Need some advice

[cottonbuds]

Hey everyone. I seem to have found a product that has good profit margins and suits me as an individual. The issue is the product is made from a natural/plant material and so the production quality will be difficult to maintain beyond a certain scale say beyond $5 million a year in revenue. The farmers who control the raw material sell it now for cheap as it is a useless part of a cash crop but can increase their prices for the manufacturer once they see the demand for the product. The manufacturing process is simple and can be setup with an investment below $5k. It is difficult to get contracts/agreements done with the farmers as the plant is grown in a third world county. What are you guys thoughts? How should I approach this? This will be my first business venture if I move forward but then I want to transition to other eco friendly products that involve a bit more manufacturing effort (barrier to entry).

Here are also some rough numbers. I think they are okay but wanted to get the opinion of some more experienced people.

Amazon Retail Price per unit $20.00
Purchase Cost per unit $1.50
Shipping Cost to US per unit $1.00
Amazon Sellers Fee (15%) $2.25
Amazon Fullfilment Shipping per unit $2.50
Amazon Ware house Storage per unit $1.00
Marketing per unit $1.00

Total initial Investment per item (purchase price + shipping + marketing) $3.50
Total Profit Before Tax per item $10.75

Any advice/suggestions are welcome. Thanks in advance for your

 

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[MTEE1985]

The person you want input from is @biophase on this.

My thoughts are that while it is well thought out, if it is as difficult to contract with the farmers as you say then you’d better be very sure you have a big market for it. 25% margin isn’t ideal, but if you can sell thousands a month making $5.00/unit then you have a nice little business.

Is there currently a market for the product? competition? Are people searching for it?

 

[cottonbuds]

The person you want input from is @biophase on this.

My thoughts are that while it is well thought out, if it is as difficult to contract with the farmers as you say then you’d better be very sure you have a big market for it. 25% margin isn’t ideal, but if you can sell thousands a month making $5.00/unit then you have a nice little business.

Is there currently a market for the product? competition? Are people searching for it?

Thanks fro the input. From the amazon reviews based on 1 review per 50 sales (2% review the product), the annual sales on amazon are about 500k without much advertising on social media etc. The search results have been increasing slowly on google trends etc. The product can also be pushed offline through a few good channels. Because of the eco friendly nature of the product, it can easily be marketed.