Although I have said in the past that the internet provides the ability for the small player, the person without too much money, to compete with the larger companies and the bigger advertisers There are limitations to this, one of those is offering free postage and packing, although this may not seem to be a huge issue you have to run the numbers before you start and that is where unfortunately dear readers, I went wrong this time.
Learning is Painful – Really it is!
you see your product isn’t worth anything if you don’t make any money for it simple as that, that’s what we’re all here for and whilst we want to entice people to buy our products giving stuff away in the short term is a one-off cost let’s say, providing a service however such as free postage and packing is a much longer term commitment and consideration.
If I listened to myself all would be well 🙂
so let’s take a look at just how badly I screwed the Pooch this time, the sale totalled £33, the profit on those two products was a roundabout £11, but because we have decided to run before we could walk and have therefore offered free postage and packing we lost the vast majority of that profit due to the £8.99 postage and packing cost.
as the free postage and packing was my idea you can imagine that my business partner was not that pleased with me, and so lesson learned, fortunately for us this time, the damage is actually fairly easy to the limit, we are experiencing some footfall if you can call it that in a virtual world, but not enough, and not enough engagement with advertising to mean that withdrawing free postage and packing would cause any kind of damage to the brand.
where I went wrong in this particular instance (and it was me that went wrong) was I got carried away with the idea of simply shifting products, and that is the fundamental mistake that I made and the fundamental mistake that I don’t want you to make, remember why you started this, you started to make money that is your primary Motivator, your primary Motivator is not to shift products, and whilst that sounds screwy let me explain.
if somebody right now said I will give you £200 a day to do absolutely nothing, you don’t have to sell, work or suffer, you simply need to sit on your backside and earn the money and that is literally it, I would imagine that the vast majority of people reading this would jump at the chance and all be earning their £200 a day before finishing the end of this post (if anybody ever does).
and that actually is entirely the point the fact is you are not trying to move your products the only thing you are interested in is getting the money, and money lost is money lost, the idea of a “ loss leader” a concept that is employed by the vast majority of supermarkets, is that one loses money on a product to entice a customer further into the shop where they will then see more expensive products at a higher profit margin and the money will be returned and increased,
however as in my case, you simply make a situation whereby your paying customers to take your products that is not a loss leader that is simply a loss.
the moral of this particular sad Tale, is simply that you need to do complete research and by complete research I mean you need to look at what you are going to sell why you are going to sell it and what you’re looking to get out of it, if what you are looking to do is make money, then you need to run the numbers accurately, the numbers are the most important part of this you need to run them and you need to know them, business has always moved quickly, people that are able to move quickly and are versatile make money in business and those that take forever to shift or to move to a new product ultimately will always fail, this can be seen with the recent events and the fact that the high street is dying as a result,
it could be argued the High Street was already dying, I get that, but certainly because shops and bricks-and-mortar unable to move quickly to respond to buyers trends they are stuck and their costs are still fixed so basically on a huge scale they are doing exactly what I’ve just done.
good luck all remember to run the numbers and hopefully I’ll be back with some more more positive news in the very near future (tomorrow).