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The Bargain vs. The American Dream: Small Business Ownership

The Bargain vs. The American Dream: Small Business Ownership

Stories and names used in this post are fiction, though they are based on real life experiences. Every so often, I see someone really excited about the thought of opening their own cloth diaper store, or other small business. I get it. It’s “The American Dream.” I’ve also heard complaints about product prices, talk of buying well…anywhere but from small businesses, and references to brands as “big” when I know for a fact that they are not. Ex: “They’re a big business, they can afford to cover return shipping.” or “They’re a big brand, they can afford to honor this price mistake for everyone.” Starting a business isn’t that easy, and the successful stores and brands have worked incredibly hard, and taken risks to get where they are today.

In the past 7 1/2 or so years, I’ve seen a lot of businesses come and go, I’ve seen a lot of struggles, and I’ve vowed to shop small even more than I already did. So what exactly is “small?”

People often think shops/businesses are a lot bigger than they are. Many are run by a single person or husband/wife team. They need to put forward a professional business presence so that they appear reliable and trustworthy, yet they also need customers to understand that they are a small business and don’t have the same resources as a large brand or store. (See this definition of small businesses and know that it’s rare for anyone in this industry to meet/exceed those guidelines.) Many customers have become accustomed to the free shipping both ways that big retailers can offer, and don’t understand that a small retailer would lose money on an item if they did so. Wonder what being a business owner is really like?

Positives of owning a business:

  • Work for yourself
  • Make your own hours
  • Fulfill your dream

Downsides:

  • Can’t clock out and go home. Many business owners find it really never stops, particularly with email, smart phones and social media
  • If the hours you set yourself don’t match what your customers want, you’ll have to change them to make your business work
  • No set paycheck; it could be years of growing your business before you pay yourself anything substantial
  • You have to pay all your own taxes, including self-employment tax, since an employer isn’t paying their share of your social security/Medicare contributions
  • No paid vacations/sick days. If you manage to take a vacation, you’ll probably still be working
  • No contributions to your 401k by your employer
  • Success or failure is all you. It can be very stressful

Business owners have to make sacrifices and choices in their lifestyle. Do they try to run their business while working full time, or do they quit their jobs to run the business full time? They may be putting retirement and college savings on hold to provide basic necessities for their families, or even moving their family across the country to decrease their cost of living. You may be thinking that a brand or store owner in the cloth diaper/natural baby industry is getting rich & buying vacation homes, but you’d probably be wrong.

Though that single cloth diaper seems expensive, manufacturing in the USA is expensive, and there are usually huge minimum quantities required to even produce products overseas. Brands who sell both retail and wholesale have to cover the cost of production and business, but still make a profit for themselves, while allowing a profit for their retailers. Quite often products are priced as low as they possibly can be. Making a change to the product? Enjoy another setup fee, designing and printing your new packaging and promotional materials! Lots of brands and online retailers are not only a small team but are also working from their home offices and storing products in their makeshift garage warehouse just to keep costs down.

When you shop small, either online or locally, you can receive personalized education and often get in touch with the owners directly. In person, you can touch and feel products as well as attend classes and receive personalized recommendations. Most brands these small businesses carry are items they have tried and love themselves.

When talking small businesses, Amazon is a difficult subject. Some customers will come into a shop and receive personal assistance in choosing an item, only to turn around and order it from Amazon to save a buck. Many retailers will not carry a brand that’s also sold on Amazon or in a “big box” store like Target.

On the flip side, for a small manufacturer (or retailer, if brands they carry permit Amazon sales), they may feel they can’t survive without Amazon. Amazon allows them to reach customers they never would on their own. So many people check Amazon; some even check prices while in a store. A potential customer may see a product as a “related item,” who otherwise may not have found the brand. On the other hand, the fees can get expensive and returns are very costly. Some customers even send back sets with missing items and the brand still has to bear the cost of the product and return.

Due to commingled inventory, you could potentially end up buying a counterfeit item on Amazon. If all items with the same UPC are boxed together, someone picking your Amazon order could grab the counterfeit with the same UPC rather than the legitimate item sold by the store from which you purchased. Certainly watch out for prices that are too good to be true, or stores with low ratings, but know that you may not receive the item sent to Amazon’s warehouse by the shop you choose.

