Investing in an automated production line

[BKMoney]

Hey Guys,

I have some spare cash to invest and I plan on buying an automated production line for wet wipes. I'm located in Eastern Europe and manufacturing costs here are very low, labor is low, rents are low and it's in the EU so the market is there. I chose wet wipes because it's a product with constant high demand, long shelf life and the whole process can be automated (only a single person is required to operate the machine). What are your thoughts about this as a business and an investment and what are your thoughts on investing in automated manufacturing machinery as a whole?

 

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[ZCP]

What do you have for sales?

 

[100k]

I love the idea. I think its brilliant.

But before you invest your money I'd go talk to distributors, retailers and wholesalers. Show them what you want to sell them, see if they want it, ask what price they'd be willing to pay and at what quantities etc. Get them to sign papers on a purchase order but don't ask for payment upfront. Basically minimize the risk.

 

[BKMoney]

I love the idea. I think its brilliant.

But before you invest your money I'd go talk to distributors, retailers and wholesalers. Show them what you want to sell them, see if they want it, ask what price they'd be willing to pay and at what quantities etc. Get them to sign papers on a purchase order but don't ask for payment upfront. Basically minimize the risk.

Good points. I have researched manufacturing costs but haven't talked to any distributors yet. My idea is to target a niche in the wet wipes industry with high demand and low competition so I'm positive that there is a huge market for that.
My other thought for market validation is to create a private label product by outsourcing the manufacturing and when I validate the market to move on to purchasing the machinery.

What do you have for sales?

Not sure what you mean exactly. This idea is a part of my asset diversification plan. I am constantly looking for new ideas that will bring in passive and semi-passive income and I think this model fits in perfectly.

 

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[ZCP]

Who have you lined up to buy your product? How many are they looking to buy and how often?

 

[BKMoney]

Who have you lined up to buy your product? How many are they looking to buy and how often?

I still haven't validated this idea yet but I'm in the process of doing so. The beauty of this is that it can be expanded both ways - you can manufacture products for other brands (as contract manufacturer) and you can be building your own brand simultaneously.

 

[WestCoast]

BKMoney-

Congrats on thinking big, I like where your head is at.
I don't want to be a wet blanket on this, but, an automated production line producing a product is, uhm.. quite the endeavor.
From cash to build it, test it, tweak it.
Then staff it (even if it's one guy running a machine all day). Then you have have the raw materials (whatever the heck they are in wet wipes) and the constant strain of cash flow to produce items all the time.

You'll want to run your machine first, yourself, as your orders in the beginning could be zero... for months.
You can be out selling and talking and testing your production cycle, and no one is buying.
Unless you have cash laying around, it's going to eat a lot of money fast.
You can't stockpile inventory too soon, what if people want a different color, or scent, or quantities or packaging?


Again, not trying to be negative. I *REALLY* like that you are thinking BIG. That's awesome, and don't stop thinking like that.
Solve big problems well, and you'll make $$$$$$$$

But, don't let the 'automated' part of a production line idea fool you into thinking profits on it are automatic.
It's going to be capital intensive, and a lot of work to break into an industry likely controlled by a couple huge companies with massive staff and huge economies of scale.

Private labeling could be good, but what can you do DIFFERENTLY than the big guys.
What is an edge you can provide to your customers and vendors that the big guys can't.
It's not just going to be low prices. It has to be flexibility or adaptability. You have to move faster than the big guys somehow.

Just be careful that you don't correlate Automated Production = Easy.
It's going to be hard work and a lot more involved than you might think.

Do your research, talk to the stores (ignore the middle men, go around them, go direct to some small speciality stores or direct to cleaning companies).
Find out what they want, what they are paying now, what value you can add and how you can make THEM more money.
Then build your business around that.

 

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