I've got a great product. Now how do I sell it ?
Bean
Posts: 8,129
This is a continuation of this thread that got off topic http://forums.parallax.com/showthread.php?p=687370
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Metron,
I feel your pain. When I first started selling products, I had very little profit in price (thinking I would sell lots). Ha. I only sold a couple and lost alot of money.
So I am force to raise the prices so that a distributor can make their markup (nothing against the distributor, they have to make money too), and still cover my costs.
Somthing that I would be willing to sell for $10, now I have to sell for $14 so I'm not under-cutting the distributor.
Then you have to advertise. I had a small Nuts and Volts ad for quite awhile now. At $150/month you have to sell alot of stuff to recoup that cost. So again the price must go up.
I think we have all been fooled by the "If you build it, they will come" alure of the internet. Trust me it doesn't work that way.
In an ideal world you could make a cool product, make a little website to sell it, everyone in the world that wanted it would find it and buy it.
If it wouldn't be for my consulting income, I would be losing alot of money. I don't sell my products to make alot of money. But it would be nice to at least break even. But I enjoy doing it, and I will probably continue doing it even though I "know" I'm going to lose money. Stupid business move I know. But for me it's not about the money anyway.
Maybe I should take a marketing class or something because I'm just as perplexed as you are. I look at something like the ipod (which is not a great mp3 player, and it alot more expensive then other mp3 players), but somehow Apple has convinced the kids that they "have" to have an ipod. My niece asked my about getting an mp3 player. I told her to get a certain one, and that "I" would not get an ipod and explained the reasons. Guess what, yep she bought the ipod. Why, "because all my friends have one". I asked her to name the friends that had one. She could only name two. I bet more of her friends had non-ipod mp3 players. But that is what advertising gets you. Well played Apple, well played.
Bean.
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www.hittconsulting.com
Post Edited (Bean (Hitt Consulting)) : 11/4/2007 3:42:19 PM GMT
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Metron,
I feel your pain. When I first started selling products, I had very little profit in price (thinking I would sell lots). Ha. I only sold a couple and lost alot of money.
So I am force to raise the prices so that a distributor can make their markup (nothing against the distributor, they have to make money too), and still cover my costs.
Somthing that I would be willing to sell for $10, now I have to sell for $14 so I'm not under-cutting the distributor.
Then you have to advertise. I had a small Nuts and Volts ad for quite awhile now. At $150/month you have to sell alot of stuff to recoup that cost. So again the price must go up.
I think we have all been fooled by the "If you build it, they will come" alure of the internet. Trust me it doesn't work that way.
In an ideal world you could make a cool product, make a little website to sell it, everyone in the world that wanted it would find it and buy it.
If it wouldn't be for my consulting income, I would be losing alot of money. I don't sell my products to make alot of money. But it would be nice to at least break even. But I enjoy doing it, and I will probably continue doing it even though I "know" I'm going to lose money. Stupid business move I know. But for me it's not about the money anyway.
Maybe I should take a marketing class or something because I'm just as perplexed as you are. I look at something like the ipod (which is not a great mp3 player, and it alot more expensive then other mp3 players), but somehow Apple has convinced the kids that they "have" to have an ipod. My niece asked my about getting an mp3 player. I told her to get a certain one, and that "I" would not get an ipod and explained the reasons. Guess what, yep she bought the ipod. Why, "because all my friends have one". I asked her to name the friends that had one. She could only name two. I bet more of her friends had non-ipod mp3 players. But that is what advertising gets you. Well played Apple, well played.
Bean.
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
www.hittconsulting.com
Post Edited (Bean (Hitt Consulting)) : 11/4/2007 3:42:19 PM GMT
Comments
The GUYS at Apple marketing know... "HYPE is the WORD!" Just look at the IPHONE example. A $700 Phone that you will pay another $700 for over the next year? It's a regular money tree... and all they had to do was convince people they HAD to have one by showing them what they were missing in their lives.
