A view of the industry through the
eyes of a chain buyer.
Comments on the Future
of Independent Bead Shops
Are chain stores the problem, or is it something
Staff Report (April 18, 2011)
(Note: The April 4 issue of CLN
asked the following question, "Are Bead Shops Next?" and invited
readers to respond. Here is the article and the responses.)
ARE BEAD SHOPS NEXT?
CLN heard disappointing reports about
the bead shows in Tucson, although it is more difficult to obtain
accurate numbers because, unlike CHA, TNNA, or NAMTA, there are a
number of bead events going on simultaneously. The weather was a
real problem, too. But the gloomy reports raise the question of
whether there's a parallel between beads and scrapbooking. Consider:
A hot new trend hits the country, inspiring
hundreds or thousands of enthusiasts to open shops. Because the
chains' bureaucracy is so cumbersome, the independents thrive
because of their superior selection, service, and knowledge. Chain
stores are way behind the trend and must scramble to catch up.
That is not an easy or quick thing to do. A
former Michaels' president once told CLN, "Making a major change is
like trying to turn around a battleship in a narrow stream."
But eventually the chains wake up and begin
offering a much greater selection, lower prices, etc.; they become
much, much tougher competition.
The number of scrapbook stores has declined.
Will we see the same with bead shops? Or can the industry somehow
avert that eventuality?
Why Some Bead Shops Fail
No, chain stores will not be the death of
independent bead stores. There is no way they can offer the
services, the selection, and inspiration that a good bead shop can.
I love having a Michaels store just a few miles down the road from
They have such poor quality, are overpriced,
and have zero service or knowledge. People get started on their
beading hobby there but will eventually find my shop as a better
What is killing off small bead stores are the
"wholesalers" where anyone can buy many of the same items a store
has, at cost. I donít believe any of the other ďcraftĒ categories
have the same problem, where stores are competing with "wholesalers"
for the same customer dollar.
I know many bead shops that have closed
recently or are about to close. The main reason is customers now
shop online at discounters. But I think that is just an excuse. The
main reason small shops close is that the owners burn out. They get
tired of working for no money, donít understand how to truly run a
business, were too small to start with, and canít maintain sales in
a difficult climate.
Most wholesalers now sell direct to customers.
Sure, you need a vendor's permit, but those are cheap and easy to
get. Sure, you need to hit a certain dollar value, but now groups of
beaders shop together to meet those minimums -- itís all very
organized. It's very difficult for bead shop owners to find products
that are not available wholesale.
Jewelry making has been around a very long
time; people will always be making and wearing jewelry. Itís like
clothing, or shoes. Not so sure about sticking photographs in a book
with fancy labels. -- Cathy Lampole, That Bead Lady,
Bead and Scrapbook Shops
(Note: The author, who asked to remain
anonymous runs a multi-category store in the Northwest.)
Our bead sales have increased every month for
over three years. Bead sales in fourth quarter of 2010 were up over
110% from previous year. In our community four bead stores have come
and gone. My feeling is bead stores operate very differently from
scrapbook stores or quilt shops.
Let's compare scrapbook stores to bead stores.
Bead store owners have been beaders forever, have a certain type
of beading that they love, and in many cases, their stores reflect
it. Scrapbook store owners love scrapbooking and all it stands for;
they want the newest, most interesting products available. The bead
industry, while it offers constant new looks and products, finding
them at your finger tips and at right prices is very difficult;
thatís why big box stores can't figure it out. Scrapbook stores are
offered new product everyday of the week via email.
Also, all scrapbook stores pay similar prices.
In the bead world prices can vary wildly; for example, a bail for
which we used to pay $0.30, now costs $0.07. This example can be
repeated over and over. The bead industry is a very uneven playing
field, and constantly takes a lot of research and digging for new
sources and better prices, and importantly, new products.
New products and innovation are key.
Will bead stores numbers decline? Probably, in
today's retail environment, Beading has always been a roller coaster
industry; we are probably ending another cycle. Does it have to be?
We don't think so. We think beading sales will continue to grow for
2011-2012. Our customers are excited; they may come in for findings,
but are wowed with new products, things they've never seen.
"What Amazon Did to Book Stores"
I think the total number of bead stores is
maybe 2,000 or fewer in the U.S. It's a rough niche to create enough
revenue to make it without a dominant trend.
Bead stores are left to selling pretty much commodity goods, against
large-scale retailers with direct buying sources. Hobby Lobby has
added tripled its bead section in the last two years, providing no
service or classes, but every day selling most items at 50% off.
The amount of instruction and service in a bead store is huge; you
have a lot of new entrants to train and classes are a must. There
are some great stores out there that do a wonderful job with
classes. The Bead Monkey is one; sheís done really well. (Editor's
note: The Bead Monkey has two stores in the Minneapolis area.
Yes, the number of bead stores is declining, but of course what
constitutes a bead shop can be a closet store in a very small retail
Every bead store owner Iíve talked to says that
the first quarter was very rough. The chains and major Internet
suppliers have been a big impact on local stores, kind of like what
Amazon.com did to small independent book stores. Ė Homer Hills,
(Editor's note: An employee of a Borders bookstore, soon
to be closed, posted a sign at the front door: "No restrooms. Try
Amazon." To see the sign, visit
Independents vs. Chains
I don't think there will be a decline [in
independents]. The chain stores have brought in beading supplies,
but they can't carry the variety that an independent store does. And
every bead store carries a different inventory; there's not a lot of
overlap except perhaps on basic materials for stringing and
findings. Therefore, the customer shops at many different stores for
the variety. In addition, the independent bead stores offer a lot of
different classes on techniques and projects, which keep the beaders
interested. They also can move with the trends very quickly. --
Linda Lachance, Northern Pine Designs
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