Tag: maker

Maker Business – Buy Smart

Post author By Pete Prodoehl
Post date 2012-02-23

Buy smart

If we look at rule #3 we see:

The real difference between a hobby and a business is that businesses don’t buy retail. Just as you’ll be selling wholesale to other stores, you’ll need to buy your components wholesale to keep your products affordable. That means buying in volume, and the discounts typically get a lot better in units of thousands than in hundreds.

Well, right now I’m much closer to “hobby” than to “business” as far as purchasing. I certainly don’t have the capital to buy parts in the thousands, or even the hundreds. Let’s be honest, not even the dozens. As I mentioned previously, I’m not going to have much stock to begin with, which I think is fine. It keeps the risk low, and since demand is sort of an unknown factor at this point, I’m all for keeping risk (and expenses) fairly low.

That’s not to say I haven’t investigated things like bulk discounts, and with at least one component, I’m already saving (a little bit) by ordering larger quantities. The most expensive component has a discount starting at 25 units, which is more than twice as much as I’ve ordered so far. If I sell out the first run immediately, I’d consider 25 for the next order. The discount isn’t huge until you get into 100 units, which is a lot of cash right now.

At some point looking at alternate suppliers might make sense, but that also means checking that new/replacement components are of a high quality. I’m a bit picky about quality, so I really want to avoid cheap/unreliable components, or things that are aesthetically unappealing. Over the years one thing I’ve come to realize in business is that if you compete on price, it’s just a race to the bottom, and who wants to be on the bottom? Some folks do, but not me.

So yeah, it’s smart to buy smart, but it also costs quite a bit of cash to buy smart… So for now, I’ll just do my best to not buy dumb.

(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.)

Tags business, maker

Uncategorized

Maker Business – Stock

It takes lots of cash to stay in stock

Rule #2: It takes lots of cash to stay in stock.

After I built the button, I got an email from a guy asking if I could build one for him, and I did. At the time I didn’t follow the pricing rule of 2.3x and didn’t account for shipping (but I also didn’t do the programming, as he wanted to do that.) In the end, after I charged too little, and didn’t account for shipping, I ended up making so little money that I was getting paid minimum wage (or less) for the work I did. As a one-off thing, this isn’t too bad, as it was an interesting experience, but as a business it would be a complete failure.

So I’ve already established a price, and now I need to actually have items to sell. I’m starting with just 10 units. I’ve ordered the parts (from 4 different companies) and when everything gets here, I’ll do the soldering, programming, painting, and assembly, and then have 10 units to sell. (And yes, I did factor in the shipping costs I paid into the price I need to charge.) If I can sell 4 units, that will cover the costs of the materials, though not the cost of my time. I’m assuming right now that if I sell all 10 units, I will have covered my costs, and actually be able to cover my time at a reasonable rate. (That’s the theory anyway.)

I really don’t anticipate needing a huge amount of stock. I mean, demand isn’t overwhelming (yet) for what I am selling, and if I run out, well, I can choose to make more (or not) and it shouldn’t affect my overall business too much. It might annoy people if I’m out of stock, but hey, that’s all a part of selling physical goods, right?

(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.)

Tags business, maker

Uncategorized

Maker Business – Begin

You may or may not know that I’ve run a company for the past 8 years or so, and while our primary business has been related to web development and services, we’re looking at branching out a bit, driven by the fact that more and more I seem be getting requests to help build, or just straight out sell, a button.

There’s a page over on the Sparkbooth site about USB Button Keyboard Replacements that has a number of solutions, and mentions a few of my blog posts, so based on this, I’ll be building a bunch of buttons and putting them up for sale.

I don’t have a ton of experience selling physical products (though I did silk screen shirts and sell those years ago) but I’m going to be jumping into this, and we’ll see where it goes.

I’m not ready to become the next Adafruit Industries or Makerbot, but I’ll be writing up my experiences dabbling in the area of being a “Maker Business” and besides those two companies (which I admire) I’ll be looking at others, and hey look, this piece about Ten Rules for Maker Businesses has some advice for me, so I’ll be using it as a bit of a guide.

Make a profit.
It takes lots of cash to stay in stock.
Buy smart.
Basic business rules still apply.
You get no leeway for being a maker.
Be as open as you can.
Create a community to support and enhance your products.
Design for manufacturability.
Marketing is your job.
Your second most important relationship is with your package carrier.

OK, let’s get started! I won’t tackle all of these in this post, but we’ll start with #1: Make a profit.

