Apr 5, 2008

Biz Lesson For the Day...

Here's a little lesson in the importance of research and planning. I alluded to this type of situation in THIS post at the end. A woman had dumped a bunch of money into a product that was already on the market for 1/3 the price. She was shocked when Dr. Phil told her the fingernail polish holder she had created was already on the market and had been for some time.

So, here's my new version....

My dad sells items on eBay for people and came across a woman making cards. She said they were "Handmade 3-D cards made from the finest papers available". Dad asked me where she could sell them. She said she had seen them in boutiques for $20 each. I couldn't imagine what a $20 card would look like but I suggested Etsy. He passed on the information and she said she had looked but didn't feel like it was the right place. I couldn't imagine what would make her cards so special that a craft marketplace like Etsy or eBay wouldn't be appropriate for them. He asked her for samples.

When the samples came, I realized that this poor woman has no idea that there is a whole paper crafting universe out there. The cards were made from common textured card stock, embossed stamped images and fiber - okay, one had a piece of Japanese patterned paper on it, but it's not that hard to find. They were actually very "beginnerish" (is that a word?) in their simplicity. She said it took her an hour to make each one. I could have done them in 15 minutes. And, here's the painful part, she has HUNDREDS OF THEM. She expects $20 each for them. YIKES! Even the most ornate and time-consuming cards at Etsy were listed at about $7 each. Most were running $3.00-3.50 each. None were being sold by themselves at $20 each.

A little research could have saved her a lot of time and money. Yes, she may have seen these cards at a boutique somewhere for $20 each. But, had any sold at that price? Did she look around to see what other card options were out there? A little search at Etsy for "CARDS" would have shown her average prices and complexity of what was being sold already. Now she has all these cards that she feels must sell at a price that is unrealistic. Will anyone change her mind? I don't think so.

You can also apply this to opening a scrapbook store. Another one just opened in my town. I haven't been there yet, I'm going to check it out today. But, I will say that this is about the 6th store to open and close in the 10 years I've been in this area. Did the new owner know that? I don't know. I can only speculate that she didn't stop to think about that. EDITED later in the day to say, this store has been open for FIVE MONTHS!!! FIVE MONTHS!!!! And, I haven't heard a word about it until my friend who lives 70 miles away asked me if I had heard about it. How can she expect to survive if she's not doing any marketing? I have scrapping friends, I hang out at my local Yahoo Scrappers group but I haven't seen anyone mention this store. How could a store not do any marketing for FIVE MONTHS and expect to survive??

Most people want to jump into the "fun stuff". But, it's the stuff before the "fun stuff" that can point to your success or failure. If you're looking at opening a business, spend a couple of months gathering every bit of info you can before you ever start looking for locations or wholesalers. It can save you a lot of time and $$ in the end.

1 comment:

Sandra @ The Memory Workshop said...

A very powerful lesson for anyone who thinks they have a product or service that is unique. DO YOUR RESEARCH!

Interestingly, a new LSS just opened in my area too. From all reports, its a 'boutique' store in its decor and product & service offerings, which is different from all the other LSSs around here. It sounds like they've put some thought into their niche and target market.