I started selling in the UK and Dubai.

How do you manage all those sales, do you have a sales rep?

There was nothing like this blog when I started, you put it all out there, line sheets and everything. I had to do this the hard way, I had to learn how to make a line sheet which I then sent out to stores. I don’t have a sales rep, I’ve heard it was a bad idea.

Really? People told you sales reps were a bad idea? Most DEs I know are begging to be picked up by a rep.

I’d heard that they charged too much and that reps didn’t get the sales they’d expected. However, lately I’ve been wondering if I should try it, I could really use the help. I’ve had several sales reps contact me, wanting to represent me.

You had reps contacting you and you turned them down?! Most designers would envy you. Still, I have heard complaints about selling disappointments. In my experience, this is usually due to one of two things only one of which has to do with a sales rep. The first reason is retailer resistance; the designer is perceived as being too inexperienced to produce consistent results and retailers are wary of buying an untried line. They can’t know if the delivered products will actually look like the sample they bought from. Retailers also don’t have the confidence that the designer will actually make delivery and they’ve tied up their OTB (open to buy) in a vendor who may not come through. Come delivery time, the retailer can’t fill an empty slot at the last minute. [All of this is in the book which Maggie did not have but has since purchased.]

The second reason is rep related and is far less common. It’s an ugly secret but some reps are known to use hungry DEs to finance their showroom fees at market (these are usually road reps) and they don’t work to push the products that they never really intended to sell in the first place. One way to prevent this problem is to only take on a rep who has sold products for you before a market. If they haven’t been able to generate sales on the road, you may want to pass. If a rep can sell your product to their existing customers, you’ll have better returns at market. Still, I realize that some DEs are willing to take a risk, hoping for some exposure at market so if you can afford to do it, fine.

Most complaints about reps are related to their work habits and following up with customers. This is why your best referrals for locating a rep are from store owners who already carry your products. Retailers know which reps they like working with and are the best source of a referral for your product type.

How were you able to pick up so many accounts?

I got lucky. I got into Bendel’s and they featured my products in a promotion. I had a lot of stores calling me after that and I got some press too. Another retailer, Olive and Bette’s did the same thing. Both of these stores have in-house PR departments and they have connections to people at all of the magazines so it worked out well for me. In taking my products, these retailers performed the PR function for me.

So tell me about your new venture, the IPOD cases.

Well, last year I was training for a marathon -that I never finished by the way (laughs)- and wanted something to carry my ipod. I didn’t like anything out there so I made up my own. Now I sell those in a few stores and off my website.

[I conferred with Miracle later on the product line and she says the products are priced too low. Competing products -not nearly as cute- are $30-$40; Maggie’s most expensive unit is $25. I mention this because it is common for DEs to underprice their goods. Underpricing can be a problem because a rep may not get the return they’d get when compared to another line they represent. They’re doing the same amount of work and getting less for it. Again, all this and a whole lot more is in the book.]

How are you getting your products made?

The accessories are made right here in Austin by people who work in their homes. That’s worked out well for me. I tried to have the Ipod cases made here but I couldn’t find anyone to do it. As it happens, a friend of my husband’s in Dallas had the connections to make these overseas so I didn’t see that I had any choice. I’m not dissatisfied with the price although I don’t know the whole cost since I didn’t figure in the cost of shipping. I also had to make more than I wanted to meet the minimums.

Would you consider producing locally if you could find the resources?

Absolutely, that’s what I wanted. I’d also like smaller quantities. I’d prefer for the Ipod cases to be more fashion forward with greater variety and faster turnover than I can now. I would love to change my offerings more frequently. I’d also like to make cases to fit the other sizes of Ipods. Currently I’m just making cases for the Nano and I want to do more than that.

Have you thought of contacting leather workers in your area? Your cases need to be die-cut even though they’re not made of leather. Leather workers have “clickers” and can make you some starter dies too (I’ve written of this before). They have the kind of sewing equipment you’d need too.

I never thought of leather workers. It never would have occurred to me!

Boot makers, harness makers, saddle makers -maybe even some shoe repair places- are all good resources for this kind of work. If it’s a product that is small, requires die cutting and uses heavier weight materials and you don’t need a lot of them, these craftsman can help. I know a lot of guys make pet products on the side on a contract basis. You can find them easily in the yellow pages. If you’re stuck for a referral, every town has a feed supply. The bulletin boards at the local feed supply are stocked with all kinds of business cards advertising these kinds of services. I’d think they’d be ideal for product development and faster turn around on small orders. Also, it’s not nearly as expensive as people are led to believe. One caveat. In small shops, leather workers are notorious for their attitudes towards women and believe that leather or die-cut work is the province of men only so you may have to deal with that -speaking from personal experience. I only know of one other female leather pattern maker besides me.

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5 comments

  1. Josh says:

    I love Maggie Stephens story. I love her products and I love the way she has run her business. She’s an inspiration. Her products have that cute impulse buy factor. The website has a stylish charm without being too smarmy.

  2. Beverly says:

    Great post and wonderfully fresh DE!
    Kathleen, you made the comment
    “Retailers also don’t have the confidence that the designer will actually make delivery and they’ve tied up their OTB (open to buy) in a vendor who may not come through.”
    Could you go into how a retailer determines their OTB? I was once attending a talk on the ins and outs of retailing, and I must have dozed off during that part of the lceture! In my own defense, theere was a LOT of info, and I was simply “overwhelmed”. That’s my story, and I’m sticking to it! LOL.

  3. Kathleen says:

    Could you go into how a retailer determines their OTB?

    Oh boy, lol, I could never answer that question but I’d bet money that you’d never find a better example of the 80/20 rule! I forwarded your comment to Miracle. She’ll traipse over here once she has time to answer it.

  4. Miracle says:

    I forwarded your comment to Miracle. She’ll traipse over here once she has time to answer it.

    Oh! I know it becuase of years of accounting classes, so I had to google a more suitable explanation (becuase, as is I only speak in terms of Excel formulas).

    http://retail.about.com/od/merchandisingbuying/a/open_to_buy.htm

    Planned Sales
    + Planned Markdowns
    + Planned End of Month Inventory
    – Planned Beginning of Month Inventory
    —————————————-
    = Open-To-Buy

    For example, a retailer has an inventory level of $150,000 on July 1st and planned $152,000 End of Month inventory for July 31st. The planned sales for the store are $48,000 with $750 in planned markdowns. Therefore, the retailer has $50,750 Open-To-Buy.

    Now keep in mind this formula is crucially flawed because it’s not taking into account profit margins. It would be silly to buy $50K of merchandise to sustain $48K in sales (makes me wonder where that writer got their formula).

    Thus, if you’re working with a 50% gross profit margin, you only need to purchase roughly $25K to sustain the planned sales and markdowns.

    Anyhow, many retailers will not use that specific formula because they have to take into account CASH FLOW.

    This is why delivering on time is so important, not just because a retailer doesn’t want the merchandise late, but because if it’s late, then they may have already shelled out the cash on their other orders. I say this because my open to buy forecasting also includes the cash outlay every month and deliveries are timed as such. And that’s why another pet peeve of mine is DEs who want to ship a month early because they want to get paid faster. Yes, that’s nice, but I planned on paying you NEXT month when you delivered according to my purchase orders.

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