Yeah! Money… it’s great! But seriously folks, I’m not in this to make a big pile of money, but I’m also not in this to lose money, or just break even. In my original post about the button I outlined all the parts used, and provided the code. My hope was that others who wanted to make one could, and some have, but there are a bunch people who either just want a final product that “just works” or want someone else to do the “hard work” of soldering and programming. I can handle that…

As for the actual pricing of the product, my initial estimate (before I even read the rule of 2.3x) was pretty darn close. Setting prices can be hard, but I’ve become a firm believer that charging too little is an idea that will do more bad than good in the long run. Yes, some people will think it’s overpriced, but they are more than welcome to buy another product or make their own. I’ve even provided all the info needed for people to make their own. (Yeah, you could mention something about open source hardware here if you’d like.)

So in this whole “experiment” I’ll keep in mind that I need to make a profit. I’ve got no plans to get rich from this endeavor, but if I’m lucky, I’ll provide people with something they want at a reasonable price.

This should be interesting…

(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.)

Tags business, button, maker

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Milwaukee Makerspace Grand Opening Recap

Post author By Pete Prodoehl
Post date 2011-04-11
3 Comments on Milwaukee Makerspace Grand Opening Recap

Photo by Michael Diedrick

The Milwaukee Makerspace Grand Opening & Mini Maker Fair was held on Saturday, April 9th, 2011 and wow, what an event it was! The photo above should give you a little indication of the crowd. It was “several hundred people” from the estimates I heard…

I’m mainly going to talk about my own experience, since I really didn’t get to experience much of the event, which is sad, and weird, but also cool.

Photo by Michael Diedrick

So, I got there around 10am and Matt was heard to say “Hey look, Pete brought BarCamp!” due to the amount of stuff I tend to bring with me, including projects to show, camera equipment, tripods, audio equipment, projector, tables, Time Lapse Bot, and other things. I got set up at a table and put out my projects. As usual, I was way too ambitious, and actually pulled back and didn’t show everything. This was a good decision, as there was just too much going on. The two projects that got the most interest were the Egg-Bot and the Friday Night Drawbot.

Photo by Brant

The Egg-Bot is just, well, it’s just cool. I had to explain a number of times that I did not “invent” it, but I built it from a kit. I gave a brief explanation of it (including open source software/hardware, Inkscape, etc.) to a lot of people. One kid was interested in it, and I told him how much the kit cost, and then he complained it was too much. I then described the parts used to construct it, and as soon as I said “laser cut” he was like “oh, yeah, laser cut, OK!” and then he was sold, and thought it was something he should have. (I did point out that it was all open source and he was welcome to get all the parts and assemble his own.)

Photo by Brant

I ended up printing about 50 eggs throughout the day, pretty much non-stop. I ended up doing someone’s name on an egg, and then printing one with the word “VEGAN” on it, and then at some point a mom asked if I could print a monkey. A monkey!? Well, off to OpenClipArt.org to find a monkey. And a candy cane. And a rose. And a cat. And the Rebel Alliance logo… I somehow ended up being a one-off egg printing factory! (But it was a lot of fun, and I learned a lot more about Inkscape.)

We gave away a lot of eggs, and I (mostly) remembered to tell people they were raw eggs, and advised the kids not to squeeze them, put them in their pockets, or drop the on the car ride home. One very young girl suggested I should have got up earlier that day (maybe 4am) so I could have boiled them all. As my excuse, I told people it would be easier to preserve them by blowing out the insides since they were raw. One woman gave us a dollar for an egg. (We added it to the Makerspace Donation bucket.)

And what would the day have been without some Drawbot action!?

I don’t know, but I do know I’m lucky Sam showed up and took on a lot of the Drawbot maintenance. He also ended up exploring Drawbot in ways I haven’t yet, using the Ultra Fine Point Sharpies, and the results were pretty darn good. I’ll try to scan some of the drawing this week. I’ve also got some reprogramming of Drawbot I want to do soon.

Oh, and I ended up telling a lot of people about the Arduino, and how the Drawbot worked, and explained that it was pretty darn easy to build, and if they came down to the Makerspace on a Thursday night, someone could probably help them get started with Arduino hacking.

Now, as for the rest of the event… I missed most of it! I was at my table for nearly 8 hours straight, with just a few quick bathroom breaks here and there while Sam watched the table. I think I need a “Back in 10 minutes!” sign or something. But really, it was a blast talking to so many people and answering questions… but it was also exhausting. I didn’t feel comfortable enough to just leave the table unattended for any large amount of time, so I’m not sure what the solution is… except to have someone else work the table along with me.

I have almost no photos to share from the event, and no video (except for the stuff Time Lapse Bot shot) so head over to the Flickr pool to see some more photos.

Oh, and word from the makers is that they all loved it, it was a great/successful event, and they can’t wait to do it again. Well, they can wait about a year maybe. :)