Amazon isn’t the only competitor of small businesses. Almost anyone can quickly set up a shop and start selling products. If it doesn’t succeed, stores often close and deeply discount, causing a rift in the market, as other shops try to compete with those prices. Other “hobbyist” store owners have done things like selling product they don’t actually have, then disappearing off the face of the earth. This can make customers hesitant to buy from other online shops.

Owning a business is a constant stream of decision making.

What to stock and how much? That product that was selling so well these last few months is now just sitting. The manufacturer is allowing a 20% off sale, but if I do that, I won’t make any money. Well, at least I’ll move it. It’s hard to have so much money tied up in inventory.

Speaking of money I need to pay my quarterly taxes. Oh and my health insurance premium. Better remit my sales tax for the quarter too. Shoot, my business insurance is due and so is my annual business license renewal. Guess I’m not going to put anything into my retirement account. Maybe next year.

Brick & mortar stores also have rent, electricity, fixtures and more, in addition to the website, advertising, shipping etc. costs of online retailers. I’ve heard of shop owners standing in their store all day only to sell $50 worth of product.

They aren’t always sure they’ll make it.

Susie is working on getting things set up for her shop’s cloth 101 class that evening. She doesn’t charge anything, but always hopes attendees will buy something either that day or later on. Last month she saw someone checking prices on their phone while the class was wrapping up and attendees were mingling.

Susie hears her stomach grumble and looks at her watch. “1:30 already! I’d better eat my sandwich”, she thinks. She hears the bell on her door jingle and looks over. It’s a couple looking for a baby carrier. Susie spends nearly an hour talking about baby carrier types, brands, and prints, as well as demonstrating how to put them on, and helping both parents try their baby in each one. When they’ve seen and heard it all, they say they haven’t decided yet. As they are leaving, Susie hears them mention the 20% off coupon they have for Buy Buy Baby, and that they sell the same carrier.

She heads back to her laptop and checks her online orders. Her customer who was “team green” must have given birth because she just ordered three pink diapers! Susie gathers up the diapers, and before she prints the label, she handwrites a congratulations card and tucks in a sticker for the new big brother.

The door jingles again and in walks an expectant woman with her mother. Her friend uses cloth diapers and told her she had to stop by Susie’s store. She spends some time showing them cloth diapers and the Grandma-to-be is amazed. They leave with the promise of attending tonight’s Cloth 101 class to learn more. Susie smiles as her stomach growls again (whoops, she still didn’t get lunch) and thinks, “Yep, this is why I do it.” As she closes up shop, she checks her email on her smartphone and sees an email from her cousin, who lives two streets over. She’s registered at Target for her new baby. Susie taps the link and scrolls through the registry. Half of the items are available at her store. “If my own family can’t support my store, how will I ever make it?”

Quite often, they don’t.

At a downtown store front several states away, Denise was putting her shipping supplies in boxes. She’d hoped that her move across the street last year would increase her foot traffic & help her get out from under the loans she took out two years ago to keep the store open. When her landlord told her he was selling the property, that the new owners were taking over the commercial space, and she’d have to be out by the end of her lease the next month, she decided to cut her losses. She’d been running her store closing sale in-store only so she wouldn’t hurt other retailers, but as she looked at all the inventory she still had, she wondered if that was the wrong choice. After all, when another shop had a neverending “store closing” sale, her customers bought there. Why wouldn’t they for 40% off?

She heard footsteps and looked up to see Jessica walk in with a sympathetic look on her face. Just 6 weeks ago, Jessica decided that the diaper bags Denise sold were too expensive, and bought a knockoff for $8 less. Jessica had finished her chatter about the store closing so Denise looked up from the frayed strap on Jessica’s diaper bag, took a deep breath, and delivered the carefully rehearsed speech she’d given to so many customers upset about the store’s closing.

A few weeks ago, Jessica had posted in Denise’s store-sponsored online group about very inexpensive diapers she’d ordered directly from China, where many others chimed in and asked for the link & details. Denise was hesitant to remove anyone from the group, but this was on the heels of Jessica posting about buying items from Target that Denise sold in the store. She’d decided rather than removing Jessica and causing a backlash, she’d close the comments. Even that didn’t go over well. “Oh well, it doesn’t matter now,” she thought.

