distributing system vs production system

[iehni]

hi, I am new to the fastlane forum, and have been reading some threads, the community looks very freindly and gives good feedback, I am very happy to be able to post here.
I am a single mother of two, with a full time job, but would like to have financial freedom to be able to spend time with my kids and do the things I love, I have recently satrted a baby shoe buisness, I sew the shoes at night and am distributing them in four differnt stores. I belive this buisness has potential but i would need to scale it for it to make a bigger impact on my finances, my dilema is the following: I can not quit my job for the moment because i have fixed expenses and am not willing to risk the well being of my kids so I am doing everything I can in my spare time for the moment, my time is very limited and I can only focus on one thing at a time, I am not sure if I should focus first in building my production system (get the contacts to outsource the sewing and start the process of finding people to do leather shoes, my next step) or focus on the distributing system (getting contacts to sell my shoes in bigger stores and chains) your feedback and advise from people with more experience will be most welcome.

 

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[G-Man]

hi, I am new to the fastlane forum, and have been reading some threads, the community looks very freindly and gives good feedback, I am very happy to be able to post here.
I am a single mother of two, with a full time job, but would like to have financial freedom to be able to spend time with my kids and do the things I love, I have recently satrted a baby shoe buisness, I sew the shoes at night and am distributing them in four differnt stores. I belive this buisness has potential but i would need to scale it for it to make a bigger impact on my finances, my dilema is the following: I can not quit my job for the moment because i have fixed expenses and am not willing to risk the well being of my kids so I am doing everything I can in my spare time for the moment, my time is very limited and I can only focus on one thing at a time, I am not sure if I should focus first in building my production system (get the contacts to outsource the sewing and start the process of finding people to do leather shoes, my next step) or focus on the distributing system (getting contacts to sell my shoes in bigger stores and chains) your feedback and advise from people with more experience will be most welcome.

At the minimum, get quotes from manufacturers for scaled production (read: small to large MOQ). You can do this without a firm commitment, and you can't go to distribution without it.

• Price - I wouldn't go to market if you can't achieve at least a 50% margin. The higher the better so you can cash finance yourself. I don't want to be presumptuous, but I'm assuming that, with 2 kids, you may not have access to a lot of debt, and even if you did, might not want to risk it.
• Lead times - If you get a PO from a distributor, they'll have a ship date. Make sure your production facility can meet it.
• Cashflow - be aware that you'll have to pay the manufacturer at least 2 weeks before you get paid by disty
• Getting merchandised into B&M is a long process (think 6 months). You should consider selling online to refine proof of concept so you have something to take to a large customer. There are a bunch of ecommerce threads on this forum.

Best of luck and welcome to the forum.

Most importantly, in the stores you're in, if you're selling find out why. Customer feedback is man's best friend.

 

[iehni]

At the minimum, get quotes from manufacturers for scaled production (read: small to large MOQ). You can do this without a firm commitment, and you can't go to distribution without it.

• Price - I wouldn't go to market if you can't achieve at least a 50% margin. The higher the better so you can cash finance yourself. I don't want to be presumptuous, but I'm assuming that, with 2 kids, you may not have access to a lot of debt, and even if you did, might not want to risk it.
• Lead times - If you get a PO from a distributor, they'll have a ship date. Make sure your production facility can meet it.
• Cashflow - be aware that you'll have to pay the manufacturer at least 2 weeks before you get paid by disty
• Getting merchandised into B&M is a long process (think 6 months). You should consider selling online to refine proof of concept so you have something to take to a large customer. There are a bunch of ecommerce threads on this forum.

Best of luck and welcome to the forum.

Most importantly, in the stores you're in, if you're selling find out why. Customer feedback is man's best friend.

thank you so much for this feedback, I understand from it I should be focusing more on the production system, and I will analize all the tips youve given me in more detail, and you are right with two kids I do not want to risk a lot of debt.

 

[biophase]

Are you currently at your full capacity for making shoes?

 

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[iehni]

Are you currently at your full capacity for making shoes?

for making them myself yes, I am at my full capacity, I have given it a lot of thought already, trying to find more time in the day, i work until five and am with my kids until 8, they sleep and I start working until 11 i am up again next morning at 6, i used to work until 12 but lack of sleep was killing me so I reduced it one hour, i also work saturday and sunday, and the only way i see to increase my production is by outsourcing, but any tips on how to be more productive is more than welcome.

