The pandemic means the business rule book is gone and we’re making it up as we go, handbag company owner Suzie Eggleton says.
Eggleton, who founded vegan handbag brand Velvet Heartbeat in 2017, said almost everything has been a surprise since the onset of the covid pandemic.
Small businesses have had a rough start to the year. The Xero Small Business Index released on Thursday, which measures small business sales from Xero’s data, found small business sales were flat in January with a 5.1% drop in retail sales.
It also found small business confidence had dropped.
Eggleton said it's hard to plan when you can’t predict what the next year will be like. Pre-pandemic, Eggleton said she could set goals such as doubling revenue and think about the best ways to do this - but now there is no format to follow.
“Luckily I experienced some really nice growth near the start of the pandemic. I had recently stocked up on materials and people were excited about supporting New Zealand made so it felt really right place right time.”
Another bonus was securing a first shipment of cactus leather just prior to the pandemic, which Velvet Heartbeat was among the first in the world to start making accessories from.
“This gained me some international attention to those looking to purchase accessories made from the new textile.”
Velvet Heartbeat’s bags are handmade in Auckland. Fashion industry veteran Eggleton designs the bags, and she has a part-time assistant who helps with fabric cutting and administrative tasks.
Eggleton said everything has become more expensive for the business in the past few years.
Shipping and materials have gone up significantly. The bulk of the materials Velvet Heartbeat uses are imported, so Eggleton said there is a strategy in what to order and how much to make the shipping costs worthwhile.
As a result, prices for Velvet Heartbeat’s bags have risen.
“It was inevitable even though I held off as long as I could, and people understand. I think we all accept that everything costs more these days, hopefully it can even out at some point. We have returning customers we haven’t frightened off with price increases, so as long as we don’t make any outrageous jumps I feel confident when we need to adjust things.”
Eggleton said she worked hard to get the balance between good pricing for the customer, covering the costs of ethical production and having a profit margin that ensures the business is sustainable.
“It can be a real struggle and I know other brands have a higher profit margin than us, it’s something to work on all the time.”
She said some of the costs are non-negotiable. Materials have to be of the highest quality Eggleton can find and ethically produced, and the team must be paid above the living wage.
“Knowing exact costs of everything is really helpful to see where things can be pushed or squeezed or if our pricing needs to change at any time.”
Online has been great for getting the product in front of eyeballs throughout the pandemic, while being stocked in store gives consumers a chance to feel and eyeball the bags in real life.
“There is a perception that nothing will be as good as leather so it’s always a thrill to see people light up when they see the textiles for the first time.”
Despite the many challenges in the economic climate, Eggleton said she is confident the business will grow again in 2023. Although, it may not be as fast as she would like.
“I think I’ve far exceeded my expectations, I started out just wanting to make some lovely bags and accessories using faux leather and it evolved into building ethics and sustainability through every facet of the brand. I’m so privileged to work with some of the world’s most innovative textiles and I truly love my job.”
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