Forums: Discussions for entrepreneurs and small business.

Hey gang,

Here is my dilemma.  I need to start working on a web site for my Cabo Loco Apparel.  I cannot decide if I want to sell online.  All of the shirts, wrap pants, dresses, etc. that I want to sell, I make myself.  It takes me about 5 hours to make one Cabo Loco shirt.  I guess I am affraid of success because I fear that if I try to sell online, I will get burried in orders and will not be able to bail myself out.  Would I be better off letting people in the local Tampa-St. Pete area know where they can get them and dealing with special orders?

As always, I look forward to everyones help and insight.

Bill

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Cabo Loco- Paradise is closer than you think.

Can you find people who can work for you on a part time basis? You could come up with a price per shirt made.
It also depends on whether you want to run a business or to have a job (the way I see it you will have a job if you decide to make the shirts yourself - but you will have a company if you hire other people to make the shirts for you and you will worry about marketing, sales, etc.

Just my two cents.

Good luck,

Andre Costa

ps. just thought about something now. Can you use the services from CafePress.com?? Depending on what you create, that may be a good, cheap solution for you in the beginning.


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Andre Costa DaCosta Chocolates, LLC www.DaCostaChocolates.com

I believe this is a concern that more and more entrepreneurs are facing; those who`s product begins as something they`re making by hand, personally. The so-far answer seems to be Andre`s thought, to have "waiting in the wings" a troop of part-timers who`ll work for some nominal money.

But the underlying complexity is that for someone making a single product, custom-made, hand-made, like that, they`re not charging labor to the costs budget. I believe the reason is that the profit of the sale includes the retroactive charge on the labor.

Traditional business (and I`m CERTAINLY NOT an accountant!) would have you apply the labor costs of sewing to the cost of the item. That assumes an employee(s) on a paid salary. Those charges then become part of the initial product cost. When the item is sold, the retail price is over and above the cost including that labor.

But in these situations, the labor is considered "free," per se (heavily qualified!). The person wants to get out of the corporate ratrace, or has no other way to generate income. They have time on their hands, and can sew, bake, build, or whatever. Because the time is "free," the cost of the product is materials only.

If it costs $20 in materials to make a shirt, that`s one thing. But if we assume even minimum wage of $6 (roundabout) for 5 hours of labor, that adds $30 to the cost, making them now $50. Add a profit margin, and say decide to sell the shirt for $100. Would the market bear that price? Would the demand?

Now add to the situation that the person is barely subsiding on whatever income. If they sell the shirt for $50, they get what appears to be $30 over cost of materials. That`s a personally useful number. Are they earning a "profit," or are they being retroactively paid for their labor? Is building the shirt an "investment" in the future for the later return of the $30? Or is it making a shirt for free, and "losing" the $30 on paper?

How does the shirt-maker pay the external employee for their labor, when the money for the shirt comes in only after the shirt is sold? As the owner-manufacturer, the single shirt-maker can postpone payment until the shirt sells. But when hiring even a part-timer, that payment must go out before the shirt sells.

Theoretically, this would be when a loan or investment capital would pay the startup costs, floating the labor charges until the company had enough money to handle it. But many times this type of company can`t get the loan or investment. They`re winging it with a new product, no history, no particular business knowledge or special experience.

It may not happen constantly, but it happens enough that the shirt-maker goes online and gets swamped with orders. Particularly if they have a desirable product. But now they have the orders, yet couldn`t previously build up that cadre of waiting-in-the-wings part time tailors. Maybe, if they were fortunate, they could "talk about" having some sewing done in the event it might be needed, someday, somehow, later...someday....somehow. Who would buy into that? Not many, I`m suspecting.

I think controlling the distribution is best. Build the business very slowly, like the "Dippy Chick" site. Gradually increase volume according to what`s possible. When the orders are just slightly more than 1 person can handle, bring in one extra manufacturing person...almost a partner, not an employee.

Maybe a financial analyst could define the crossover point where there`d be a way to predict a real next-term increase in business, to the point where an application for a loan would make sense to a banker or other investor?

Bill,

I have a motto: "Go big, or go home." Saying this is not a slam against you - just something to think about. But if you really believe in your product, find a way to make your products faster than 5 hours - otherwise, I don`t see how you can go big.

