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Maker Business – Lessons Learned

Maker Business - Lessons Learned

This one goes to 11! While there are Ten Rules for Maker Businesses, and I covered them all, what I didn’t do was a full-on follow-up post. So here it is.

Just as a reference, my first post was on February 20th, 2012, and today is April 26th, 2012. So that’s just about two months.

And here are the 10 rules, which I’ll address individually below. (Each one links to the original post on the subject.)

1. Make a profit.
I’m happy to say I did this. It took about a month and a half to sell 10 units, and after all was said and done, I believe I hit the 2.3x rule. There were some miscellaneous costs in there, but even with those, I did alright. This is important because if you don’t make a profit, it’s difficult to consider continuing. As far as how much my time was worth, I think I did OK. Not great, but OK. I’m convinced that with increased efficiencies things will improve.

2. It takes lots of cash to stay in stock.
I kept my stock low, which kept costs down, and helped ensure I didn’t have overstock just sitting there. Sales were slow at first, and when that happens you get a bit worried. You start to think about sales, or discounts, or something. I stuck with it and didn’t do any of those things, which turned out fine. Actually, I got lucky in that I had 4 orders in a two day period, right after I wondered if I’d ever sell another unit.

3. Buy smart.
I bought just the right amount of components to build 10 units with no real leftover. This worked out well, except in the case where I got really picky about quality. Buying larger quantities can help lower the shipping costs, but that doesn’t always work, and sometimes buying in bulk is just too costly.

4. Basic business rules still apply.
No problem here… I felt confident on this one, and there were only very minor things I had to deal with business-wise.

5. You get no leeway for being a maker.
I’ve not needed any leeway yet (fingers crossed) as all of the customers have been awesome, and I’ve done my best to be awesome to them. You know, there’s only been 10 customers so far, but it’s been close to 100% pleasant. The only issue I had was with people who are interested in the product, exchange a number of emails with me, and then I never hear from them or receive an order. It’s not extremely disappointing or anything, but just a little bothersome.

6. Be as open as you can.
I’ve been pretty open, maybe not as open as I could have been, but since this whole adventure was based on a pretty open blog post, I think we’re good with this one. I did re-write the code a little bit mainly to make debugging a little easier, and I should probably push that code out, but honestly that’s probably not a huge deal as there’s code out there that works fine right now. I’ve also been sure not to bet the farm on this one product, which is why I’m keeping the production run small. If the opportunity disappears, it won’t affect the business much.

7. Create a community to support and enhance your products.
With a small user base and a simple product, there hasn’t been much need for a community. If one magically appeared I’d support it, but I probably don’t need to run out and force one into existence.

8. Design for manufacturability.
As mentioned in my post, I didn’t design for manufacturability, but now that I’ve done some “manufacturing” I’ve come up with ways to make things easier. This is really just applying better manufacturing techniques next time. I managed to get a properly sized hole saw, which means no more filing, which will speed things up. Win-win!

9. Marketing is your job.
Doing the marketing was fairly easy and I didn’t need to get too aggressive. I’ve got a lot of experience with branding, marketing, writing, photography, and building web sites… and that’s what I did. I first built the store, and then shortly after that I got my Etsy store. The Etsy store was definitely a good idea, as it accounted for almost half of the sales.

10. Your second most important relationship is with your package carrier.
While I learned a lot about shipping, not all of it was fun, but hey, I’ve got shipping down pretty well now. I’m sure there are ways I could improve things, but so far I’ve not been annoyed enough to investigate them. I was disappointed to discover Etsy doesn’t allow you to require a phone number for orders, since FedEx seems to require a phone number for shipping. (Yes, I could enter my own number, but I’d prefer to have the customer notified if there are delivery issues.)