Denise focused and listened to what Jessica was saying. The amber necklace she’d bought from an overseas shop wasn’t doing a thing for her baby’s teething. Denise knew exactly why. Another customer had brought hers in, and it turned out to be glass. Denise had spent hours doing research on the best quality amber that was made under fair employment conditions, but when word got around about the cheap versions, her inventory just sat.

Denise said goodbye to Jessica and wondered what she could have done differently.

Want your local businesses to stay there? Shop with them. If you receive personal service, buy there. Taking their time with no intention to buy is taking money directly from their families. If you’re attending a free class or gathering, consider buying a small item while you’re there.

Don’t take this like I’m trying to make you “feel sorry for” small business owners. You’d be right if you said they chose it. That said, people do not start a business in this industry because they want to get rich. They do it because they are passionate, they believe in something, and they want to help people. Many would be thrilled to just make enough to squeak by, but more than one business owner has taken out loans simply to keep their doors open.

Here is a partial list of cloth diaper/baby shops that have closed in recent years.
Note: This list was gathered by listing names of businesses known to be closed, as well as checking a list of retailers I compiled previously. If they did not have an active website, they were presumed closed. If I’ve made an error, just let me know.

Baby Green Sprout
Banana Peels Diapers
Basic Baby
Be By Baby
Best Green Things
Better Cloth Diapers
Bippy Diapers
Bum Covered Diapers
Champan Hill Baby
Chic Cheeks
Cloth Nook
Diva Diapers
Doable Diapers
Dream Diapers
Earthy Crunchy Mama
EC Baby
Eco Babies
Eco Baby & Home
Eco Baby Products
Eco Chic Baby
Eco Chic Boutique
Ecopolitan
Eden’s Baby
Fancy Pants Diaper Boutique
Fern Leaf Boutique
FiddyFuzz
Fluff N Stuff Baby
Giggling Green Bean
Gnome’s Naturals
Green Baby Elephant
Green Baby Goods
Green Diaper Demos
Greenberries
Grow With Us
Happy Cotton Tails
Hip Bottoms
Hopper’s Baby Haven
Jack Be Natural
Joyful Giraffe
Little Earth Babies
Little Green Pumpkin
Luvaboos
Marshmallow Legs
Minnehana Diaper Co
Mod Baby
Mombecks
My Baby First
My Baby Pumpkin
My Baby Wears Cloth
My Livy Lou
My Mommy Store
Natural Pure Essentials
Platonik Babies
Punkernoodle Baby
Ribbons n Stitches
Rocky Mountain Baby
Simple Baby
Simple Little Baby
Snooty Booty Diapers
Soft and Cozy Baby
Sweet Angels Diapers
Sweet Cheeks Diaper Company
Sweet Peach
Sweet Violets Diapers
Teeny Turtle
The Baby Grocery Store
The Cloth Diaper Shop
The Green Pampered Baby
The Nest
The Stork Warehouse
The Teeny Turtle
Tinkle Tinkle Toot
Trendy Eco Baby
Tummy2Bummy
VIP Baby Bum
We Love Cloth
Weedle Weedle
Whippersnappers Boutique
Woodland Babies

I have to add a bit more This article was really inspired by my post about “big” brands originally published on the Kelly Wels blog years ago. Here, I mentioned hobbyists, and I noted that “big” guys are probably not big, but I don’t think I said it enough. Take a minute and think of the “biggest,” most successful cloth diaper store you can (there are quite a few of them). Ready? Most of them have a small team. 10 people or fewer. They are the people I talked about in the beginning. They didn’t become a success overnight. They took huge leaps of faith and may have even put themselves at risk of financial ruin if things didn’t happen the way they’d planned. It’s not a hobby for them. They are personally putting 60-80+ hours a week into their businesses. You can email, call or message and you’ll probably hear back from the owner. Even these successful businesses are affected when customers go into their sponsored groups and talk about buying from Target instead of them. Brands suffer when people turn to black market products and copycats infringing on their intellectual property. While I wish every shop would succeed, the truth is that many will not. I’m not telling you to shop small because you should feel sorry for them, or because they’re moms. I’m telling you that if you enjoy free classes & events, or you like the personal service, if you like the shop period, and want to see them stay, shop there. That’s it.