 

[biophase]

for making them myself yes, I am at my full capacity, I have given it a lot of thought already, trying to find more time in the day, i work until five and am with my kids until 8, they sleep and I start working until 11 i am up again next morning at 6, i used to work until 12 but lack of sleep was killing me so I reduced it one hour, i also work saturday and sunday, and the only way i see to increase my production is by outsourcing, but any tips on how to be more productive is more than welcome.

Can you give me an idea of how many you make per hour? How much are you selling the shoes to the stores for? What if you just went straight to retail so you didn't need to sell at wholesale rates? I'm trying to get a sense of how much you are currently making doing this.

I can see two ways to increase your income without outsourcing.
1) become more efficient, streamline your production and squeak out a few more shoes
2) sell direct to the public, this will probably double your income right away

 

[iehni]

Can you give me an idea of how many you make per hour? How much are you selling the shoes to the stores for? What if you just went straight to retail so you didn't need to sell at wholesale rates? I'm trying to get a sense of how much you are currently making doing this.

I can see two ways to increase your income without outsourcing.
1) become more efficient, streamline your production and squeak out a few more shoes
2) sell direct to the public, this will probably double your income right away

I am selling direct to public via social pages but it is not enough, i can make 1 1/2 per hour, depending on style i sell them for 10-20 usd in our currency, and at the moment i am not making much. do you think this proyect hast fastlane potential?
1- need? how can I determine this?
2- it can be scaled
3-entry, it is not that easy to get into the market, but not that hard either.
I do like making these shoes, but more than anything I feel this is something that can be done in my spare time and still find a way to make it bigger.

 

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[amp0193]

I have recently satrted a baby shoe buisness, I sew the shoes at night and am distributing them in four differnt stores.

Read up on the company Freshly Picked. They had an episode on Shark Tank, maybe you've heard of them. http://freshlypicked.com/

At one point the founder was hand-making the leather baby mocassins, selling them for $49 to $60 a pair. I think she outsourced production to a company in California. If you're hand-making, and the quality is top-notch, you really need to be charging a lot more. $10-20 should be your wholesale price, and you should shoot for at least $40-50 retail.

 

[iehni]

Read up on the company Freshly Picked. They had an episode on Shark Tank, maybe you've heard of them. http://freshlypicked.com/

At one point the founder was hand-making the leather baby mocassins, selling them for $49 to $60 a pair. I think she outsourced production to a company in California. If you're hand-making, and the quality is top-notch, you really need to be charging a lot more. $10-20 should be your wholesale price, and you should shoot for at least $40-50 retail.

thank you so much, i did not know about her, and have been reading all about freshly picked now, and watching interviews online, it is inspiring. about prices i have a tiny dilemma , I do not live in the US and 49 -60 usd a pair is a lot of money, more so considereing that there are a lot of baby shoes coming from China at 5 usd or less a pair, and also considering that I live in a very small country of 7.000.000 people only, I have experience with exporting, that is what I do at my job, and would like to export in the future but do not have the production capacity now. I feel I need to increase my production to later increase my distribution but am not sure I am aproching it the right way. but going back to prices I could increase price a little bit more, maybe not 49, but at least 20-30 usd range.

 

[amp0193]

thank you so much, i did not know about her, and have been reading all about freshly picked now, and watching interviews online, it is inspiring. about prices i have a tiny dilemma , I do not live in the US and 49 -60 usd a pair is a lot of money, more so considereing that there are a lot of baby shoes coming from China at 5 usd or less a pair, and also considering that I live in a very small country of 7.000.000 people only, I have experience with exporting, that is what I do at my job, and would like to export in the future but do not have the production capacity now. I feel I need to increase my production to later increase my distribution but am not sure I am aproching it the right way. but going back to prices I could increase price a little bit more, maybe not 49, but at least 20-30 usd range.

Well, prices are all relative.

If you can sell for $20 USD, but the cost of living in your country is 50% that of the U.S., then I'd say you're doing pretty well.