Branching out.
I did make a modification to the product… I decided to offer The (Bare) Button for sale, based on a number of people asking for it. I ended up getting an email from a guy who wanted the bare button, we agreed on a price, I got one ready to ship, added the order page… and never heard from him again. Luckily I didn’t really invest much (besides a little bit of time) into this diversion, because I’ve yet to make a sale of The (Bare) Button. Still, it’s an easy thing to offer in the store, as it’s just the button without the case, so I can easily keep it in there for the DIY folks.

In conclusion, the experiment went well, I learned quite a bit, and I made a profit! I’ll keep this going in small manageable quantities and see how far it goes. I’m trying to be realistic in this endeavor and I know that it’ll probably not be any sort of huge money-maker, but if it keeps going as it has been, I’ll be pleased.

Oh, and if you know anyone who needs a button… :)

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The Tool at Hand Challenge

One Tool
Mark Lindquist, Dowel Bowl, Hardwood Dowels, Glue, 5 1/2″ H x 36″ D, 2011. Copyright © 2011 Lindquist Studios – All Rights Reserved

If I haven’t bugged you about it yet, I’ll be at The Tool at Hand Milwaukee Challenge with a piece I created using just one tool.

There’s a little background on it here, and a post about it here, and you can RSVP on Facebook.

But besides all that, it’s at Sweet Water Organics, 2151 S. Robinson Avenue in Milwaukee, from 1pm to 5pm on March 17th, 2012. I hope to see you there.

And here’s a sneak peek at my piece:

...

Update: Enough waiting… you can see it here: rasterweb.net/raster/projects/plasticsun/

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Maker Business – Shipping

Your second most important relationship is with your package carrier

Rule #10: Your second most important relationship is with your package carrier.

Dealing with shipping has been the most un-fun part of this whole process. That said, it has been very interesting being on the other end of the shipping world.

I’ve got a PO Box at the Post Office a few blocks from my house, and I gave some consideration to using the USPS (and while I certainly want to save the USPS, I can’t do it at the expense of my business.) Ultimately a combination of poor service and a lack of being open late ruled them out for now.

So on a recent Saturday I had plans to go to the UPS store near my house and talk with them about shipping options. I’d already set up a UPS account, and linked it to PayPal (yeah, I’ll get into payment stuff in a future post) but wanted to talk to a real person about the process. Sadly, the UPS store closed about 20 minutes before I got there, so I ended up going across the street to FedEx. The FedEx employee was extremely helpful, and explained how it all worked. The only bothersome thing was that I won’t know the actual shipping price until I have an address. Even if I ship 10 packages all the same size, weight, etc. they may all be different prices. I asked them to run a sample based on a size and weight I had, and when they needed an address, I gave them NYC Resistor‘s since it was easy to find with a quick search on my phone.

The FedEx employee also talked about shipping boxes, and I bought an 8x8x8″ box to take home and see if it was the right size. It was $1.75, and I’m glad I only bought one, because I can get about 6 of them from Uline for that price.

So now I’ve got an account with the USPS, UPS, and FedEx. I’ve also sold one unit, which I’ve shipped out. The shipping I charged was pretty close to what it actually cost to ship it. I’m not an expert on PayPal, but it looks like you can set things up to calculate shipping costs during purchase if you use UPSP or UPS, both of which can be integrated into PayPal. As I mentioned, I’m using FedEx right now. Oh, and FedEx needs a phone number to ship things (?) which I did not have on the PayPal order page, so I had to add that. So yeah, shipping is a pain in the ass.

OK, well, that’s all I want to say about shipping right now. I mentioned PayPal a bit, so I’ll dig into that in a future post. I’m also sure I’ll have more posts on the subject, even though we’ve covered all of the Ten Rules.

(See all the posts in this series: Begin, Stock, Buy Smart, Basic Rules, No Leeway, Be Open, Community, Manufacturability, Marketing, Shipping, Lessons Learned, The Real Costs.)

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Maker Business – Marketing

Marketing is your job

Rule #9: Marketing is your job.

