This transcript was generated from the episode audio and may contain minor errors.
[Music]
Welcome back to Side Hustle School. My name is Chris Guillebeau, your host. We are coming to the end of another action-packed week. I wanna talk to you today about selling luxury products. We're gonna feature a story, a storyteller actually, from Singapore, whose side hustle is making and selling luxury cashmere scarves.
Now these scarves sell for $250 each, actually more than that for some of them, and you know, the market for $250 scarves, it's smaller than that of scarves that sell for 25 bucks, but there is definitely a market, like there is clearly a market for luxury products. And in some ways, depending on the product, it might actually be easier to sell something high-end than it is to sell something cheap, affordable, or mid-range. So we'll look at that, and we'll also talk about the question of how much should you reinvest in your business? This comes up a lot, because as you know in the stories, we talk about how much money somebody's making, and in some cases, they're taking all that profit for themselves, in other cases, they're choosing deliberately to reinvest in the business so that it can continue and perhaps even grow. But that does bring up the question, a good question, and a lot of people have asked this question of how much should you reinvest?
Do I reinvest 50%, is it just 10%, what about 100%? And not surprisingly, perhaps the answer is it depends, but there are some guidelines that will help you make that decision for yourself. So I'm gonna give you those guidelines in the commentary after the episode. So let's say thank you to today's sponsor, and then jump right into it. [Music]
Singapore-based Aisha Kohli is a brand storyteller.
She runs a communications agency called Spark Communications, helping companies connect with their customers. She's also the owner of Aisha Cashmere, where she sells limited edition handcrafted scarves using premium cashmere. Each scarves design is inspired from art, architecture, popular culture, or history. For years, Aisha had been collecting different textiles and doing small personal design projects. After a trip to Nepal, her husband brought back some cashmere shawls for her.
He also talked with the manufacturers, who said they could print designs on the shawls. So a few years ago, she printed 10 long black scarves with a very simple design that was inspired by Japanese Buddhist iconography. It's a design that is now one of her bestsellers, but at the time, she just gave those first 10 scarves away as gifts to friends and family. People who saw the scarves love the feel and design of them and ask where they could buy one. Spurred by the interest, Aisha went to Nepal herself to get educated on the manufacturing process.
Up until that point, it was something she knew nothing about. These days, she works with those manufacturing partners in Nepal to source the finest cashmere yarn and with local artisans who specialize in weaving, dyeing, screen printing, block printing, and embroidery. It's an intricate process with lots of steps, so she makes limited quantities of each design. So let's talk about some business and money stuff. Her first collection took about a year to design and produce.
These cashmere scarves are a luxury product. They don't come cheap. In fact, they're priced in the 250 to $350 range. That's right up to $350 for a scarf, but it's a really nice one. It can also make your coffee for you, perform other common household tasks, a very functional luxury scarf.
Aisha started this project with no debt. She bootstrapped the entire business, and she's now making about $40,000 each year. At least that's what it's been for the past 2 1/2 years, but she also reinvest quite a bit into the business. Since she has a day job that pays well, she's not relying on the side hustle for her main income. So she's happy to put a lot of the profits back into the cashmere brand so that it can continue to grow and perhaps be even more successful in years to come.
Now, this is not surprisingly a premium product, a luxury product. Aisha markets and promotes her scarves through all kinds of channels, but especially physical pop-up events and other physical stores and boutiques. She does sell online, of course, but being in the retail business, Aisha has learned quite a bit about the purchasing habits of her customers. Now, I thought this was interesting. She's noticed that people are first attracted to the color of the scarves and then the print, with the most popular colors being in hues of blue, red, black, and white.
She also noticed that there are two distinct types of people, those that like floral prints and those that prefer more abstract prints. People may have a mix of patterns, but by and large, they have a strong preference for one or the other. And last, she recognized early on people needed to see and feel her scarves before they would buy. Again, it is a physical luxury product, and that's why physical pop-up stores are her main source of sales. More often than not, a customer is more likely to fall in love with the product in front of a mirror than looking at pictures of it online.