Many sewing jobs have gone offshore from America. There are literally towns full of ex-sewers that I imagine would love to work for you. Another option is to have your shirts made offshore unless you have an adversion to that and want to go total US made - your choice. But you do have many options beyond hand-producing the apparrel yourself.

In small business you can not be afraid of success - success is a primary goal. Plan the work and work the plan.

"Reduce your plan to writing. The moment you complete this, you will have definitely given concrete form to the intangible desire." ~ Napoleon Hill 

Good luck to ya!

R@
 

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Richard Arnold · Key Concept Writers · Business Communication: The "Key" To Success· Law of Attraction Blog · Life Ain`t Brain Surgery Blog

Another option, to control distribution while you`re looking for sewing help; raise the price. If you need revenue to hire the sewing people, you can slow down the pace of sales by rasing the price. Then, those who buy the shirts at the higher price can help finance the lower price later. It`s the `first implementer` thing. :-)

Keycon says:

This speaks to the idea that machine-made, production line manufacturing is the way to go for all businesses. Alright, let`s consider that. What`s the difference between an individually built Web site and a template?

Plenty of Web developers are stuck with few clients at the start because they want to make a customer-centric site. They don`t want to use boilerplate content, templates, and cookie-cutter sites. Is that a fear of thinking big? What`s missing when someone chooses a template site? It`s good, works, looks fine, and so forth. Shouldn`t all people choose the template system? Is it foolish for the Web designer to limit his or her capacity simply because it "takes too long" to make unique sites?

The problem here isn`t about a fear of success, or being afraid to get big or "go big," to use an empty platitude. It`s a desire to work out a way to provide unique, individualized product using a global advertising system in the Web. One solution is to NOT use the Web for advertising, and keep the company local.

Another solution is to sell through places like eBay, where the seller controls distribution and the buyers "expect" limited quantities. So the question actually could be phrased another way:


This is the "slow track" more and more Baby Boomers are opting toward, sometimes caled the "mommy track." It`s a pendulum swing against the increasing speed of assembly-line robots shuttling around the world, never seeing their family anymore, driven by a clock. It`s a counter-reaction to sameness, "bigness," and the loss of the unusual, unique, distinctive, artistic, and limited-in-quantity.

The marketplace has room for choice. We can get a McDonald`s burger, fries, and a shake in about 2 minutes. But we can also go to a fine restaurant, order a wonderful meal, cooked by a distinguished chef, and know that we`ll wait at least half an hour before it arrives. For that reason, we have appetizers, a drink, and hopefully, conversation.

So too, we can go to a mid-level place like Denny`s, where you wait longer than 2 minutes, but less than 10 minutes. It uses a short-order cook, with template menus, none of which are complex. It`s your choice as to what level of quality you want.

Finally, you can cook your own meals, using gourmet skills, the finest ingredients, and marinade something for 24 hours or more. Again, personal choice.

It`s too easy to put everyone into a single model, where automation, hired employees, starving seamstresses in China abound, and selection is limited to only some models. Whether it`s shirts, slipcovers, or apple pies, there will always be room for the choice of time and quality.

The issue is credibility. If you offer a shirt on a Web site and 100 people order it, they all assume they`ll get it within 14 days, unless otherwise clearly stated. If you fail to deliver, your company credibility and reputation goes down the drain.

So it seems to me that the answer is to offer custom-made goods, explain the process, and limit the number of orders you`ll take at any give time. From there, if you choose to create repeatable models, then it`s time to get the upfront loan capital to hire the help. Otherwise, if you`ll go the custom route, the main process is to control the distribution and order-taking, whether from the site, with consignment outlets, or on eBay.

I`m with Craig on this one. I think that if people knew up front that there might be a wait for one of your products, they would still be interested in it as long as they understood why they needed to wait for it. A lot of people already understand the concept that quality takes time. If they just want some cheap hawaiian shirt, they can probably go to wal-mart and buy one. If they want something more unique and more special, they`ll have to wait.

If things took off so much that you were weeks and months behind with orders, maybe you could consider hiring someone to help you make shirts. I think that when the time comes, you`ll be able to figure out the best course of action :-)


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