Sell Your Own “Stuff”
The disadvantages to product sales include overhead, pre-purchasing merchandise, and storage space. However, if you feel you can mark up your product to the point where you actually make a profit AND if you feel you have a hot item on your hands, then you might have a chance with online product sales. If you do create a market for your product, you also need to consider your time constraints as a sole proprietor. Let’s take a ‘for instance’:
You have a book that you want to sell, and each book (size about 6” x 9”) costs you $7.00 wholesale. Mark up can follow two paths: first, you need to check your competitor’s price and either equal it or “lowball” the price (come in a few cents under the competitor’s price); secondly, if a competitor doesn’t exist for your book, then you might mark it up about 30% (average mark up). That means you’ll sell the book for about $9.00. Now, you subtract from the retail price these costs per book (these are all guesses and averages and European costs may be higher or lower):
- Wholesale price of book = $7.00 (this doesn’t include the cost of mailing the item to you from the publisher)
- Packaging – bubble wrap envelope wholesale = $.75
- Media Mailing (within your country) = $1.40
- Storage = (this is negligible, dependent on how many boxes of books you ordered) = $.10
- Your time to wrap and send (15 minutes at $15.00/hr) = $3.75
- Advertising costs/Web space (say at $1/month per book) = $1.00
The total costs above = $14.00. You just lost about $5.00 for each book that you sell. Granted, the costs above can be reduced by a number of factors, and the price of the book can be raised depending on the rarity or popularity of the book. The point here is that retail businesses cost money, and many folks don’t take into account their time (which = money) and costs in retail development. If you notice above, the time spent to mail the package is the highest cost.
Linda Goin carries an A.A. in graphic design, a B.F.A. in visual communications with a minor in business and marketing and an M.A. in American History with a minor in the Reformation. While the latter degree doesn't seem to fit with the first two educational experiences, Linda used her 25-year design expertise on archaeological digs and in the study of material culture. Now she uses her education and experiences in social media experiments.