Hi all,
Currently, my business which I'm launching soon is funded by my day job (approx US$2000 / mth, if converted to USD and US living standards. Don't laugh!
).
Now, the products I'm selling are consumer retail products and I have only enough money to develop and release the first product around Nov 2017. For consumer retail products like mine, people usually buy only if there's enough variety and selection (imagine walking into a Nike store and you only see ONE shoe design of various sizes).
So, my strategy is to release 1 new product monthly based on my monthly savings.
Problem is, if I were to do this monthly, I would be on a very tight wallet.
Here's a breakdown of how I plan to use my monthly salary:
Total Salary Monthly: US$2000
Food, taxes, living, FB / influencer ads / giveaways etc., Shopify fees, important expenses : US$1370
Keep aside US$150 monthly as backup emergency reserves: US$150
Money left to release new product monthly : US$480
While US$480 is enough for me to release a new product each month to add to my store, it increases the production cost per unit and limits the quantity I can bring in (customers would be angry if they see it's Out of Stock).
So, I was thinking of launching "pre-orders" before each month to add to my US$480 development costs, so that I can drive the production cost per unit down and increase quantity.
For e.g:
December 2017 is coming, so on 1st Nov, I would post ads calling for Pre-Orders (maybe 15% discount incentive), and if there's 10 Pre-Orders, I can use the money from the Pre-Orders to fund my next batch of products which I'll be releasing in Dec 2017.
Let's say I get US$150 in Pre-Orders. I can then add this US$150 to my US$480 budget to make it US$630, and get a better deal with the manufacturer.
How does that sound? Any pitfalls to watch for?
Thanks!
*PS: All my scenarios and calculations which I plan for are based on SEVERELY PESSIMISTIC scenarios. e.g: 0 sales.
In reality, it should be better than that. But it's good to plan for the worst possible scenarios.
Currently, my business which I'm launching soon is funded by my day job (approx US$2000 / mth, if converted to USD and US living standards. Don't laugh!
).Now, the products I'm selling are consumer retail products and I have only enough money to develop and release the first product around Nov 2017. For consumer retail products like mine, people usually buy only if there's enough variety and selection (imagine walking into a Nike store and you only see ONE shoe design of various sizes).
So, my strategy is to release 1 new product monthly based on my monthly savings.
Problem is, if I were to do this monthly, I would be on a very tight wallet.
Here's a breakdown of how I plan to use my monthly salary:
Total Salary Monthly: US$2000
Food, taxes, living, FB / influencer ads / giveaways etc., Shopify fees, important expenses : US$1370
Keep aside US$150 monthly as backup emergency reserves: US$150
Money left to release new product monthly : US$480
While US$480 is enough for me to release a new product each month to add to my store, it increases the production cost per unit and limits the quantity I can bring in (customers would be angry if they see it's Out of Stock).
So, I was thinking of launching "pre-orders" before each month to add to my US$480 development costs, so that I can drive the production cost per unit down and increase quantity.
For e.g:
December 2017 is coming, so on 1st Nov, I would post ads calling for Pre-Orders (maybe 15% discount incentive), and if there's 10 Pre-Orders, I can use the money from the Pre-Orders to fund my next batch of products which I'll be releasing in Dec 2017.
Let's say I get US$150 in Pre-Orders. I can then add this US$150 to my US$480 budget to make it US$630, and get a better deal with the manufacturer.
How does that sound? Any pitfalls to watch for?
Thanks!
*PS: All my scenarios and calculations which I plan for are based on SEVERELY PESSIMISTIC scenarios. e.g: 0 sales.
In reality, it should be better than that. But it's good to plan for the worst possible scenarios.
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