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I've been talking with a manufacturer in Mexico to get a quote for a product I've developed. They gave me the quote today and the prices seem good to me.
I put up a Shopify site and was thinking of running some ads to the site to presell the product and then ship it once it arrives.
This will help me to cover the cost of my first order.
But I haven't even seen a sample yet. (I've seen a photo of my sample, but not the actual thing.)
So the risk I'm running is this.
If I get a bunch of orders, and then for whatever reason the sample is not good, the shipment of product falls through, or I have to go back to the drawing board with the manufacturer, then I could be on the hook for refunding a bunch of people.
But after shopify and paypal take out their fees, I would have to refund more money than I collected.
So that would put me in the hole.
Specifically, for every order that a customer places for $14.90, I actually take home $14.17.
That's just $0.73 per person... but if I get 500 orders, I'm not going to like going backwards that far.
Should I hedge against this risk somehow?
Has anyone else handled this?
Any recommendations or ideas for how to do this?
I put up a Shopify site and was thinking of running some ads to the site to presell the product and then ship it once it arrives.
This will help me to cover the cost of my first order.
But I haven't even seen a sample yet. (I've seen a photo of my sample, but not the actual thing.)
So the risk I'm running is this.
If I get a bunch of orders, and then for whatever reason the sample is not good, the shipment of product falls through, or I have to go back to the drawing board with the manufacturer, then I could be on the hook for refunding a bunch of people.
But after shopify and paypal take out their fees, I would have to refund more money than I collected.
So that would put me in the hole.
Specifically, for every order that a customer places for $14.90, I actually take home $14.17.
That's just $0.73 per person... but if I get 500 orders, I'm not going to like going backwards that far.
Should I hedge against this risk somehow?
Has anyone else handled this?
Any recommendations or ideas for how to do this?
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