WE'VE MOVED!
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Landing sales before production run?
storybookstudio
subscriber Posts: 7
Hi fellow SUN`ers! I`ve posted quite a few times here, but I`ve never actually asked a question (I don`t think??) I`m counting on all of the seasoned business veterans of this community - please help!
Here`s my situation. I have had a product prototype developed overseas, and I am now anxious to bring it (and many other related products) to market. My first product is a type of craft kit, and most of the items included in it, have rather large minimum order requirments by the factories.
Is it unrealistic for me to think that I might be able to first land a sale (or sales) that would satisfy these order requirements? Otherwise, I am going to have to pony up about $35,000 for the first production run (and then pray for sales). In addition to that, I will have to pay quite a bit in molding fees for each of my designs, once I am in production. I have gotten around the molding fees for the prototype, by hand-cutting the items myself (decals and stamps).
I have gone to QVC to present my line, and I am now praying for the small miracle that I will get "thumbs up" email from them on April 27th. But since I realize that my chances are slim, I am also looking to set up appointments with buyers of craft chains like AC Moore and Michaels. I was also thinking ofpossibly seeking sales from smaller, independent stores, where I might be able to take pre-orders until I reach that minimum requirment and I can start my first production run. But I`m thinking that:
a. these stores have no reason to trust me without a proven track record
b. It might take a long time to aquire that many sales.
Another thought is to try and source the manufacturing domestically for now. It might cost more per product to start, but I`m almost sure my minimum order requirements would be much lower, and would probably cut my initial investment in half (at least). I am trying to fund this myself without partners or investors, if possible.
I would sooo appreciate any thoughts or suggestions - on any of this!
storybookstudio2007-4-2 15:25:1
Here`s my situation. I have had a product prototype developed overseas, and I am now anxious to bring it (and many other related products) to market. My first product is a type of craft kit, and most of the items included in it, have rather large minimum order requirments by the factories.
Is it unrealistic for me to think that I might be able to first land a sale (or sales) that would satisfy these order requirements? Otherwise, I am going to have to pony up about $35,000 for the first production run (and then pray for sales). In addition to that, I will have to pay quite a bit in molding fees for each of my designs, once I am in production. I have gotten around the molding fees for the prototype, by hand-cutting the items myself (decals and stamps).
I have gone to QVC to present my line, and I am now praying for the small miracle that I will get "thumbs up" email from them on April 27th. But since I realize that my chances are slim, I am also looking to set up appointments with buyers of craft chains like AC Moore and Michaels. I was also thinking ofpossibly seeking sales from smaller, independent stores, where I might be able to take pre-orders until I reach that minimum requirment and I can start my first production run. But I`m thinking that:
a. these stores have no reason to trust me without a proven track record
b. It might take a long time to aquire that many sales.
Another thought is to try and source the manufacturing domestically for now. It might cost more per product to start, but I`m almost sure my minimum order requirements would be much lower, and would probably cut my initial investment in half (at least). I am trying to fund this myself without partners or investors, if possible.
I would sooo appreciate any thoughts or suggestions - on any of this!
storybookstudio2007-4-2 15:25:1
Sign In or Register to comment.
Comments
Also, by having product ready-to-go, this offers you the ability to execute a more formidable marketing campaign (walk-the-walk..."I have product"). In other words, its harder to market "potential" than it is "actual". Therefore, you can "peddle" your products toward success! Besides, you`ll be that much more excited and motivated too.
I have a great (awesome) patented invention, and I know 110% it will be a success. If I had the upfront money to produce it - I would! This would give me an opportunity to promote it in ways that lip-service cannot. After all, its all about "THE PRODUCT" (not Just talking about it to people). The difference between having a product, and not having a product (in the eyes of the prospect), is like a G.E.D verses a P.H.D...credentials and commitment. Best wishes!
PS. $35K is not a death sentence (it`s a car payment). As I`ve said, it will never be a loser (at worst a slow recuperation of $35K).Rumpelstiltskin2007-4-2 16:59:14
Don`t be afraid to lose money when testing. Inventors have a dilemma when starting to sell products: If you go local with small volume production, you`ll sell your product at little or no profit and might even lose money. If you invest in a large production run, you`ll have a big investment but won`t be able to fine-tune the product to maximize sales. Almost every product needs adjustment, even products from large companies. The safest course is to go with a small production run, even if you lose money initially. That way, you`ll know you have the right product when you launch it across a big market.