Marketing you say? Hell yeah, I got this one…

I mean, marketing is all about making things look good, right? Check this out:

The Button

OK, I’m only slightly kidding. I know marketing is more than just pretty pictures, and making things look good, but I do believe that’s definitely a part of it. Just look at the stuff that Evil Mad Science or Adafruit does. They both do their best to provide good, clear photos of their products. Check out the Make Flickr Pool. Some photos are really terrible, and others are really well done. I’m much more likely to view a photo and read about a project if the photo is awesome. (Awesome photos can also help you get in the roundup.)

I may have a bit of an edge, because I’m sort of a photographer, but even if you aren’t, there are some great tutorials online to improve your photography no matter what you shoot with (even an iPhone!) and if it’s really important, find someone to take good photos! If you can find a maker who would take some great photos in exchange for a free widget, send them the widget. A good set of photos go a long way.

OK, enough about photos… on to the other parts of marketing.

You should be blogging about your progress, and tweeting, too. Take pictures and videos of every milestone, and post those. Use every opportunity to talk about your work in progress and get people excited about it, which will not only start to form a community around it but will also build demand for it.

That’s all marketing. Community management is marketing. Tutorial posts are marketing. Facebook updates are marketing. Emailing other Makers in related fields is marketing. I suppose what I’m doing right now, writing this list, is marketing.

You can have the greatest product in the world, but if no one knows about it, you may never sell one. Marketing is sharing, it’s telling your story. It’s also hit-n-miss, and there’s no formula to make sure your marketing is effective, but you need to do it anyway.

I’ll also add in this little update: I created a store, and have already sold one unit. Starting slow, right? I’ve not opened it to the general public yet, but invited a few interested people to order. I’ll ramp up a bit and see how it goes. As for the rules, the next one is not fun…

(See all the posts in this series: Begin, Stock, Buy Smart, Basic Rules, No Leeway, Be Open, Community, Manufacturability, Marketing, Shipping, Lessons Learned, The Real Costs.)

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Maker Business – Manufacturability

Design for manufacturability

Rule #8: Design for manufacturability.

I have not designed for manufacturability, and I think for what I am doing, that’s fine. I’m basically acquiring all of the parts, doing a bit of soldering, a bit of programming, some drilling, filing and painting, and then some assembly.

The actual manufacturing of all the bits (at this stage) is happening elsewhere in the chain. Speaking of the chain though, I can already see (even with my initial run) that any area for small improvement can become a large improvement when you multiply it by 10, or 100, or 1,000 or more. That said, I’m considering investing in some better equipment. The hole saw I was using is just slightly too small. For a one-off thing, that was fine, as I didn’t mind a few minutes of filing to size the hole correctly. That “few minutes” times 10 or 20 starts to add up. I’ve also got a mediocre soldering iron, and if a better iron can make the soldering go faster, that’s a benefit. Getting things done faster means you’re making more in less time, and if you’re paying yourself (and you should be) then your hourly rate just went up.

I’m barely into this thing and I can already see where large manufacturers look for the smallest of savings to cascade into bigger savings (of time and money.) One thing I really don’t want to compromise on though is quality. I still make sure every unit looks good, and functions. I test each unit after programming and after assembly.

And now for some good news… I’ve made my first sale! I haven’t really opened the store to the public yet, but for the dozen or so people who were really interested in the product, I’ve started emailing them and offering them the first chance at ordering. We’ll see how it goes from here. Who knows, I may sell the first batch and then no one will ever want to buy one again. It’s a distinct possibility, and I’m protecting against that right now by not keeping a lot of stock. Oh, I’ve also learned more about shipping this week than I ever wanted to, and I still feel like I know almost nothing. Fun times!

Oh, I’ll warn you now: the next post in this series will be filled with amazing insight. Stay Tuned! :)

(See all the posts in this series: Begin, Stock, Buy Smart, Basic Rules, No Leeway, Be Open, Community, Manufacturability, Marketing, Shipping, Lessons Learned, The Real Costs.)