So… the epoxy resin product idea moves forward. Prototypes 1 & 2 (dry fly and telescope, respectively) are complete, installed on my Yaris bumper and looking pretty snazzy to my eyes anyway… The creation of a mold, the production of final product and the affixing to a vehicle all seem to be working out OK.
So the project is feasible from a purely technical perspective. I can make them.
Now the question is, can I sell them?
Or more precisely, can I sell enough of them to make it profitable?
So, that means it’s time to break out the Excel spreadsheet…
Interestingly it turns out that there’s quite a few different ways to look at this endeavor and call it success or failure…
I’ll just stick to a few.
Basically the material cost of one of these things turns out to be about a buck apiece. That’s a lot more than I expected, but to get it lower I have to both buy larger bulk amounts of casting compounds, and I have to get more efficient with my use of the compound. But at the volumes I am buying now, and the efficiency I am seeing today, it’s about a buck apiece.
Advertising in a suitable magazine will cost about $250 per month. Figuring my own labor is worth at least $15 per hour, and ignoring mailing costs (I know, that’s a potential profit source itself…) I would basically have to make and sell about 60 of these per month at $9.95 apiece to generate enough money to fund the next month’s purchases, buy next month’s advertising and pay for my own labor.
So I’d have to sell more than two per day on average to make any long-term profit.
Then, of course, there’s the potential problem of reaching a saturation point with the market to deal with…
Hmm…. selling 60 of these a month is something that seems remotely possible if they appeal to folks…
Basically it will cost me about $250 out of my own pocket to see if this could actually work.
To be a “success” all I really need is to make enough to fund my molding and casting hobby, which would easily be done for $100 per month. To see a clear profit of $100 per month would mean selling 70 or so per month…
What do you guys think about that?
4 users commented in " Economics 101 "
Follow-up comment rss or Leave a TrackbackYou won’t know until you give it a rip.
It’ll be cheap enough to find out.
It is highly likely that you won’t sell enough the first month (or second or third) but will sell some. Therefore, you will have to make the decision from the outset whether or not you are going to support this endeavor while it’s losing money and, if so, for how long and for how much.
The success of magazine advertising (or any other, for that matter) is increased by repetition. So, lay out your advertising budget for a year or so, commit to it and advertise it regardless of whether or not it “works” in the beginning.
Additionally. You need to have a good variety of items to begin with so you can sell additional ones to your satisfied customers. At least five? Send a weblink and e-mail along with any filled order so they can order them there as well.
Just ideas, although the first notions about funding aren’t really “ideas” but pretty much imperatives.
Yeah, my initial thought on this was to have the following stickers available:
Fly fishing:
– Dry fly
– Streamer
– Wet fly
– Nymph
– Saltwater fly
– Bass bug (maybe)
Astronomy
– Altitude/azimuth refractor
– Equatorial refractor
– Altitude/azimuth Maksutov-Cassegrainian
– Equatorial Schmidt-Cassegrainian
– Tube Dobsonian
– Struss Dobsonian
That would give me five or six for each market. Going after two markets will also mean that I have to double my advertising budget too.
An alternative to the magazine advertising approach is to try for a purely online advertising approach, going after Google Ads and advertising on sites like Amazon. I could also put ads on CraigsList.
The thing is that for an online presence I need an online store… I suppose I could try to set up an Amazon store. But that’s more money…
Sigh.. people wonder why many products sell for ten times their materials cost… this is why…
Oh, I’ve also decided my prototypes are too thick. My goal is to reduce the casting resin needed by half. I may use foam sheets as the basis for my next molded versions.
I’ve also considered making a steel rule die cut and cutting them out of dense foam sheets, then soaking the foam sheets in varnish to harden them up… That would be uber cheap if I could figure out how to do it…
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