My most recent folly - Starting a Leather Goods business

Why won’t I be able to sell the products I make for R 27,000?

The first and most obvious reason is of course brand. LOUIS VUITTON can sell a snotrag for more than what I can sell my car for, because it has their logo printed on it. Why this is so is probably something entire libraries can be written about, and I reckon has to do with something deep and dark inside the (mostly female) human soul. I’m not really up to fully analysing it. One particularly sordid reason is that they can sell it at that price simply because it is so expensive. A girl can whip it out and wave it around, and know that everybody knows that it must’ve cost a fortune, which was the only reason for having bought it in the first place. LOUIS VUITTON cannot sell a high quality low cost handkerchief, because that would destroy the reason for their existence.

That begs the question, how did they arrive at the situation where everybody knows it will be so expensive? Sometimes that happens because of years of supplying genuinely superior product at a premium price – Mercedes Benz, Rolls Royce, that kind of thing.

But most often that is not the case, and happens just because of a combination of bullshit, good luck and a carefully cultivated choice of friends. If I could persuade Charlize Theron to carry one of my items to the Oscars, I could probably bump the price of my products by about 1000%, for instance. I don’t know her that well, however. And since I’m not in Europe or the US, in general this particular avenue is not open to me.

Another difficult one is artistry. I cannot throw a bucket of paint onto a canvas and sell it for R20,000,000. Van Gogh can. Why? Well, he is Van Gogh, and he has a persona extending well beyond any one of his individual pieces of work. He had something genuinely profound to say, in a way which was profoundly and inimitably his. You are not buying just the painting, you are acquiring possession of something that was in some way part of everything that was Van Gogh. But again, before that could happen, he first had to actually become Van Gogh – and that took something special.

Which brings me to imitation. Should I make a replica of the Chloé bag of my previous post, it will be exactly that. No matter what the quality, even if it is of a better quality than the original, it is still an imitation. The original contains a spark of creativity which my imitation lacks. In my particular world view, that somehow earns the Chloé bag the right to be more expensive than my imitation. Besides, think of WHY people make that kind of purchase. I can just imagine some girls chatting: “Hey, look at Joanne! She couldn’t afford to buy a Chloé bag, so she bought a cheap imitation instead!”

(Hey, just thought of something. How would you distinguish between an imitation and an original Chinese product? The imitation will be of a much better quality!)

And so on to Quality. Is quality really something people value? In particular people who buy R500,000 handbags? (There are those, too). I mean, I can’t think that that kind of person (Paris Hilton?) will look at a handbag and think, ”hmm, good quality! I’d still be using it 20 years from now!” They would typically purchase a handbag for a single season or so, and maybe use it 3 or 4 times in total. They would rather die than to be seen with last season’s handbag. Durability becomes an entirely misplaced attribute, then, and something older than a year is fundamentally useless. There is no sense in manufacturing it as a quality product, then.

I cannot think in that way. I have this unfortunate weakness in that I need to do something to the very best of my ability. In fact, I think that people can generally be divided into those who have an appreciation of quality, and those who have no understanding of it whatsoever. So for me, the people I would target as possible clients would be those who have the ability to recognise quality, who would buy items because they could use it for 20 or 30 years – and unfortunately from a commercial perspective those also seem to be the more honest kind of people, for whom you would need to charge an honest price, and also low turnover clients – they’re not buying your product in order to replace it in the very near future, for chrissakes!

I was always attracted to working with leather. Or all things ‘natural’, such as wood as well. Not because I’m a tree hugger (well I am, a bit), or opposed to technology (in fact, I believe that the more advanced the technology, the less visible and intrusive it becomes) but because there is something aesthetic about taking a non-uniform, hugely variable material and shaping it into something which is a perfect fit to its intended purpose. It is also a minimalist kind of thing, which appeals to me – expending no more than exactly the minimum amounts of energy and resources.

Okay, so the good things about starting a leather crafting setup:

• You don’t need any dedicated workspace, such as a workshop or a studio or a kitchen or whatever. If you live in a one-bedroomed flat, you’d still be fine.

• You need only the most rudimentary equipment. A scissors is about the most complicated tool you’d need. If you do in fact need one, I don’t know yet.

• Therefore, you’re almost independent of an electricity supply. They can loadshed every damned day without impacting on your operations.

• There is no sell-by or use-by date on either your supplies or your product. The logistics of stockholding is therefore almost nonexistent. And if you don’t sell an item today, you can sell it tomorrow, or next week, or next month, or next year...

• Because of the simplicity of your tools, there is almost no overhead in initial tool-up. In many start-ups, it is the case that the overhead will be the same irrespective of if you start with one person, five people or twenty people. So you have to tool-up for 20 people even if you’re the only one initially involved at all.

• And consequently, the cost of failure is also negligible.

• And expanding really boils down to just training someone.

• And because you are not dependent on expensive imports of machinery and raw materials, it is decoupled from fluctuations in the exchange rate, and exporting does in fact become more profitable as the Rand dives into oblivion.

• I have this perhaps mistaken belief that marketing leather is easier than most other things – that leather goods lean more towards things such as food and clothes, rather than to purely luxury items or grudge purchases, and is therefore to a large extent almost self-marketing. Maybe I’ll burn my fingers with this – we’ll see.

So there you have it – the ideal enterprise to start: Minimum risk, huge growth potential and, if you get it right, the possibility of huge profit!

I needed to think a bit about why not everybody is in it.

I suspect that, by and large, most people are not comfortable with making things. For instance, it is a trivial thing to hang a door, but almost everybody will get a carpenter to do it. That applies even to people who make things for a living when something is outside the scope of what they usually do – e.g. even a plumber would probably get a carpenter do hang a door, rather than to do it himself.

I don’t know why this is so, but maybe it is because most people shy away from actually being innovative? Just pulling a figure out of a hat, here, but I reckon maybe 999 out of every 1000 people would rather follow already established guidelines than to try something outside of their established and fixed behaviours, which they usually inherited from someone else. Maybe this is also why there are so few artists – many people probably have the required ability, but most shy away from being confronted with having to produce something new and unknown every single day.

Anyway, when I was small, I used to build model boats and aeroplanes and stuff. Very few other kids did that, they preferred to push toy cars around.

For me, personally, it is also a case of opportunity. I’m not currently forced to generate an adequate income – I have the opportunity at the moment to invest time into something that may not be immediately or even ever profitable. That is as opposed to someone who must allocate all of his available time to earning sufficient money at minimum risk to pay his bills. Or who would prefer spending his evenings and weekends in pubs, at braais and in front of the TV.

The above also takes care of “another person doing the same”, except that in addition, and as mentioned by yourself, I would hope to be able to, and believe that I can, produce things that have just a little bit of un-copyableness about them, in a unique and appealing way. Also, the kind of person who is always on the lookout for financially successful activities in order to do the same is typically not the kind of person who wants to spend a lot of effort on anything – they want the money without having to do the work, which won’t work, here. Furthermore, I DO believe that I have a feeling for handiwork somewhat superior to most - just because I think it is easy does not necessarily mean that others will perceive it as easy too.

In summary: The barriers to entry - mostly conceptual but maybe substantial.