Go stop by that family owned coffee shop. Grab a pastry from the bakery across the street. By shopping small, you’re not putting money in a corporation’s pocket, you’re contributing to your community.


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Maria Moser
Maria is the mother of 3, writing about cloth diapers & going green. You'll often find her juggling her preschooler and typing 1-handed in between sips of cold coffee. Maria works with many companies within the cloth diaper industry and beyond, providing social media management, product development and other services.
16 Comments
  • January 26, 2017 at 6:14 pm
    Reply

    Maria,
    Thank you for writing this. Although it hits so close to home it makes me cry, I appreciate knowing that at least someone else understands the reality of our world.

  • Geri Fink
    January 26, 2017 at 2:03 pm
    Reply

    I have what some people would call a full stash from a few of those companies. None of my WAHM companies make diapers anymore. One of the only stores I still follow is struggling. In cloth I’ve been around awhile, but really it’s only been 6 years. That’s not really a long time in the real world. Sad. Thanks for writing this Maria!

  • Rachel Ethridge
    January 24, 2017 at 10:12 pm
    Reply

    I was shocked to find that many of the WAHM shops on Hyena Cart are no longer in business and even GoodMama has gone under!

    • Catherine
      January 25, 2017 at 3:40 pm
      Reply

      GoodMama WHAT!?! Wow, so sad. And a perfect illustration of what this article explains. Fair wage,USA made, quality, innovative product but hey let’s get it cheaper somewhere else…

  • January 24, 2017 at 9:39 pm
    Reply

    FYI: Little Monkey Store has NOT closed. It has been opened and thriving since 2009.

    • January 24, 2017 at 9:54 pm
      Reply

      Removed it! Must have been an error in the URL I had in my records. Thanks!

      • January 25, 2017 at 11:44 am
        Reply

        Thanks Maria!

  • January 24, 2017 at 1:46 pm
    Reply

    This article is completely accurate. Great job.

  • January 23, 2017 at 6:59 pm
    Reply

    Two more to add to your list.

    Soft and Cozy Baby
    Luvaboos

  • January 23, 2017 at 5:06 pm
    Reply

    So many closures, man that makes me sick to my stomach.

  • Wendy Browne
    January 23, 2017 at 3:11 pm
    Reply

    If I had more of a budget, I would support small local business. I do buy WAHM made when I can and buy the Sunbaby otherwise. *shrug*

  • Cat
    January 23, 2017 at 2:33 pm
    Reply

    I am in western South Dakota, we had a small seller, she mostly sold at local events like the seasonal consignment sale and similar shows, and some online. Once you knew her we could message her and buy directly by setting up a meet for what we wanted. Her husband was getting out of the military so she chose to find a full time job and closed her “shop”
    We have recently had a new local shop open a brick and mortar baby boutique, but I wish they had asked more about what products we would like to see locally, one brand I can think of will give boutiques coin purses to give out when they sell bags that you can’t get if you buy online, I love this brand and would be excited to see them in store. They also don’t carry any cloth diapers at all, but I am in need of more inserts, maybe some flats and am not having any luck on the local swap, but they do have the entire seasons line of an organic cotton clothing brand.
    They also had a lot of the highly sought after muslin swaddles that a very popular carrier brand started last year, but a lot of the locals don’t know what they are, but this store doesn’t have a website yet, so I can’t help them out by promoting them to a friend somewhere else that might be looking for them.

  • Melissa C.
    January 23, 2017 at 11:27 am
    Reply

    Wow, I didn’t know JBN was closing down 🙁 So sad!!!

    • January 23, 2017 at 7:15 pm
      Reply

      They’ve been around for a long time. Seeing all these long-time stores close makes me really sad. While I don’t like that stores open and close within a year or two, seeing the long-term stores close is really jarring.

      • January 27, 2017 at 6:51 pm
        Reply

        Jack Be Natural has at least merged with another retailer (Enlightened Baby) so the people behind the store probably had a happier ending than if they’d just closed shop entirely. But I agree that it’s really jarring to see how many stores shut down each year (especially when you get to know the people behind them and then suddenly they’re gone!). Figgyfuzz and Diva Diapers were two I don’t think I saw in your list as well 🙁

        • January 27, 2017 at 7:17 pm
          Reply

          I’m not sure how I missed those two! I didn’t know JBN merged, that’s at least slightly better news.

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