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Old 11-30-2012, 06:59 PM
 
Location: Wartrace,TN
5,280 posts, read 8,230,641 times
Reputation: 10390

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I am working for an acrylic assembly manufacturing company in cost accounting/estimating. I know the manufacturing costs and I believe I could get at LEAST a 50% margin if my employer produced the product for me.

I have the knowledge/expertise to set up a web based marketing company with the back office fulfillment/order/ accounting functions.

I am also familiar with other major players in the acrylic manufacturing industry.

My current employer needs all the business it can get right now, I would not conduct any of the bong business on company time. My plan is to place orders with the company like any other business would and pay for inventory storage and shipping services.

My employer is NOT INTERESTED in retail sales. I think I can provide a new revenue stream that could help the business over the peaks and valley's of their current business model.
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Old 12-01-2012, 04:46 PM
 
Location: Wartrace,TN
5,280 posts, read 8,230,641 times
Reputation: 10390
Any comments on the idea? I am wondering how to approach the company president about this. They HAVE produced bongs for customers in years past but it isn't one of their current products.

I have looked at the current offerings on other websites and they are asking 25 dollars+ for basic units that my employer could produce for under 12 dollars including packaging. In my view I would just be a customer with flexible manufacturing requirements. I would be helping the business by scheduling my production runs during slack times.

The company has warehouse storage, daily UPS service and employees that can handle shipping (for a price). I think I can ship a basic 25 dollar item for 16 to 18 dollars depending on location. This would be 28 to 36% margin on each unit.

In my view it may be a win/win for everyone involved.
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Old 12-01-2012, 06:54 PM
 
4,383 posts, read 8,684,755 times
Reputation: 2332
Quote:
Originally Posted by Wartrace View Post
Any comments on the idea? I am wondering how to approach the company president about this. They HAVE produced bongs for customers in years past but it isn't one of their current products.

I have looked at the current offerings on other wes and they are asking 25 dollars+ for basic units that my employer could produce for under 12 dollars including packaging. In my view I would just be a customer with flexible manufacturing requirements. I would be helping the business by scheduling my production runs during slack times.

The company has warehouse storage, daily UPS service and employees that can handle shipping (for a price). I think I can ship a basic 25 dollar item for 16 to 18 dollars depending on location. This would be 28 to 36% margin on each unit.

In my view it may be a win/win for everyone involved.
So your employer will be willing to drop ship these units? And carry all your inventory? And you sell you a manageable minimum quantity? And produce in small enough runs to meet your demand effectively(fast enough)? Also does your job frown on people having side jobs/businesses?

Those are some things I'd be considered about. 36% gross margin actually isn't that much depending on how much inventory you have.
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Old 12-02-2012, 05:34 PM
 
Location: Wartrace,TN
5,280 posts, read 8,230,641 times
Reputation: 10390
Quote:
Originally Posted by jdm2008 View Post
So your employer will be willing to drop ship these units? And carry all your inventory? And you sell you a manageable minimum quantity? And produce in small enough runs to meet your demand effectively(fast enough)? Also does your job frown on people having side jobs/businesses?

Those are some things I'd be considered about. 36% gross margin actually isn't that much depending on how much inventory you have.
We drop ship and store units for our current clients. I would pay for my units up front plus warehousing costs. We regularly produce very small runs for other clients; I would be able to determine the most cost effective production run for my needs (that's what I do for a living) while weighing the storage costs.

I believe I could ship the product for 16 to 18 dollars and my only costs would be marketing and order processing (60 dollars per month for my webstore & 3% +/- for credit card processing.

I do not think my employer would have a problem with my operating this business on the side. I think they would appreciate the additional business and my having flexible manufacturing requirements would help fill in slack times.
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Old 12-02-2012, 05:38 PM
 
Location: Wartrace,TN
5,280 posts, read 8,230,641 times
Reputation: 10390
BTW- I am not "set" on acrylic bongs. Another idea is green houses however the investment I would have to make in these units would be huge. (500 + in raw materials alone)
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Old 12-02-2012, 06:02 PM
 
635 posts, read 558,061 times
Reputation: 520
You employer would probably be concerned about any reputation ramifications of selling such a seedy product. BTW your margins are probably industry standard, or below. Without a strong brand and distribution channels, you would probably not be able to crack the market. It could work, but I'd say sharpen the edge. And read, Competitive Strategy, By Porter.
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