Since in-person sales make up such a large amount of her income, she seeks out events through Facebook entrepreneur groups. She's noticed that a lot of her online sales come from people who previously attended one of the pop-up events. And when they attend those events, Aisha tries to capture their contact information. And that's why her email newsletter is the second biggest source of leads in sales. Three and a half years in, she's now received orders from all over the world, including Mexico, Dubai, and Tokyo.
She's now investing some of those profits to build up a distribution network in several other cities, as well as collaborating more with artists, illustrators, and master craftsmen. Aisha Kashmir is covering the world in luxury one neck at a time. Her future is bright, and it comes in several colors. [Music]
All right, I promised you some comments, some guidelines on how much did you reinvest in your business? In this story, in this feature, Aisha is reinvesting quite a lot.
She has determined that she doesn't need the money from her side hustle, at least not now, and she wants it to become even more profitable in the future. So she's choosing to take the majority of her profits, I think, and actually put them back into the business. So how much should you reinvest when you're starting this out? Well, obviously it depends. Ultimately, the answer is up to you.
But based on my experience, based on what I've seen over and over, I do have some guidelines for you. And the first guideline or recommendation is don't invest all your profits back in the business. I think it's really important once you have a profitable side hustle, which doesn't need to take long. Some of our stories take a while to get off the ground, but others are profitable from the first month. Whatever the case is, don't invest all your profits.
Be sure you're paying yourself at least something. Even if you don't need the money, I think it's important and empowering to all of a sudden see this second income. Even if it's a small amount, it's really fun to kind of point to it and say that's apart from my salary. That's not my paycheck. That's something that I made for myself.
And then do something fun with it. Like reward yourself a little bit. Go and get a massage or whatever's important to you. Like actually spend some of that money on yourself. I think you'll appreciate it.
I think it'll also inspire you to be even more motivated to keep working on it. Okay, recommendation number two, set aside a percentage. So you're gonna say, okay, I've got my revenue here and I'm gonna deduct my expenses. And what is left over is profit, but I'm gonna take 20% of that profit and reinvest it somehow. Like what can I do to improve my business?
What can I do to make something easier to better serve my customers, to reach more customers? Whatever the case may be, I'm gonna take that money. I don't have to spend it. It's not an expense. It is an investment.
So that's the distinction there. And my third recommendation relates very much to that. It is to invest wisely. Again, it's not just about having more expenses. It's about saying like, what can I spend money on that will help this business grow or help it become more sustainable, help it become more optimized so that I'm not spending as much time on it.
Or if I am spending as much time, I'm doing it differently. Like I found a way to reduce some of the tasks that I can focus more on growth. In most side hustles, it's not that hard to make a list of five things you can do right away that will focus on growth. You can also make this list from the point of investing 20% or whatever it is of your profits and say, okay, what are five things I can spend money on that might help me grow the business or otherwise produce a major benefit like saving time. And then my last recommendation, whatever it is you choose in terms of the percentage and how much you pay yourself, make your savings and you're paying yourself automatic.
Like systematize that process you don't have to make a decision. When it comes to the end of the month or the quarter, don't just kind of ballpark things like say to yourself, okay, I'm gonna pay myself X amount. I'm gonna reinvest whatever that percentage is. And that way your decision is made. Now, obviously, if you need to adjust it at some point, you can do that.
It's your business, it's your side hustle. But I think by being intentional, which is kind of what all four of these recommendations relate to, I think you're gonna feel more confident going forward and you're gonna spend less time worrying about whether you're making the right decision or not. So those are my guidelines. Of course, we're gonna link those up in the show notes along with anything else. Thank you for listening today.
As always, inspiration is good, but inspiration with action is better. Those show notes are at sidehustleschool.com/469. Come and take a peek at Aisha's luxury scarves. Of course, you can see them online, but maybe if you're in Singapore at some point, you can check out one of her pop-up shops. I go to Singapore at least once a year, often twice.
So I'll be on the lookout next time I'm there. And of course, I will be back tomorrow. Tomorrow is our weekly recap. The Ides of April, if there is such a thing. And we've got a lot more coming next week and beyond.
I hope you'll join me for it. I'm Chris Guillebeau for Side Hustle School. [Music]