A lot of this comes down to branding as well. Freshly Picked is successfully selling products at 4x-5x competitors prices, who are just Chinese-made knock-offs. They've established a premium brand that people trust and believe in.

If you believe your product is a higher quality than the 5usd China pairs of shoes, then your price and marketing needs to reflect that. You need to convince people why your shoes are worth whatever price you're trying to charge.

 

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[biophase]

I am selling direct to public via social pages but it is not enough, i can make 1 1/2 per hour, depending on style i sell them for 10-20 usd in our currency, and at the moment i am not making much. do you think this proyect hast fastlane potential?
1- need? how can I determine this?
2- it can be scaled
3-entry, it is not that easy to get into the market, but not that hard either.
I do like making these shoes, but more than anything I feel this is something that can be done in my spare time and still find a way to make it bigger.

Are you selling out all the time? If not, how many shoes do you have in inventory?
What's the difference between a $10 and $20 shoe?
Why not make only $20 shoes?
What is your profit per shoe at $20?
Is $20usd alot of money in your country? What is the average wage per hour? How much do you make per hour at your job?
Do you have unlimited supply of materials, meaning you can buy as much as you can handle?

I'm trying to determine if you should scale this or not? It's hard to tell.

 

[MidwestLandlord]

3-entry, it is not that easy to get into the market, but not that hard either.

Entry for slowlane baby shoe making is low yes, but entry for fastlane baby shoe making is HUGE. If you can gain entry, that barrier to entry is a big benefit to you.

Seems that control, entry, time, and scale can all be handled and are in your benefit. The biggest problem I see is NEED. Who needs your shoes, and why do they need them?

Freshlypicked says on her "story" page that she couldn't find baby shoes that fit well, so she made her own. That was the "need" she covered. I've got kids though, and I really don't understand how that was a need. Most baby shoes fit my kids just fine, even the cheap $5 shoes at Wal-Mart.

Was the Freshlypicked gal filling the "need" for a higher priced unique baby shoe so American chicks can show off their babies? If so, a hand-made shoe from whatever country you're from could fit that category for the middle-upper middle class American chick. But hand-made brings scaling issues.

Welcome to the forum BTW. You've read the book, yes?

 

[iehni]

Are you selling out all the time? If not, how many shoes do you have in inventory?
What's the difference between a $10 and $20 shoe?
Why not make only $20 shoes?
What is your profit per shoe at $20?
Is $20usd alot of money in your country? What is the average wage per hour? How much do you make per hour at your job?
Do you have unlimited supply of materials, meaning you can buy as much as you can handle?

I'm trying to determine if you should scale this or not? It's hard to tell.

i sell 50-60% of the shoes I make, the 20usd shoes are pearl shoes, these are special requests, i have made them to sell in the stores but do not sell well, only under request do they reallly sell, my profit is around 10-12% but I could get a higher profit if I would buy material in bulk, average wages per hour are 2usd and i make around 6 usd, at the moment i am able to buy as much as I can handle. so you have an idea an adult shoe, made in my country, real leather shoes, cost around 21 usd retail, not wholesale, imported designer shoes at a mall cost around 100 usd

 

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[iehni]

Entry for slowlane baby shoe making is low yes, but entry for fastlane baby shoe making is HUGE. If you can gain entry, that barrier to entry is a big benefit to you.

Seems that control, entry, time, and scale can all be handled and are in your benefit. The biggest problem I see is NEED. Who needs your shoes, and why do they need them?

Freshlypicked says on her "story" page that she couldn't find baby shoes that fit well, so she made her own. That was the "need" she covered. I've got kids though, and I really don't understand how that was a need. Most baby shoes fit my kids just fine, even the cheap $5 shoes at Wal-Mart.

Was the Freshlypicked gal filling the "need" for a higher priced unique baby shoe so American chicks can show off their babies? If so, a hand-made shoe from whatever country you're from could fit that category for the middle-upper middle class American chick. But hand-made brings scaling issues.

Welcome to the forum BTW. You've read the book, yes?

thank you, yes I have ready the book, and I really liked it, I found it to have a lot of practical information, unlike a lot of other books I have ready were it is mostly just positive thinking. As a mom I understand by fit well, that they dont fall off all the time, which most do but yes, i think there is a place for unique handmade baby shoes but as you say scale would be an issue.