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Old 12-07-2013, 08:20 PM
 
Location: Metro Detroit, Michigan
17,343 posts, read 16,058,945 times
Reputation: 17200

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I'm in the process of manufacturing some niche market items. They are mostly tools that I have used on the job and found handy. There is competition, but not terribly much. I've worked out the numbers and I can compete on price, but I will have to skimp a little on aesthetic appeal. I was thinking of manufacturing a couple versions of the same thing. One would be an economical, cost competitive version. The other would be a more expensive version that simply looks nicer.

Anyways, I'm starting off by making 20-30 pieces at a time. If I sell half, I will make more and go from there. If they sell really well, I will start working on more efficient ways to make the products. I guess my issue is, I can make these things without a problem. It's finding the best way to get it in the hands of the customer. I've dealt with Ebay and Amazon before. I'd like to explore other avenues if possible though.

I'm obviously not making enough of my products to list in a tooling catalog. Are there any other avenues worth pursuing for a small time seller?
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Old 12-07-2013, 10:20 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,136 posts, read 60,179,694 times
Reputation: 36635
That's the problem, you have to sell in large quantities to really make money, and when you get that big order have to be ready to produce it. I had a sign, graphics, and laser engraving/cutting business for 17 years. Currently I have a daytime job and just do the laser work on the side, and stick to manufacturing parts. Just a half dozen good customers keep me in extra vacation and fun money while only working a weekend or two a month, but that's doing several thousand parts a day because they go quickly and often are just many of the same thing. My advice is to start slow but when you know they will sell, have help trained and ready to help in case you need them to meet deadlines if you get into a catalog or retailer.

If your items are fairly unique and niche then online sales with good search keywords should get you some decent hits, but also you could try direct contact by e-mail or snail mail to those kind of people that could use it.

For tools, aesthetic appeal is not as important as durability, safety and ease of use. On the other hand, if it looks crappy people won't order it, and you will need to show pictures of it.

Good luck.
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Old 12-07-2013, 11:09 PM
 
Location: Metro Detroit, Michigan
17,343 posts, read 16,058,945 times
Reputation: 17200
Quote:
Originally Posted by Hemlock140 View Post
That's the problem, you have to sell in large quantities to really make money, and when you get that big order have to be ready to produce it. I had a sign, graphics, and laser engraving/cutting business for 17 years. Currently I have a daytime job and just do the laser work on the side, and stick to manufacturing parts. Just a half dozen good customers keep me in extra vacation and fun money while only working a weekend or two a month, but that's doing several thousand parts a day because they go quickly and often are just many of the same thing. My advice is to start slow but when you know they will sell, have help trained and ready to help in case you need them to meet deadlines if you get into a catalog or retailer.

If your items are fairly unique and niche then online sales with good search keywords should get you some decent hits, but also you could try direct contact by e-mail or snail mail to those kind of people that could use it.

For tools, aesthetic appeal is not as important as durability, safety and ease of use. On the other hand, if it looks crappy people won't order it, and you will need to show pictures of it.

Good luck.
Thanks for the input. If there was a ton of demand for the things I make, I would consider sending it to a job shop. The thing is, I don't think there will be that kind of overwhelming demand. I've checked the price of my competition. I'm guessing they are making them in small quantities, pretty much "just in time" manufacturing.

My smaller items can be made very efficiently. When I divide the time out, I completing one in a half hour. The price point is $16/each. After paying taxes, the middle man, etc, I'm not getting rich, but I'm not doing bad either. The best part is, the material is dirt cheap, or even free. The owner where I work doesn't mind if I snag some scrap material, since there's not much money in it. The only issue is, when I'm taking scrap, it takes longer for me to make use of it.

My larger items are a bit more of a challenge. I'm hesitant to make them in quantities over 5 due to material costs. If I sell them at a competitive price, I'm barely making $10/hr. I'm planning to make 3 and trying to sell them. If they get snapped up, I'll gladly order material and make dozens.

As for the look of the items... They don't look bad or anything. I just don't pretty them up. No polishing, lapping, painting, etc. For what they are, it's just not necessary. It would only add extra cost for the customer.
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Old 12-07-2013, 11:35 PM
 
341 posts, read 604,571 times
Reputation: 741
You might want to pursue a contract were a company trials the tool in select markets (small order). If it sells very well, they will make a purchase agreement for 20,000 units.

Take that agreement to a bank and say, hey, I have a guaranteed 20k unit contract and I need capital to produce these tools.

I'd have someone else manufacture these parts as they have the tooling and labor which will eat a huge amount of your capital if you lack both (which you do).

Contract the mfr. to do at will building. This will get you going until you can slowly tool up and do it yourself.
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Old 12-08-2013, 08:11 AM
 
Location: Simmering in DFW
6,954 posts, read 20,483,861 times
Reputation: 7227
My son made a product and put it on consignment in small stores where buyers shopped for items that related to his product. It was a unique product and he did well, eventually getting a patent and doing direct sales on Ebay as well as to stores.

Last year he sold the product line for a nice profit of $100K to a competitor. Since this was just a side business over the past 10 years, he was happy to sell it and move on to other things he does.
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Old 12-08-2013, 10:30 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,136 posts, read 60,179,694 times
Reputation: 36635
Quote:
Originally Posted by andywire View Post
My larger items are a bit more of a challenge. I'm hesitant to make them in quantities over 5 due to material costs. If I sell them at a competitive price, I'm barely making $10/hr. I'm planning to make 3 and trying to sell them. If they get snapped up, I'll gladly order material and make dozens.
Without knowing the material, I can't say if this will work for you, but I have been able to double and even triple profits on some items by doing some research on materials. For example, I had a $10,000 job to re-do all of the signage in a large parking garage, and happened to find a freight liquidator with more sheets of the material than I needed that had dog-eared corners from a truck accident. At about 1/10th the cost I simply had to cut off an inch or so before cutting to size. There are also materials for sale cheap on ebay at times that have been overstock or from someone going out of business, and even auctions.
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