This makes perfect sense to me. I am glad that I have secured the manufacturing sources overseas for larger runs, but now I think finding domestic sources for short runs makes sense also.
Jeff - Yes, the overseas manufactures are going to understandably charge me out the whaazoo for a short run. The molding fees are for cutting the stencils which I will have to pay for before the first production run. For prototype purposes, I have had to cut them myself. I could actually do this for a small run - it`s just a huge pain to cut 19 sheets (of detailed graphics) per kit with an exacto knife. But, it can be done.
nhgnikole - I will look into purchasing her book, or online membership. Sounds like an interesting concept.
Rumpelstiltskin - You`re right - 35k isn`t a death sentence! However, if I can get things off the ground in a more conservative way, albeit slower, I think I`ll choose that route. I am confident that my product will sell, I just think the stress of having to sell 5000 units might put me (and my family) over the edge!
MNGrillGuy - You are right - obviously having a small quantity of the product in hand will allow me to test the waters before diving in. I can gather more information from my target market, and slowly make a case for my buyers with the additional research.
So I think what I`m leaning towards now, is the small domestic production run here in the US. I just need to source all of the components of the kit, assemble and possibly handcut them myself (unless I can find a cheap enough source to do this for me). Then maybe I will launch my product and company at an industry tradeshow (CHA perhaps). At the very least, I will get immediate feedback on the product, and maybe even some orders.
Thank you all so much for taking the time to respond. It`s so great to be able to come here and bounce things off of others. Sometimes I find it incredibly difficult and lonely without a partner or partners to brainstorm with. My family is extremely supportive, but they don`t have the answers I need.
storybookstudio2007-4-3 9:31:38
I went there last year and was then much more confident to move forward. They do not expect that you are in full production as long as you have a great prototype.
Second, find a tradeshow that targets the retailers you feel are your strongest customers and put up a booth. This will help you get leads. You probably won`t get many orders but you will, again, get a read if the product will be accepted by the retailers. You might not get Michael`s the first year out - or you might (you never know) but at least you`d build up a strong group of specialty retailers to help justify the costs ahead.
This was the exact road I have taken over the past year. My product will be hitting the shelves in September and I have already gained sizeable retailers, national press, etc. Now it`s time to deliver!
Good luck.
RCTOYS - I checked at the link for the FAO audtions. I`m just not sure my product would qualify, since it`s not really a toy, but a craft item. Here is a link to my webpage that tells more about it:
http://www.storybookstudio.net/kits.htm</A>
Since you`ve been to one, maybe you could let me know if you think it`s something that they would be interested in?
Degrees - Thank you very much for the links! I`ll email them and see if it`s feasible, although I`m thinking that my designs are a little too detailed. It`s worth checking into though.
Another route you might want to try - not sure where you are located - but HobbyTown USA has their own tradeshow in July in Nebraska. They have around 190 stores. (franchise) It might be a worthwhile show for you as well to get the orders/gain store contacts.
I will have to check out Hobbytown. I`m in NJ, so I need to make sure it`s appropriate. I`m thinking of registering to exhibit for the CHA show - either summer or winter, not sure yet. Have you been?
When I went, there was no rhyme or reason to the order - I ended up waiting until around 12:30 even though I pre-registered and was 8th in line outside. I think they just call in the next person who has a product that fits with the buyer who is open.
It`s very cool how they welcome you!! It took everything I had not to start crying
Please let us know how it goes!
Thank you for letting me know what to expect! BTW, I sent the Rag Shop info on my product yesterday, and they got back to me saying they love it, and they think it`s adorable. They want pricing and details, so cross your fingers for me!!
I will definately let you know how it goes at FAO.
I`m not sure if I ever got a response back from FAO with a confirmation. I know it was strange and I ended up emailing them to make sure we were set.
It`s difficult to take the financial step (I am tired of writing checks!) but if you go in it with the thought that you can`t fail....you will figure a way to make it work.
I think I`m going to do a little of both wholesale and retail. I will have to since my minimum is 2000 kits, and some of the items in it have a minimum of 10,000! I agree - having the completed product, ready to go is probably a much easier sell than a product that is still in the prototype phase.
Good luck!