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There's nothing like a new idea and a warm soldering iron.
It's about micro-ISVs, but I think that many of the ideas and concepts would map well to your business domain.
1. You must have outstanding documentation... a good test is if a 5th grade student can understand it. Clear pictures, simple diagrams, and lots and lots of examples are a must.
2. Take a mult-channel approach...
a. Contact a variety of tyoes of companies including re-sellers, distributors, business-to-consumer, business-to-business etc.
b. Promote it to the trade journals that feature New product releases
c. Create a simple and professional website to sell it yourself
d. Look for opportunities to partner with companies that offer complimentary products and services... create package deals, bundles, give-aways, etc.
3. Support your product... Provide quick response to any customer issue, assume that the customer is always correct, error on the side of exceeding the customer's expectations.
It would probably be messy to have a for sale category in the forums????
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~~ dRu ~~
A few years ago...I was into RC car racing. (No I'm not a kid......38 years old). A friend and I started talking about how expensive the parts were. If you race enough....you will literally have thousands in an RC car.
We started a business making rc car parts. We were making parts better than the car manufacturers. We bought a CNC mill (table top) and started making parts. We decided that our mill was not fast enough to make a real profit. We would make the prototypes on our mill....then have production runs outsourced after the part was tested.
We made just one part that was a real winner. The RC 10 truck has a shock tower that cost 27.00. If you race every friday night....you are likely to break at least one. We redesigned the shock tower and made it from carbon fiber. We sold ours for $45.00. You would have to run the rc car over with a real car to break it.
We actually made a huge amount of money. Mostly from word of mouth. There were many other items we produced that made large sums of money.
I think anyone can do what we did, you just have to find your market......and make sure there is demand within that market. Also being involved with that market helps.
With business that is totally conducted over the internet....it is harder to get started....there is no word of mouth advertising to help you.
I hope this inspires the ones having a hard time. I'm no long associated the the rc car part business (that is another long story within itself), but there are many things out there to make money. Just don't give up.......keep trying to find your niche.
James L
One of the single, greatest costs that any manufacturer or distributor has is the cost of on-hand inventory. Obviously, without on-hand inventory,·one can market a product to·one's heart's content, but sales will probably be abysmal. However, consider that·YOUR inventory doesn't necessarily have to be in YOUR hands or in YOUR warehouse. It may be out of your physical hands, and dedicated to a particular use (distributor stock). How is this handled? By using what's known as consigned stock. The material is still yours until it is sold, at which point the distributor is required to reimburse you for it.
Consignment is a process by which you send out merchandise to a legitimate distributor whom you would like to have as an outlet for your product, but who may be leery or unable to purchase even a minimum order at first. If you are willing to use his shelf as field warehousing (so to speak),· that will give him the ability to sell your product at little or no cost to him, and little risk as well. Check with your lawyer and insurance company for further details.
So, by way of a simple contract, you send the distributor a given number items of your product with his promise to pay you once it is SOLD. Generally this is not done on an individual item basis but in a mutually agreed upon time frame (weekly, monthly, bi-monthly, etc). At interim periods, inventory levels are sent back to you, so you always know what the distributors stock levels are. Additionally, your price to the distributor on consigned merchandise will generally be just a bit higher than that of a stocking distributor without consigned stock. This helps to cover any loss, damage or shrinkage which might occur.
Hopefully the distributor will see his sales for your product·increasing over time, he will wish for a lower cost, and thus be more willing or able to purchase your product outright. Once he buys direct, and you know you have a viable sales outlet, you can afford to knock the price down a bit.
A perhaps unseen or unnoticed advantage of distributor relationships is that it usually will get your product closer (geographically) to some of your customers. This can or may result in reduced shipping costs for the end user·and also it also assists in getting·your product in the end users hands more quickly. Prompt delivery is definitely a legitimate selling point!
Regards,
Bruce Bates